“A new frontier for accountancy.”
Those were the words of Jeremy Osborn, FCMA, CGMA, Global Head of ESG at AICPA & CIMA, a couple of days after the International Sustainability Standards Board issued the first two standards aimed at creating a global baseline for sustainability reporting.
“Companies are an integral part of society, and their ability to generate cash over the short, medium, and long term is inextricably linked to their access to resources and relationships throughout their value chain,” he said. “Finance professionals will need to account for how these resources and relationships are being managed.
“Companies must make connections between their sustainability-related financial disclosures and their financial performance. The CFO and his or her team will be at the forefront of forging these connections.”
Osborn was among several leaders at AICPA & CIMA, together as the Association of International Certified Professional Accountants, who shared a word or phrase that encapsulated their initial thoughts about the new standards.
Interoperability (Barry Melancon, CPA, CGMA, CEO of AICPA & CIMA)
“The reality is that professional accountants sit in a very important role,” Melancon said at a New York Stock Exchange event the day the standards were issued. “They sit in the companies — there’s hundreds of thousands of those around the globe where the measurement and the controls against the standards is going to be critical to telling the correct story or a fair story about a business enterprise, and then ultimately the assurance of the reliability and consistency that comes with that process.
“Businesses are global, supply chains are global. No matter how you look at this issue, interoperability is a critical component of making all of this work.”
Value creation (Ash Noah, CPA, FCMA, CGMA, managing director—Management Accounting and ESG for AICPA & CIMA)
“The meaning of value is going beyond profits and margins and cash flow. Value is becoming a stakeholder issue rather than just a shareholder profit,” Noah said on the Journal of Accountancy podcast, recorded one day after the standards were issued. “That shift is something that finance professionals really need to understand and manage. It’s really critical in terms of how they bring value to their organisations.
“I believe this is a significant opportunity for finance to really participate in the implementation of these standards but also in terms of creating value and really harnessing the opportunities that organisations come across as they adopt a more sustainable business model.”
Capacity building (Ami Beers, CPA, CGMA, senior director—Assurance & Advisory Innovation at AICPA & CIMA)
“There’s a lot of talk about the need to build capacity and aid companies in implementing these standards going forward. To create a system that provides high-quality, consistent reporting of sustainability-related disclosures, we need to develop the resources that enable accounting and finance professionals to strengthen their knowledge, skills, and processes that are needed to facilitate the implementation. Therefore, I think the next focus area needs to be building awareness and delivering guidance and education to companies of all sizes.”
— To comment on this article or to suggest an idea for another article, contact Bryan Strickland at Bryan.Strickland@aicpa-cima.com.
