Welcome to the Chartered Accountant’s Sustainability Roadmap from Chartered Accountants Worldwide.
The role of Chartered Accountants is changing as the need to do business sustainably becomes more central to how companies and consumers operate. The purpose of this roadmap is to provide signposts to Chartered Accountants to understanding sustainability and its impact on their work. This guide has been prepared for Chartered Accountants working in the private sector, but it can equally be applied to those working in the public and not-for-profit sectors
Getting started – Building your knowledge
Understand key terms, e.g. ‘sustainability’, ‘ESG’, ‘climate change’, ‘circular economy’, ‘sustainable finance’, ‘the EU Taxonomy’ and the ‘UN Sustainable Development Goals’. (This glossary will help). Gain a basic understanding of the most popular ESG standards and frameworks. These include SASB, GRI, CDP, CDSB, TCFD, but there are many more! This guide will help.
- Sign up to selective sustainability news alerts to keep up to date, e.g. a Chartered Accountancy institute’s newsletter, or a news source like Bloomberg Green. Updates specific to sustainability reporting can be found on the standard setters’ websites – IFRS on the new International Sustainability Standards (ISSB) and here from EFRAG on the draft of the EU Sustainability Reporting Standards (ESRS).
- Locate knowledge sources on sustainability and accountancy. These may be within your own organisation, from your Chartered Accountancy institute, from the ‘Big 4’ accountancy practices, and from bodies such as Accounting for Sustainability (A4S).
- Find case studies of financial professionals who have successfully embedded sustainability accounting practices in similar-sized organisations. Here are some examples from Accounting for Sustainability (A4S) and from TCFD hub.
- Find sources of support for your particular business, sector or industry group. Supports can include grants, green finance, free workshops and advice. Check your local and national business information providers, if available, for details.
- Look for events, webinars, workshops and certified courses on sustainability to build your knowledge, e.g. the free training provided by TCFD hub, by regulators, by local and national government and by professional associations.
- Identify relevant specialists in your network of finance professionals and connect with them. They may be experiencing similar issues and can share their knowledge.
- Engage in thought leadership forums to find out what is best practice, get practical knowledge, hear others’ experience and share success stories.
Mapping and engaging stakeholders
Create a plan for how you and your team will identify your business/clients’ business stakeholders. Consider engaging a consultant to help. Click here for a list of stakeholders.
Identifying and rating risk exposure
Rate your exposure to inherent, financial and control economic, environmental, social and governance risks. It may be helpful to do this in ‘time buckets’ to consider immediate, short-, medium-, and long-term factors.
Setting sustainable goals
An outline framework for collaborating with stakeholders and setting goals. Click here to reveal the list.
Identify your key sustainability metrics. This report from the World Economic Forum (WEF) might be useful. Decide on a timeframe for when you plan to start measuring sustainability metrics. Create a plan for how you will gather baseline data for each of your KPIs. Click for more.
Embedding a sustainability mindset throughout operations
Establish a top-down, bottom-up approach with people throughout the organisation so that they are incentivised to achieve sustainability goals. Define roles and responsibilities for administrating, managing and supervising sustainability matters and the oversight of their management. Click for more.
Conducting a materiality assessment
An initial materiality assessment will examine how environment, social and governance factors will impact on your financial value and how your activities will impact on the economy, the environment and people. Here are some steps to consider when creating a materiality assessment.
Identifying and rating opportunities
Here are some lists and considerations to show how your organisation can matches the values of your customers / clients / candidates. Identify how embedding sustainability will help you meet your customers’ needs, e.g. by developing new products / services. Click for more.
Developing a strategy, policies and implementation plan
Draft your sustainability strategy. Obtain executive and board sign-off and approval of your strategy. Draft your sustainability policies. Obtain executive and board sign-off and approval of your policies Click for more.
Reviewing data processes and controls
Identify the data that must be collected, following your stakeholder engagement activities. Ensure all those required to provide input are identified and are clear on what they need to provide. Define your governance processes around data collection. Click for more.
- Create a clear review process for data-collection and measuring progress against your baselines and targets. One method is to create a Sustainability Dashboard and Database that is updated monthly with summarised results measuring KPI performance. These are reported back to management every month, and to the Board and external stakeholders every quarter.
- Keep track of progress against your baselines and targets – monthly, quarterly and annually
- Identify and monitor costs involved in relation to sustainability, e.g. by creating costs centres in the Enterprising Resource Planning (ERP) systems to identify actual costs being incurred. This can then be analysed against the budgets and long-term plans.
- Establish a communications channel to report progress of metrics to senior leadership and members of the Board.
- Perform internal due diligence on your supply chains and review the effectiveness of the company’s internal quality control and risk management systems.
- Review and prepare the information for external assurance. Make sure the data collected is traceable, consistent, accurate and complete.
- Communicate your progress against your goals and targets to your stakeholders.
- Make sure you match your communications style to individual audiences. For example, how you describe achievements to customers or staff is likely to be different to how you report to shareholders or regulators.
- Where required, identify relevant reporting requirements for your organisation. These can be the requirements of, e.g. banks, shareholders, investors, markets, regulators, etc. Identify a reporting framework that fits with those reporting requirements. This is an iterative process as frameworks develop and change.
- Ensure that you are applying all the regulatory and statutory reporting requirements relevant to your business’s operations and the jurisdictions within which it operates.
- Create a process for writing and reviewing your reports. Establish the governance structure – who ‘owns’ the reporting responsibility (e.g. Finance)? Also, identify which Board Committees are responsible for reviewing the reports.
- Keep track of assurance requirements on non-financial information to ensure the company’s sustainability reports meets basic standards for reporting.
- Publish your commitments, policies and progress updates on your website.
This is an active area and, like all things sustainability-related, is subject to change. See Sustainability Assurance Playbook (September 2022) from CAANZ for an examination of what the journey to providing sustainability assurance might look like.
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