Sustainability is a hot-button topic right now, due to the increasing awareness of what we can collectively do to reduce the impacts of climate change. The accountancy profession can play a significant role in achieving both climate change mitigation and adaptation of required standards such as those set by the global reporting initiative (GRI) and sustainability accounting standards board (SAAB) at individual businesses, the industry sector, and the economy at large.
As investors continue to push for ways to align their investment strategies with environmental, social, and governance (ESG) criteria, the questions for the accounting profession are, how to report and what information should be reported to stakeholders, including investors and regulatory agencies, and how can accountants assure the accuracy of this information which is still at an evolving stage.
This article will discuss how an accountant plays an important role in ESG reporting.
With a vital role to play, professional accountants should commit to:
- Assessing, verifying, and reporting ESG performance to meet GRI and SASB standards.
- Provide sound advice and services and plans for climate change mitigation and adaptation.
- Accountants can implement reporting frameworks such as climate-related Financial Disclosures.
- Contribute to the efforts of the organizations they work with to integrate climate change risk into organizational strategy, finance, operations, and communications.
- Support sustainable decision-making within their organisations by allocating budgets and resources.
- Assisting in developing high-quality, timely information and insights through measurement and disclosure.
- Can assist clients to build on robust and transparent accounting systems.
ESG accounting focuses on conscious decisions regarding energy usage, environmental footprint reductions, ethical standards adherence, and regulatory compliance. Accounting firms also take utmost care that their suppliers and partners have ESG policies and initiatives in place which should be as per the basic standards. ESG principles also help to build trust with clients by demonstrating ESG awareness and incorporating ESG considerations into the scope of their accounting services. Awareness of ESG issues can open rooms for accounting firms to identify opportunities for new business and areas where clients may need additional assistance or advice.
In conclusion, the role of an accountant in ESG reporting is to provide confidence and assurance to stakeholders that the company’s ESG performance is accurately disclosed and needs the required standards.
Credits:
Swadhin
Business Services Team
