What Role Do Accountants Play in ESG Reporting?
“What Role Do Accountants Play in ESG Reporting?” is a question I’ve heard asked more and more recently. The answer, for me at least, is potentially a very pivotal one in establishing your baseline, setting up a way to track and monitor progress and report your outcomes, both success and failure.
As we approach October, with the dawn of 2024 in sight, many of us, accountants included, will become somewhat transfixed with setting budgets for the new year ahead. Aside from that, I’ll be taking the opportunity to review what our ESG plans will include next year too, and there’s plenty to think about in that respect.
Just consider the key trends that are expected to shape the ESG landscape in 2024 (sourced from Sustainable X):
1. Circular Economy focused on longevity, reusing and recycling.
2. Transparency and Traceability demanded for stakeholders and supply chains.
3. Regulations are ever-tightening.
4. Technological Innovations enable better monitoring and managing of ESG.
5. Social Responsibility emphasis is growing to focus more on diversity and inclusion.
From my own experience, when we set out to measure, manage, improve and report our own ESG, I found there can be a pretty steep learning curve for the SME, and there are relatively few companies that cater to our needs really well.
Given the solution involves measuring where you are now, setting targets for the future, setting budgets for cost, people and time and then tracking and reporting all of that (sound familiar), I naturally assumed that one of the most naturally gifted professions for these tasks would be accountants.
The president and CEO of the AICPA, Barry Melancon, recently noted “that out of all the ESG assurance engagements worldwide in 2021 (the most recent year for which data is available), only 57% were conducted by accounting firms”.
Barry thinks, as I do, “that reporting, consulting and assurance services around environmental, social and governance issues represent an enormous business opportunity for the future — but that accountants may not be getting as big a share of that as they should”. Money left on the table? 🤔
In the book ‘The Human Firm’, Will Farrell, discusses how accountants can go beyond digital to build a scalable, client-centric business that can articulate value in terms of both your clients and your employees, in order to differentiate a firm. I could be well out of line, but maybe that could include accountants taking up a leading role in advising and supporting their clients with ESG?
Well, I may not be the only one thinking this. Back in May this year, I attended Accountex London, then the Digital Accounting Show in June, and finally (so far) Accountex Summit Manchester in September. At all three, there were stands, exhibitors and presenters showing and telling accountants all about ESG and the opportunity for them in this space.
