Accounting

Role of Accountants in Sustainability

The role of accountants in promoting and reporting sustainability is very broad. They can use their skills of aggregating data into useful information, help with cost analysis of environmental decisions and be involved with the audit and assurance of corporate social reports.

Reporting

Accountants are well versed in the application of standards for reporting, and their skills in this area can be applied to the reporting of an entity’s sustainability performance. Their systems could also be modified to incorporate environmental and social information, which could be used for both external and internal reporting purposes.

Cost analysis

Comparison of two competing investment projects would require an analysis of economic profits in order to make decisions relating to social and environmental initiatives. For example, a development may require land to be brought back to its original condition; a decision may be needed as to what tyres to purchase given their costs and impacts on company-maintained roads; or the cost of implementing energy-efficient devices may need to be compared to the energy consumption costs. This could then be extended to the collection, analysis and reporting of non-qualitative information.

Audit and assurance services

The integrity of financial information and its collection can be safeguarded by putting in place clear processes and procedures known as internal control. This is familiar ground for accountants and makes them ideal candidates to help provide auditing and assurance on the CSR reports that are issued by entities. Apart from internal control, the systems in place and reports produced can be audited by external independent groups or individuals. The GRI Standards identify external assurance as important to the reporting process and list its key qualities. External assurance:

  • Is conducted by groups or individuals who are external, competent and independent of the reporting organisation.
  • Is systematic, documented, evidence-based and characterised by defined procedures.
  • Assesses whether the report provides a reasonable and balanced presentation of performance.
  • Utilises groups or individuals that are not unduly limited by their relationship with the organisation or its stakeholders (i.e. they are impartial and independent).
  • Assesses the extent of the application of the GRI Standards.
  • Results in an opinion or conclusion that is publicly available along with a statement outlining the relationship of the assurance provider to the report preparer (Global Reporting Initiative 2013).

References:

  • Birt J., et al. (2020). Accounting: Business Reporting for Decision Making 7th John Wiley & Sons Australia, Ltd.
  • Google Image. (2021)
Tommy Andrian, S.E., M.Ak, Cert.DA.