Being alert to risks and behaving ethically around sustainability reporting and assurance will be fundamental to establishing trust in the information published. So, ACCA has published a guide, Ethical dilemmas in an era of sustainability reporting, to support professional accountants.
It sets out the challenges for finance professionals that may result in ethical dilemmas as:
- needing to rapidly develop systems and processes for verified reporting
- working with a variety of data, much of it subject to estimation and uncertainty
- a risk of partial or misleading reporting (‘greenwashing’), in part due to increasing interest from a range of stakeholders with differing needs and expectations from corporate reporting
- sourcing reporting and assurance talent.
Tensions could arise given the multiple sources of guidance available to promote ethical behaviour
‘We have a collective obligation to future generations to operate individually and as organisations in a sustainable manner,’ the report warns. ‘For professional accountants, this is an opportunity to provide strong leadership and insight, in turn helping to drive ethical and sustainability-focused decision-making.’
Too much information
The report points out that tensions could arise given the multiple sources of guidance available to promote ethical behaviour – for example, principles of sustainable development, corporate governance codes and the International Code of Ethics for Professional Accountants issued by the International Ethics Standards Board for Accountants (IESBA). Interpretations of what is deemed ‘right and correct’ may differ between stakeholders or decision-makers applying different codes.
The report recommends finance professionals use checklists, make the IESBA ethical code an everyday part of sustainability reporting, and identify ethical threats and dilemmas generally.
It also provides simulations of real-world sustainability-reporting scenarios where ethical dilemmas arise due to weaknesses in processes and systems; risks of greenwashing; insufficient competence and due care; and challenges of independence.
More information
Watch ‘Ethical dilemmas in an era of sustainability reporting’, ‘Navigating ethics in the workplace’ and ‘Making tax and ethics work together for a just society’ at ACCA’s virtual conference Accounting for the Future, on 21-23 November, or watch on demand at any time after
Read the AB article ‘Ethical frameworks should enable’
