Sustainability requires transformation: how we think, what we value, and a conscious decision to make a difference.
Not only did COVID-19 force us to pause and reflect on our health, but it also highlighted the vulnerability of life as we know it. Our exposure is directly linked to the world we live in, and the impact of our social and environmental decisions is more visible when faced with significant events such as a health or a water crisis and facing ‘day zero’. As the current social and environmental conditions have become untenable and undesirable, sustainability requires transformation: how we think, what we value, and a conscious decision to make a difference. Achieving a more sustainable world presupposes a worldview that considers well-being regarding earnings, health, security, and opportunities for every person to thrive. What are our professional values, and do we reflect on sustainability as a personal conviction?
Businesses are called on to be responsible and accountable for their green footprint. Professional accountants and auditors consult with businesses to develop their Environmental, Social and Governance (ESG) strategies. However, sustainability is not only a corporate issue. As a professional accountant, what is your personal ESG strategy and approach?
The corporate footprint
Corporates’ performance is measured and evaluated in goal-oriented achievements, operational activities, and profitability. Businesses are required to transform their impact on the environment, establish fair and equitable working conditions, and draft strategies and policies relating to ESG. However, for some, sustainability is seen as a cost line item instead of contributing to reserving value and creating value.
ESG has become somewhat of a ‘buzzword’ in the corporate world. With the new developments in sustainability reporting, such as the release by the JSE of its Sustainability and Climate Change disclosure guidelines as well as the establishment of the International Sustainability Standards Board (ISSB) under the IFRS Foundation and its corresponding publication of the IFRS sustainability disclosure standards (IFRS S1 and IFRS S2 Exposure Drafts), business entities are increasingly required to critically examine their response to sustainability and ESG. In essence, they are required to consider how factors usually treated as externalities, such as climate change and social unrest, impact their ability to create value. In the same disposition, there is a need for business entities to quantify and account beyond only financial performance and report on the impact on the world, such as through emissions, contribution to fair labour practices and protection of human rights, both through its operations and throughout the value chain.
Professional responsibility
Environmentally committed professional accountants perform assurance and consultancy work using a ‘green’ lens. Further, accountants consider the business’s expected financial stability and its management’s social and environmental convictions when making financial and investment decisions. In this role, accountants have the power to assist clients in solving challenges by providing meaningful and measurable value solutions even when it is difficult to account for factors that pose material risks to the longevity of the entity, for example having a continuous supply of raw materials. Equally, as a responsible citizen, a professional accountant evaluates and advises clients on environmental rehabilitation provisions and tax obligations.
Although most accountants generally believe in value-driven sustainability governance, it is important not to view ESG using a compliance lens. Similar to ethics, compliance-based sustainability may reduce a corporate’s tendency to commit illegal, unethical sustainability acts, but this approach does not reduce the propensity to commit to sustainability goals. As accountants, it is our professional responsibility to guide clients on practical and meaningful sustainability goals that include a business environment that is responsive and tolerant to cultural diversity and individual differences.
Professional ethics and personal values
Ethics and ethical conduct are core attributes associated with professionalism, stewardship and accountability within the accounting profession. Sustainability requires ethical considerations, responsibilities and values, acting for the public good. Values are those beliefs, characteristics and behaviour most important to guide our thoughts and actions; they are deeply entrenched in our culture and personal beliefs.
Personal values are context determined, and a deliberate transformational change in personal values towards sustainability is possible. As professional accountants, can we comment on corporate social responsibility while failing to get involved in community initiatives and non-profit organisations? Can we criticise businesses for their environmental waste while we are not conscientious of our home recycling?
Accountability as a responsible citizen
Where do you start when you are called to be accountable for sustainability in your personal life? It begins with an understanding and awareness. Know your carbon footprint, water consumption and electricity usage, and make daily decisions based on reducing this footprint. Transform the way you live your life. It is not only about wasteful spending but wasteful consumption. Environmentally we are thinking about buying organic food, recycling, and limiting waste. Socially we are thinking about community activities and fairness to our neighbours and people working for us. Share responsibilities and do your part. As responsible citizens, we must demonstrate a commitment to sustainability. This requires a personal conviction based on moral awareness and ethical values.
Personal conviction
The responsibility for sustainability starts at a personal level. It begins at home. How we view ourselves and the world and identifying what forms of improvement are required motivates personal values such as caring, purposeful, inclusiveness, accountability, integrity and commitment, to name a few. Thus, it is essential to consider the social and environmental value of decisions and embrace a more profound value system in our personal lives.
Sustainability is an ethical decision that requires personal conviction.
Author
Professor Ilse Lubbe (CA)SA, College of Accounting, University of Cape Town
