The UN’s Sustainable Development Goals (SDGs) will not be met if companies ignore the key role played by accountants, a new consultation paper warns.
The paper, published by the Association of Chartered Certified Accountants (ACCA), Chartered Accountants Australia and New Zealand (CA ANZ) and Institute of Chartered Accountants of Scotland (ICAS), sets out recommendations for SDG disclosures and acknowledges the role accountants play in achieving the goals.
“A shift in investment and capital markets is required to achieve the SDGs. The shift will only be achieved by involving the accounting, sustainability and strategy functions,” Carol Adams, co- author of the paper and professor of accounting at Durham University Business School and Swinburne Business School said.
“Corporate reporting frameworks that require board engagement lead to change. By involving [these] functions and requiring board engagement, it is hoped that the disclosures proposed in this document will facilitate a shift in organisations’ business models and investment decisions,” Adams commented.
The paper’s disclosure recommendations centre around four key themes, including management approach and risk management, strategy, governance, and performance and targets.
Recommendations include a requirement for organisations to consider their impact on the achievement of sustainable development both outside and within the company’s boundary.
It also proposes SDG disclosures “cannot and should not be expressed only or even primarily in financial terms”.
SDG disclosures should also demonstrate that sustainable development issues and impact on the achievement on the SDGs is integrated into company business models, consideration of the external environment, strategy to create value, risk management, and other key processes.
“The sustainable development issues addressed by the UN SDGs will have an impact on long-term business success,” Adams said.
“Businesses, asset owners and asset managers are recognising the risks and opportunities that are arising from issues such as poverty, inequality, climate change and environmental degradation. They are incorporating them into strategy and adjusting business models, but more needs to be done and faster,” Adams added.
The timing of the consultation paper is key as governments around the world consider how they will fulfil their commitment to achieving the SDGs. The 17 goals, which were adopted by all UN Member States in 2015, tackle some of the biggest global challenges including poverty, inequality, climate, and environmental degradation.
Organisations, investors and stakeholders are invited to respond to the consultation paper by 31 October 2019.
More information is available here.