As organisations face pressures from regulators, investors and governments to reduce their carbon footprint, a new AICPA® & CIMA® report advises on management accountants’ role in reporting on two of the United Nations Sustainable Development Goals (SDGs)
The findings in Challenges in Reporting on the United Nations Sustainable Development Goals: A Management Accounting Focus revealed that applying the United Nations’ reporting tools, techniques and practices is an essential organisational response to meet the expectations of external stakeholders. The research uncovered opportunities for an evolving management accounting role — a rejuvenated role with a host of new activities.
Role model company provides key learnings and experiences
Adopting a case-study approach, our research analysed the work of a multi-utility company, called Ita-Alfa (a fictitious name to ensure anonymity). Ita-Alfa is involved in the production and sale of renewable energy, electricity, gas, water and waste management services. Their business model is to create shared sustainable value for the company and wider stakeholders over time. The main findings included:
Management accountants’ role in energy and climate-change reporting
Social and environmental issues are a crucial consideration.
Being sustainable for Ita-Alfa meant developing a holistic and circular strategy.
Using sustainability management accounting and control mechanisms is vital.
Within Ita-Alfa’s sustainability reporting process, they made use of sustainability management accounting and control mechanisms to continuously measure, manage and improve the interaction between business, society and environment.
Management accountants in SDG 7, Affordable and Clean Energy, and SDG 13, Climate Action
Addressing SDG 7, Affordable and Clean Energy, and SDG 13, Climate Action, is essential. The Ita-Alfa sustainability reporting process contributed to the definition of KPIs and non-financial indicators for Goal 7 and Goal 13 of the UN SDGs.
Contributing to tackling the “ecological transition” is a business imperative. The green transition was a top priority for Ita-Alfa’s management accountants. They contributed to identifying actions and KPIs for specific goals such as “green energy sold to the market” for Goal 7.
Management accountants have a “duty of care towards stakeholders.” Environmental education and awareness for all stakeholders is a key action in order to achieve Goal 7 and Goal 13.
Management accounting: Managing the challenges in reporting SDG 7, Affordable and Clean Energy, and SDG 13, Climate Action
Success means being open to new ways of working within a dynamic ecosystem — while management accountants face many challenges like the preparation of sustainability reports and practical implementation of SDGs, Ita-Alfa demonstrated how challenges can be turned into opportunities. They embraced new responsibilities, adopted new working approaches and applied different reporting tools, techniques and practices to cope with SDG reporting challenges, which produced positive results.
SDGs compliance is worth the effort — by complying with SDGs, Ita-Alfa contributed to sustainability, gained an understanding of how to manage risks, and aligned its strategy with global challenges.
The report incorporates a visual at-a-glance view of what management accountants can do. The visual representation is a 7-steps-cycle of management accountants’ work to implement and address the challenges embedded in SDGs reporting.
Read the report to overcome Challenges in Reporting on the United Nations Sustainable Development Goals.