The pandemic served as the first proof point for sustainability, underscoring the fact that ESG investing does not have a cost, but more than that, it can future-proof investments and, in some cases, increase returns, all while at the same time, helping to shape a better future. In the face of this crisis, the facts now prove the resilience of sustainable investment and the important relationship between sustainability and the role of accountants.
A global survey of companies and institutional investors commissioned by ING, still in 2021, showed the pandemic as a moment that accelerated most companies' sustainable transformation plans. At the same time, investors began demanding that companies set stricter environmental goals. At the time, according to the survey report, 57% of companies say they are accelerating green transformation plans and 62% are likely to link executive compensation to environmental goals.
Another Financial Times article, published in 2020, explored the reasons why the year was rewarding in terms of sustainability, whether due to less exposure to fossil fuels or better corporate practices such as supply chain management and corporate governance, making companies more resilient shocks and capable of overcoming crises. There is no doubt that the pandemic crisis has strengthened the case for responsible investment and the relationship between sustainability and the role of accountants has increased even further.
Another change noticed was that organizations saw themselves as part of the solution and not just the problem, understanding how important it is not only to preserve, but to recover what was degraded. The major change in behavior led companies to reflect and make changes, whether in products or in the production process, and the topic began to require humanist leadership, guided by values and ethics, a profile that is increasingly significant.
The world needs organizations interested in more than just zeroing impacts and for that they need to be part of the solution and protagonists of a new economy.
RELATIONSHIP BETWEEN SUSTAINABILITY AND THE ROLE OF ACCOUNTANTS
Sustainability describes a world where resources are at least maintained and which do not consume capital, whether natural, economic, social or human. Its vision is that business is connected to communities and the natural world, functioning in and contributing to wider society. Business and society are not separate and, in fact, depend on each other to work.
When we talk about sustainability and the role of accountants, our ambition is to change behavior to generate sustainable results. To achieve this, we aim to be bold, radical and open-minded. The unifying theme of our work is to explore how organizations and markets are motivated to deliver sustainable outcomes and what the role of information flows is. Our goal is to be at the forefront of thinking and action on sustainability, focusing on how organizations adopt it in their activities.
We are looking and thinking about many different aspects of sustainability:
· The concept of natural capital and how it is applied in finance and business;
· The future of the financial system;
· How to help our members with accounting and sustainability;
· How the economic system can support sustainable results;
· The role of social enterprises in the development of sustainable communities;
· Systems change;
· Innovation processes;
· Using creative thinking to deal with important issues;
· Supporting communities of change makers;
Generating information on the broad concept of sustainability and being an instrument for the organization's complete management is possible through the GRI model sustainability report and also the Integrated Report.
Still thinking about the relationship between sustainability and the role of accountants, the accountant also plays a role in sustainability actions, as it needs to be measured, reported and guaranteed. These areas of specialization naturally fall within the remit of an accountant. Good quality, reliable and appropriately targeted information is vital for sustainable development.
Companies need to modify their behavior based on information. Accounting information can provide performance feedback, which guides management decisions about the future.
Organizations need to operate proactively, anticipate sustainability issues before they arise, and find new business opportunities in this changing environment.
The proper functioning of these mechanisms depends on the availability of accurate and reliable information and the assurance of this non-financial data. Accountants are experienced in providing information and assurance and as business decision makers. They are also involved in developing the company's strategy.
Chartered accountants can be involved in a huge variety of activities, including:
· Implement energy efficiency measures (and therefore cost savings);
· Formulate and implement corporate responsibility policies;
· Design of management information systems – for example around tradable permits and carbon emissions;
· Guarantee of supply chain processes and procedures;
CORPORATE TRANSPARENCY – Connectivity between sustainability and the role of accountants
GRI Sustainability Reporting Standards are the most commonly accepted global standards for sustainability reporting by companies, designed to enable consistent reporting across companies and industries, providing clearer communication to stakeholders regarding sustainability issues. Standards are available for reporting on a wide range of ESG-related topics, ranging from anti-corruption practices to biodiversity.
Lany Harijanti, regional program manager for ASEAN at GRI, in a statement for the website environmentalanalyst, highlights ESG, global reporting standards, financial incentives and dedicated staff as important roles in expanding corporate risk management strategies to include sustainability factors.
In the case of the revised universal standards, in addition to enhanced transparency on human rights and an enhanced approach focusing on due diligence, they bring a greater focus on determining material sustainability topics, along with clarity on the principles, requirements and framework of reports. According to GRI, universal standards will position organizations to meet emerging regulatory reporting requirements such as the EU Corporate Sustainability Reporting Directive and IFRS plans for enterprise value standards.
