Ethics, trust and sustainability


The Institute of Chartered Accountants in England & Wales (ICAEW) refers to sustainability as “a notion that is rooted in the ideal of sustainable development, quoting the United Nations Brundtland Commission, which referred to this as development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”

With Global Ethics Day on October 16, the level of discussion and awareness building in the different professional sectors continues to examine the impact of today’s business decisions on the future. There is a worldwide call for ethical leadership and greater transparency in how business is being conducted. The level of trust in world decision makers and leaders seem to be diminishing as citizens take to social media platforms with the aim of holding leaders accountable for decisions that aren’t aligned to their ethical value system.

Having no formal definition for sustainability, there is an understanding that sustainable development can only be acquired through responsible actions that will boost prosperity for the rich, poor and middle-income citizens, build economic growth and address the social needs of everyone, while protecting the planet.

How can accountants get involved in this call for action? It is believed that accountants, as ethical and highly skilled professionals responsible for financial reporting, can expand their reporting to cover “environmental, social and economic performance – often being referred to as the triple bottom line.”

Narayanan Vaidyanathan describes the accounting profession as “being a credible steward of the organisation’s values, and acting as its ethical conscience.” Value creation is important to all organisations and accountants are viewed as key enablers in building trust in organisations.

There have been successful developments in corporate reporting which are aimed at enhanced reporting based on value creation and sustainable development rather than on traditional financial performance. There are many solutions that exist to align corporate strategies with social and environmental outcomes. One such solution is the International Integrated Reporting Council (IIRC) whose vision is to promote integrated reporting so that it becomes the corporate reporting norm. There is growing demand for transformative change in how business is conducted and business activities are reported.

Integrated reporting is based on the fact that business decisions are interdependent on various activities and considerations internal and external to the business and its environment. Therefore, there is an integrated thinking cycle, which explores the capital allocations and value creation in the short, medium and long term.

An integrated report is described as “more than a summary of information in other communications rather it makes explicit the connectivity of information to communicate how value is created over time.” The report also includes a statement from those charged with governance that includes an acknowledgement of their responsibility to ensure the integrity of the integrated report.

As financial gatekeepers and internal business partners, professional accountants can drive the need for integrated thinking and reporting. The fact that accountants are well positioned to understand the strategic objectives and to report on them, creates the opportunity for them to become key enablers in an organisation for “integrated governance, strategy, performance management, and ultimately an integrated report.”

This is the ultimate opportunity for the accountant to help businesses become more transparent in their decision making and to ensure that ethical behaviour is seen as critical in the decision-making process so sustainable development can be achieved. The use of technology and innovation to boost the triple bottom line should be employed in a responsible manner, whereas social and environmental value creation are achieved in a sustainable manner.

The ACCA has embarked on the theme; “Ethics, trust and sustainability” as Helen Brand OBE, ACCA’s chief executive, says: ‘We’re delighted again to shine the light on ethics globally. ACCA accountants have leading knowledge in ethical issues combined with a wider view of business success that covers financial, ethical, digital and sustainability issues. We’re at the leading edge of this change, working with our partners to equip our students and members with the right tools, skills and knowledge to succeed."

Recent search done by the ACCA on social and environmental value creation as written by Jimmy Greer, discusses accountants as the value creation enablers of the future and the challenges faced by professional accountants and their teams to build competencies to achieve this goal.

He identified four key areas where competencies must be developed:

• To build scientific literacy

• To understand societal impact

• To deepen collaboration internally and externally, and

• To recognise the interconnectedness of social and environmental issues.

ACCA continues to collaborate and work with other institutions to ensure that their members, students and stakeholders are equipped with the best tools to deal with the growing ethical complexities in an ever-changing business environment, where sustainability is at the forefront.


"Ethics, trust and sustainability"

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