Ethical issues in sustainability reporting

We need to ensure that poor quality application of the professional accountant’s code of ethics doesn’t undermine positive progress in implementing sustainability reporting by businesses.

The latest research from ACCA examines the ethical dilemmas regularly faced by accountants and other professionals involved in implementing sustainability reporting.

Launched to mark Global Ethics Day, the resulting guide, Ethical Dilemmas in an Era of Sustainability Reporting, identifies the risks around ethics and independence associated with sustainability reporting.

At a time when the regulatory requirements for sustainability reporting are growing, the guide provides real-world scenarios, written in partnership with academics from Warwick Business School, for accountants and non-accountants, to equip them to manage dilemmas often presented by:

– Risks of greenwashing – disinformation disseminated by an organisation so as to present an environmentally responsible public image.

– Weak processes.

– Lacking technical knowledge.

– Compromises in objectivity and independence.

Report co-author Sharon Machado, head of sustainable business at ACCA, said, "We have a collective obligation to future generations to operate sustainably, both individually and as organisations, and it’s great to see more and more businesses embracing sustainability reporting.

"But we need to be alert to the risks and ensure quality and consistency. For professional accountants, this is an opportunity to provide strong leadership and insight, in turn helping to drive ethical and sustainability-focused decision-making. This guide will help accountants and other professionals to create balanced reports that are a fair reflection of organisations’ performance and impacts."

The guide aims to help users avoid consequences such as poor-quality reporting, including greenwashing, loss of trust and faulty decision-making.

Further practical support is provided through a checklist of questions to drive better application of the International Ethics Standards Board for Accountants Code principles, including professional scepticism and curiosity.

According to the report co-authors, Prof Lisa Weaver and Darren Sparkes, associate professor at Warwick Business, "The scenarios contained in this report provide opportunities for individuals and teams to explore some of the ethical tensions that can arise in the complex arena of sustainability reporting. As professionals, we have a moral duty to uphold the ethical code and to champion good practice, within our profession and with professionals from diverse backgrounds, working together to enhance credibility in sustainability reporting."