COMPANIES ALREADY STAND OUT IN INTEGRATED REPORTING
Sustainability has already become a focus of concern for many leaders and investors and that is why the relationship between sustainability and the role of accountants is so important. Society is increasingly interested in these issues within organizations, questioning whether information is being disseminated correctly and with quality. Generating information on the broad concept of sustainability and being an instrument for the organization's complete management is possible through the GRI model sustainability report and also the Integrated Report.
Integrated Reporting is a corporate communication process that integrates financial and non-financial information, with equal criteria and quality, contributing to business management, reducing information asymmetry and controlling risks. It uses a framework that can help these pillars provide a clear and concise explanation of how an organization uses capital to create value now and for the future. After all, business and society are not separate and, in fact, depend on each other to work.
IN 2022, SANASA CAMPINAS won an excellence award for being one of the few sanitation companies with audited Integrated Reporting. A positive factor for the sector, as business leaders are increasingly understanding the importance of disclosing sustainability metrics, with the certainty that transparency and issuing reports in a timely manner have an impact on performance and reputation organizational. The assurance of this information by a recognized company gives credibility to the reports released by the organization to interested audiences.
Although the objective of Integrated Reporting is to increase the transparency of accountability and improve the quality and depth of the information presented, its process goes further, representing value creation and ensuring that the organization's leadership safeguards the principles of good governance, management of risks and ongoing concern about the future of the organization.
Even though Integrated Reporting is a new approach in Brazil, it can provide important support for the value it can bring, especially in relations with shareholders, who together with other interested parties need to understand the company in its entirety, from its business model to environmental actions. Shareholders prioritize the search for economic-financial information, but they also started to search for socio-environmental information, as they realized that companies that improve the quality of their information make more assertive decisions.
Companies need to modify their behavior based on information. Accounting information can provide feedback performance, which guides management decisions about the future. The proper functioning of these mechanisms depends on the availability of accurate and reliable information and the assurance of this non-financial data. Accountants are experienced in providing information and assurance and as business decision makers. They are also involved in developing the company's strategy.
ROLE OF ENVIRONMENTAL ACCOUNTING IN THE SUSTAINABLE MANAGEMENT OF COMPANIES
Environmental accounting is an important tool for the sustainable management of companies, as it allows them to assess the impact of their activities on the environment and implement sustainable practices to minimize this impact.
In the relationship between sustainability and the role of accountants, environmental accounting in the sustainable management of companies includes, for example, the identification of environmental costs. In other words, environmental accounting allows companies to identify the costs associated with pollution and the depletion of natural resources, which can help them make more informed decisions about their processes and products.
It also includes environmental risk analysis, where environmental accounting can help companies assess the environmental risks associated with their activities, as well as opportunities for improvement. This can help the company stay ahead of environmental regulations and prepare for market changes.
Regarding the monitoring and disclosure of environmental information, environmental accounting allows companies to monitor and disclose information about their environmental performance, including greenhouse gas emissions, energy and water consumption, among others. This information can be useful in demonstrating the company's commitment to sustainability and improving transparency.
Environmental accounting can also help companies identify opportunities for improvement in their processes and products, allowing them to increase efficiency and reduce costs, whilst minimizing their environmental impact.
By implementing environmental accounting into their operations, companies can better manage their environmental impacts and minimize risks associated with environmental regulation and market changes. Additionally, environmental accounting can help companies demonstrate their commitment to sustainability to their customers. stakeholders, including shareholders, customers and the local community.
Research shows that environmental accounting can encourage companies to invest in clean and sustainable technologies, promoting innovation. We already see numerous innovations aimed at sustainability in companies, which shows that environmental accounting plays an important role in the sustainable management of companies, allowing them to evaluate and manage their environmental impacts, identify opportunities for efficiency and demonstrate their commitment to sustainability.
Laws related to ESG (Environmental, Social and Governance – Environmental, Social and Governance, in Portuguese) have gained increasing prominence in recent years due to growing concern about environmental, social and corporate governance issues.
A TATICCA provides services that help companies in the pursuit of sustainability from planning to implementation, monitoring and disclosure, including auditing the Integrated Report.
Our team can help identify and assess customer needs stakeholders, conducting internal audits to ensure the effectiveness of internal controls, preparation of sustainability reports, following the guidelines of the Global Reporting Initiative (GRI) and Integrated Reporting, independent assurance of information in sustainability reports, following the guidelines of the Global Reporting Initiative ( GRI) and Integrated Report, review of the current management of sustainability indicators in relation to the best practices in the sector, identifying opportunities for operational improvement, to go beyond the compliance and include prospective and strategic analyses.
Get in touch with TATICCA Allinial Global Brasil, which provides integrated auditing, accounting, taxes, corporate finance, financial advisor, risk advisory, technology, business consultancy and training. For more information, visit www.taticca.com.br or email taticca@taticca.com.br. Our company has professionals with extensive experience in the market and has certified methodologies for carrying out activities.