Sustainability on Our Minds—The Editor’s Review Series No. 2

Eli R. Khazzam | December 14, 2015

The Editor’s Review series provides readers with a recap of previous articles, resources, and/or news featured on the IFAC Global Knowledge Gateway. The series is designed to focus on a particular subject area that has been covered by our team and contributors.

The accounting profession is doing more to help organizations assess their big picture: the environment, social responsibility, and the value created in the communities they serve. Public recognition of the importance of sustainability and sustainable development is changing business culture and society. Sustainability is becoming integrated into the agendas of many organizations. However, environmental and social responsibility issues are often disconnected from core business strategy. Accountants have a leadership role to play in driving sustainability principles and metrics into an organization’s strategy and decision-making processes. This includes making sustainability information more transparent and useful for stakeholders. We get a lot of really valuable content on the Gateway. But as an additional service for our users, I’ve highlighted some of the articles I’ve found most useful, informative, and thought provoking on sustainability below.

Professional Judgment Beats at the Heart of Project and Investment Appraisal for Sustainable Value Creation

Stathis Gould, Head of Professional Accountants in Business, IFAC

To ensure that projects and capital investments support the creation of value over time, decisions need a blend of supporting data and analysis covering economic, environmental, and social (often referred to as sustainability) considerations.

Carbon Accounting for Small Businesses: How Accountants Can Help Everyone Be Greener

David York, Head of Auditing Practice, ACCA

Guidance from the Association of Chartered Certified Accountants can help those accountants who advise small- and medium-sized entities (SMEs) about establishing and operating carbon accounting (that is, greenhouse gas accounting). It provides working tools to measure and report the carbon emissions of a small business so that targets can be set and reductions achieved in its environmental impacts.

The Sustainability Imperative for Small Business

Paul Thompson, Director, Global Accountancy Profession Support, IFAC

Small- and medium-sized entities (SMEs) might think that sustainability is only relevant to large companies—for a small business, the administrative and financial costs outweigh the benefits. However, SMEs that integrate sustainability into their core business strategy can benefit from lower costs, reduced risk, and new opportunities. And their accountants play a key role in their journey.

Know Your Boundaries

Stathis Gould, Head of Professional Accountants in Business, IFAC

Decisions on reporting boundaries need to be informed and transparent to allow investors and other stakeholders to compare and benchmark non-financial performance. Seeking to address this need, the Climate Disclosure Standards Board issued proposals for boundary setting in reporting, which provide practical assistance to professional accountants as they cover boundary setting for non-financial reporting purposes generally as well as for climate change or environmental reporting purposes. 

The Societal Importance of Cost Accounting Standards Issued by the Institute of Cost Accountants of India

Rakesh Singh, Chairman, Cost Accounting Standards Board, Institute of Cost Accountants of India

Cost accounting standards promote uniformity and consistency through the integration, harmonization, and standardization of the different principles and practices previously in use. In India, the Cost Accounting Records Rules set by the government for 44 industries deal with the various items of cost and the way in which they need to be reported in accordance with cost accounting principles.

When Does the Climate Risk Tsunami Arrive?

Stathis Gould, Head of Professional Accountants in Business, IFAC

Following the release of shareholder reports from Shell and ExxonMobil on climate change and carbon asset risk, IFAC’s lead on these issues takes a deeper look at what each company reported, and how increased transparency is good news all around.

Five Ways CFOs Can Support Better Management of Natural Capital

Sandra Rapacioli, Head of Sustainability Research and Policy, Chartered Institute of Management Accountants

Natural capital—forests, air, rivers, minerals, oceans, land—is the bedrock of life and underpins all other forms of capital, including financial. Society, economies, and businesses rely upon this natural capital for survival. But do businesses’ understand the extent to which they do? How can CFOs and management accountants support better management of natural capital and ecosystems?

Using Management Accounting to Drive Environmental Performance

Anthony Pember, Chief Executive Officer, Pilbara Group; Mark Lemon, Manager, Global Public Sector Practice, Grant Thornton LLP; and Stathis Gould, Head of Professional Accountants in Business, IFAC

Are organizations using management accounting tools, such as activity-based costing and management (ABC/M), to manage environmental impacts? As with a traditional ABC/M model, an environmental ABC/M model leverages an organization’s emissions inventory and greenhouse gas footprint, and assigns that footprint to particular products, services, and activities. So why isn’t such a model more widely used?

Another Reporting Framework? Yes, but a Valuable One

Dr. Jarlath Molloy, CPhys, Technical Manager, Climate Disclosure Standards Board

There is a long list of environmental and sustainability reporting framework but a the Framework issued by the Climate Disclosure Standards Board is not just another reporting methodology. It allows investors to assess the relationship between environmental performance and risks and the organization’s strategy and prospects.

Focus on What Really Matters: Key Trends in Sustainability and ESG Reporting

Stathis Gould, Head of Professional Accountants in Business, IFAC

Investor engagement, regulation, and societal expectations are driving increasing awareness and action on environmental, social, and governance (ESG) performance. This forces organizations and CFOs to enhance reporting and disclosure, and include ESG factors in daily decision making. But how should organizations provide meaningful and specific disclosures for ESG issues? What significant initiatives and frameworks are available to help? How can organizations ensure reporting and disclosure is useful for users?

Innovative Organizations: Becoming Net Positive

Stathis Gould, Head of Professional Accountants in Business, IFAC

An increasing number of companies, including Coca Cola, British Telecommunications (BT), and retail organizations Kingfisher, Ikea, and PUMA, are striving to become net positive. That is, they will give back when it comes to the critical environmental and social factors their business models depend upon. Becoming net positive is a significant step and an enlightening journey.

Eli R. Khazzam

Senior Professional, Economic Development & Emerging Technologies.

Eli R. Khazzam is a senior professional focused on economic development & emerging technologies. Previously, Mr. Khazzam was the Editor-in-Chief of the IFAC Global Knowledge Gateway and had various roles working as a Governance Manager and Senior Technical Manager of Public Policy and Regulation at IFAC. Prior to joining IFAC, he was an Executive Director at Liquid Metrics, LLC., a research and consulting firm specializing in community-based economic development and public policy issues. See more by Eli R. Khazzam

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