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The rise of a new tribe of green accountants

The pivotal role accountants can play in driving their organization's environmental sustainability agenda

  • Vivek Saxena

    F&A service line leader

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Published

11/02/2022

When '90s animated TV series Captain Planet and the Planeteers first aired – featuring five superheroes who solve environmental disasters by joining forces to summon Captain Planet – no one thought that a real-life Captain Planet would emerge from the accountants' community.

Sounds far-fetched? Take a look at this job description I came across recently for an opening in the office of a CFO:

The candidate should be a qualified accountant (CPA, ACA, ACCA) with deep technical knowledge of accounting and with a desire to drive forward the company's sustainability agenda. He or she should have a good understanding of the landscape of sustainability and climate-related global initiatives such as net-zero targets, climate risk, and impact assessment. A working knowledge of carbon accounting based on the Green House Gas (GHG) Protocol Corporate Standards across different environments including corporate reporting, regional reporting, and integrated reporting for the industry is a must.

This is not a one-off requirement. Rather, this points to an irrevocable shift in the role accountants play in future-forward organizations. There is the expectation that they must take the lead in making the business case for environmental, social, and governance (ESG) initiatives and are in charge of measuring, reporting, and improving their organizations' ESG impact. Simply put, the accountants of the future will be a tribe of green accountants who help their organizations achieve both profits and purpose at the same time.

Multiple factors are influencing the focus on sustainability accounting:

  1. Consumers and employees expect organizations to prioritize ESG, safeguarding diversity, human rights, and the environment.
  2. Investors – the orchestrators of capital flow – are signaling their preference for enterprises that prioritize long-term, environmentally sustainable value creation.
  3. Regulators across the globe are pushing mandates and directives for ESG disclosures such as the US Securities and Exchange Commission's climate disclosures, the Task Force on Climate-Related Financial Disclosures, the Non-Financial Reporting Directive, the Corporate Sustainability Reporting Directive, the Carbon Disclosure Project, and the International Sustainability Standards Board's two upcoming standards.

Green accountants to the rescue!

The climate emergency is real. According to research from the Intergovernmental Panel on Climate Change, the global community requires urgent action to avoid the worst impacts of climate change.

In the TV series, when the Planeteers cannot resolve a situation alone, they combine their powers to summon Captain Planet. It showed that a diverse group of people can work together to enable someone like Captain Planet to become a champion for the environment. Today, stakeholders have united in their call to CFOs and their teams to connect diverse groups, internally and externally, to tackle environmental and social issues.

Accountants must play three distinct roles:

1. Net-zero-budget ninjas: As businesses step up their ESG efforts, they need a more evidence-based approach that measures, monitors, and reports their impact objectively. This imperative underlines the need for accountants to own their company's carbon budgets and be real climate warriors.

As more global businesses commit to achieving a net-zero impact – which they can deliver by reducing their carbon footprints or offsetting carbon – accountants play an indispensable role in tracking progress and holding stakeholders to account. And because carbon emissions and carbon-credit accounting regulations differ across geographies, industries, and the size and nature of operations, green accounting calls for specialized skills. To develop these capabilities, many leading organizations are collaborating with institutes and strategy consulting organizations for reskilling and training

2. Rightful owners of the 'books of impact accounts': We're at the cusp of adopting a new approach by which businesses measure, monitor, and evaluate transactions in monetary terms as well as by their impact on the environment and society. As accountants have a view of both sides of their companies' net-zero equations – the positive and negative impact on the environment – they are best positioned to balance the organization's environmental profit and loss through carbon accounting principles and guidelines. This calls for organizations to maintain a new book of accounts and deliver investor-grade information on ESG measures, backed by verifiable data gathered through well-defined processes. To gather this data, organizations must embed sustainability metrics across business processes in key functions including finance, operations, and supply chain. This requires green accountants to possess advanced collaboration and communication skills to engage with internal and external stakeholders and provide a complete view of a company's performance that informs both operational and strategic decisions.

3. Evangelists for sustainable governance: In the absence of standardized reporting frameworks, organizations find it a challenge to collect verifiable and comparable ESG information, making it difficult to distinguish real performance from greenwashing. The good news is that the global regulatory environment is moving swiftly to agree on reporting rules and standards that better serve enterprises and investors.

CFOs and their teams must incorporate rapidly evolving ESG reporting requirements into their regulatory frameworks and operations at speed and scale. In addition to keeping a close eye on disclosure metrics, accountants need to support their teams in balancing financial and ESG materiality, incorporating anticompetitive practices, improving ESG risk management, and engaging with regulators

Build a team of Planeteers

As expectations and regulations on environmental responsibility intensify, green accountants are in demand. To attract, train, and grow this new tribe of talent, companies must become:

  • Purpose-driven: To attract the best talent, organizations must embed their purpose in their day-to-day culture and operations. This requires collaboration and commitment at the executive level
  • Data-focused: Climate change is a data challenge. Businesses are empowering their finance, technology, and digital teams to join hands and drive measurable and auditable climate governance across the organization and beyond. This involves rethinking accounting systems and embedding sustainability reporting tools to capture the environmental impact of every transaction and decision

As the world faces enormous challenges in securing the health of the planet, accountants can elevate their roles and provide the collaboration, transparency, and data their organizations need to walk the walk on environmental sustainability. As Captain Planet would say, "The power is yours!"

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