Whether it is climate change, racial injustice or geopolitical instability, there can be little doubt that Covid-19 has exacerbated already difficult social and environmental challenges.
It seems equally clear that a return to the pre-Covid status quo will not be enough to rebuild the world’s fractured economies and societies.
It is, though, a conundrum that professional accountants may be able to crack. A recent ACCA report puts forward a clear case that professional accountants are in a strong position to influence this social and economic reconstruction and turn commitments to sustainable recovery into reality.
ACCA’s call to action is for all organisations to commit to building better impact management into their processes to create value
Leading the charge
Mainstreaming impact: Scaling a sustainable recovery confirms that professional accountants are prepared to spearhead a sustainable recovery. Based on a survey of more than 800 ACCA members, together with detailed discussions with a subsection of these members, the report reviews how the ‘impact revolution’ has now reached mainstream business and finance.
In the survey, three-quarters of respondents admit that their own organisations need to change to do more to address social inequalities, while 85% say their organisations could do less damage to the environment (see graphics below).
Post-Covid, how much do you think your organisation needs to change to ensure it does more to address social inequalities? (By age)
Post-Covid, how much do you think your organisation needs to change to ensure it does less to damage the environment? (By age)
Just over half (54%) consider they have the skills and training needed to address their organisation’s management of its social and environmental impact. But many stress the magnitude of the barriers they face, including potential costs, lack of senior management buy-in, and too narrow a focus on financial returns.
Time for a rethink
The report calls for business to remove these barriers by rethinking its approach. ‘Professional accountants have a unique view across the organisations they work for and advise,’ it points out. ‘They have the potential to perform a range of vital tasks in rethinking business to support the mainstreaming of positive impact and to foster a sustainable recovery.’
This conclusion is supported by the survey finding that 95% of respondents believe that finance teams must play a role in building a more socially inclusive and environmentally sustainable future. Almost one-third want finance to lead the way, and almost two-thirds say that finance should support the work of other teams.
Respondents strongly agree that part of their role, alongside supporting the reliability of impact management, was making sure that social and environmental activities were financially viable.
Call to action
There are many steps that professional accountants can take towards building positive impact into their work, skills and careers:
- Recognise the value of professional accountancy competencies in addressing value at risk arising from social and environmental impact issues to help uncover emerging opportunities for strengthening resilience
- Build decision-useful knowledge of the spectrum of non-financial, sustainable development and impact-related issues to develop the literacy required to support organisations
- Learn about impact management dimensions and reporting methodologies that suit different scales and sectors
- Apply analytics skills to capture, refine and interpret a growing array of new sources of data
- Build soft and relationship skills to enhance multidisciplinary collaboration to develop the means of supporting internal stakeholder engagement
However, managing impact is an evolving practice. For the Impact Management Project (IMP), a multistakeholder forum for impact measurement and management, ‘managing impact is the practice of measuring, assessing and improving the effects of activities on sustainability issues. It is relevant for enterprises and investors who want to manage environmental, social and governance (ESG) risks, as well as those who also want to contribute positively to global goals.’
Additional conceptual framing for improvements to business and investor impacts was codified in 2015 in the United Nations’ Sustainable Development Goals. The goals provide a framework for delivering interconnected economic, social and environmental change across 17 themes by 2030. They now underpin several increasingly sophisticated approaches that investors and the private sector must use in tackling sustainable development issues.
Time to commit
Jimmy Greer, ACCA’s head of sustainability and author of the Mainstreaming impact report, says: ‘ACCA’s call to action for all organisations is for them to commit to building better impact management into their processes to create value.
‘They need to make board-level governance commitment to additional and intentional social and environmental positive impact creation. And they must also allocate resources within finance teams and across organisations to build decision-making capabilities related to environmental and social impact.’
The appetite among professional accountants to bring impact measurement into the mainstream is strong.
As the survey reveals, professional accountants want to develop their skills in sustainability data analytics and social impact measurement, believing that there are many opportunities for the use of data in impact measurement. They also call for greater collaboration with other teams that are mainstreaming impact to make the business case and secure the resources for finance to play its role in this vital development.
Read the report Mainstreaming impact: Scaling a sustainable recovery