Driving the journey towards social equity

The future of our organisations depends on sustainability and a just transition – and you’re at the forefront says Clive Webb

What does the phrase ‘a sustainable organisation’ mean to you?

ACCA defines it as one that balances the three components of economic, environmental and social action to deliver a longterm future.

Organisations are facing up to the possibility that their future will be unsustainable – and their stakeholders are asking finance professionals and the accountancy profession for increasing amounts of information on how key risks are being addressed.

It’s important to measure performance in a wider sense than purely financial terms

A new report from ACCA, called Accounting for society’s values, explores these questions and more in depth, arguing that organisations need to transition to a sustainable future that embraces economic, environmental and social aspects in combination.

Our research has revealed that accountancy and finance professionals are at the forefront of the transition to a sustainable future. The report places an emphasis on what it calls ‘the social agenda’ – a transition to sustainability that balances social equity with environmental action. Now, as a profession, we need to see this as an opportunity to define our future role and put the social agenda at our core.

The three domains of sustainability – the triple bottom line Society faces longterm challenges from social injustice, with stakeholders and regulators increasingly focusing on the social implications of the actions of organisations. That’s why defining and measuring the return to society by an organisation’s activities is becoming as important as the financial objectives themselves.

The model of the social agenda developed as the report came to life. It was then used as a basis for roundtable discussions with a wide selection of finance professionals. This is no one-size-fits-all, the model will apply differently to individual organisations depending on their location and culture, but each component, says the report, ‘requires a focus and a strategy’.

Model of the social agenda

We all know that finance professionals are at the forefront of budgeting and costing decisions that impact all the elements of the social agenda model. But finance professionals are set to have a crucial role in measuring performance in a wider sense than just purely financial. And for that we may have to up our game.

But while us finance professionals are, of course, comfortable with discussing economic viability and are becoming more comfortable with environmental protection, the report argues that social equity is yet to be fully embedded into the culture of organisations, supply chains and society as a whole.

For organisations, the report identifies three priorities in moving towards the social agenda:

• Developing strategy in a way that embraces the social objectives, while keeping in mind the requirements of various reporting regimes.

• Ensuring that organisational performance is measured in a way that reflects the transition. This means exploring non-traditional data sources that may be more subjective in nature. And when using those sources applying the appropriate level of control to encourage stakeholder trust.

• Meeting external reporting requirements, not just within the organisation’s four walls, but also along the value chain.

The profession, stresses the report, has the opportunity to take a leading role in driving through the necessary change – and this can benefit the profession as much as it benefits organisations and society.

The final word comes from ACCA chief executive, Helen Brand: “The social agenda is a broad one and requires organisations to act now. Without the valued and proactive input of the accountancy and finance profession, the goal of reaching sustainability for all organisations will be unattainable.

“The profession has an opportunity to play its full part in enabling the just transition, not least the social aspect – one that it cannot afford to shirk.”

To find out more read the full report here

• Clive Webb is senior insights manager at ACCA

Sustainability standards – video explainers - https://www.accaglobal.com/ gb/en/member/sectors/sustainable-business/sustainability-standardsvideos.html

Green finance skills: the guide - https://www.accaglobal.com/gb/en/ professional-insights/global-profession/green-finance-skills-the-guide.html

Climate Finance course in collaboration with CFA - https://www.accaglobal. com/gb/en/member/discover/events/global/e-learning/sustainability/ climate-finance.html