The United Nations (UN) is in the midst of a significant coordinated project to ensure a sustainable future for the planet. Accountants have a vital role in ensuring its success.
Back in 2015, the UN set about defining a set of 17 Sustainable Development Goals as part of a rallying call to end poverty, protect the planet, and ensure that by 2030 all people enjoy peace and prosperity.
With less than a decade to go, these goals are beginning to achieve more prominence – and leverage – in the world of business.
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Accountants are central to global progress towards these goals, as they decide what information is collected and how it’s presented to colleagues and clients.
AAT’s five goals
AAT encourages members to consider how the SDGs could apply to them. It is supporting their advancement by focusing on five of the most relevant goals:
- Quality education
- Gender equality
- Reduced inequality
- Protect the planet
“These goals are key to us as an organisation and the activity of our members,” says AAT Head of Responsible Business and Policy, Adam Williamson.
“Without those facts and figures, we won’t know whether we’re achieving what we’re aiming to achieve,” he says. “With the UK committing to net zero carbon by 2050 and a 78% reduction on 1990 levels by 2035, these are big targets that will only be achieved if businesses engage with them and start to look at how to meet them from a financial and business perspective.”
Accountants are well-placed
“Accountants design business models and the mechanisms behind them,” explains ACCA head of business reporting, Sharon Machado. “They are in a powerful position to influence businesses and how they approach sustainability. That includes monitoring a wider set of factors and recognising where they affect business processes. It’s a much more holistic approach that is required.”
That means considering the risks presented to the business by climate change rather than simply monitoring your business’ carbon emissions, Machado says.
As such, undertaking tasks such as mapping the supply chain, understanding where the risks occur and the nature of that risk is required, she says.
“Members who work in finance teams for large organisations are already the ones having to put this information together and do the reporting, and we want to offer as much support as we can,” Williamson says. “Our licensed members don’t tend to deal with companies that are required to do that at the moment, but smaller businesses will have to engage with it sooner or later.”
ICAEW director of thought leadership, Richard Spencer, adds: “The key thing for accountants is that it will be impossible to turn these goals into reality without information.
“We don’t know how much we depend on nature, the impact we’re having on it or whether we’re succeeding or failing without information. Accountants shape our view of the world through the provision of that information and organisations will make decisions based on that.”
Of course, the goals are complex and can throw up a number of challenges. For example, many of them can advance each other in tandem. However, some SDGs can conflict with each other.
“Think of it as a point of entry,” says Spencer. “You need to ask yourself how this goal relates to the other goals. What does it depend on and what are the impacts it has?”
“There’s always potential for friction, but at the same time, they can intersect in a positive way,” says Williamson. “In AAT’s case, quality education, reduced inequality and gender equality are closely linked. There’s a huge crossover between these things and that means they can be advanced together.”
To that end, Williamson says open conversations with clients, suppliers and staff are vital to identifying where aims overlap.
Partnership is key
In the spirit of recognising how the SDGs affect each other, it is also true that partnerships are vital to their success.
Many of the goals pertain to areas generally beyond the scope of accountancy in social and climate science realms. As such, partnerships with specialists are crucial to an accountant’s role – that of collecting the correct information, understanding its impact and presenting it to board members.
That is something accountants often do anyway in the course of their work, explains Machado. “Accountants aren’t pension analysts, and yet you see pension information in sets of accounts. When you’re talking about the SDGs, they don’t need to be experts in measuring emissions of toxic gasses, nor do they need to be human rights experts. What they do need to be expert in is understanding when these issues affect their business.”
“That’s what we want to convey to AAT members,” Williamson says. “It’s difficult to change the world on your own, but if every one of our 140,000 members made one small action, that’s an enormous collective step.”
Calum Fuller Calum Fuller is editor of AT and 20 magazines. He's previously served as editor of Credit Strategy, assistant editor Accountancy and began his career at Accountancy Age..