In today's generation, customers are now focused on a company's values and commitment to sustainability. They look beyond achievements to see how the business minimizes its environmental footprint, treats its employees well, and positively contributes to society.
This growing demand for ethical practices extends to accounting firms, which play an important role in guiding the financial and strategic decisions of their clients.
As stakeholders increasingly demand transparency and accountability, accounting firms must integrate sustainability into their practices.
In this blog, we will discuss what sustainability in accounting is, the six compelling reasons why adopting sustainable practices is important for accounting firms, and how accountants can contribute to sustainability.
Sustainability accounting is all about tracking and understanding a company's impact on the environment and society. It looks at everything from how the business affects its surroundings, as well as its commitment to fair employee compensation and support to the community.
By examining the environmental, social, and governance (ESG) factors, sustainability accounting provides a comprehensive overview of a company’s global impact.
Additionally, with over two-thirds of the Fortune Global 500 companies issuing annual sustainability reports, as highlighted by the ACCA Global, the trend towards sustainability accounting is gaining ground, underscoring its increasing relevance in today’s business.
Here are six (6) reasons why sustainability is important for accounting firms:
Investors are increasingly considering ESG criteria when making investment decisions. Accounting firms that demonstrate sustainability in their operations and reporting are more likely to attract investment from socially responsible investors.
Beyond attracting investors, sustainability practices often lead to significant cost savings. By reducing waste, conserving energy, and optimising resource use, accounting firms can lower their operating costs.
Firms that adopt sustainable practices often position themselves ahead of the competition. Being recognised as a sustainable firm can differentiate it in the market, appealing to a broader range of clients and projects.
Embracing sustainability can significantly enhance an accounting firm's reputation. Firms known for their commitment to sustainable practices are perceived as more trustworthy and forward-thinking, which can attract new clients who prioritise ethical business practices.
Modern workers, especially millennials and Gen Z, prefer to work for companies that align with their values. Accounting firms that actively promote their sustainability initiatives might find it easier to attract and retain talented individuals who are eager to contribute to meaningful work and make a positive impact on society and the environment.
With more laws focusing on environmental and social issues, being ahead in sustainability reporting means fewer headaches when it comes to compliance - avoiding potential fines and legal issues.
Aside from the importance of sustainability for accounting firms, it is also important to know how accountants can contribute to this cause. Here’s how:
Accountants can help by adding information about environmental and social efforts into financial reports. This shows not just how a company is performing well economically, but also in terms of its social and environmental impact. This full picture helps everyone make better decisions.
Accountants are great at dealing with numbers and details. They can use these skills to make sure the company is open about its green efforts. By tracking and sharing clear information on how a company is doing environmentally, they build trust and keep everyone informed.
Accountants also have a knack for spotting where the company can cut down on wasteful use of resources. By finding ways to use resources better, companies can save money all while being mindful of the environment.
Accountants can guide companies on where to invest by promoting the benefits of sustainable projects. Investments in renewable energy or green technologies, for example, not only do good for the environment but are also financially sound choices in the long-term.
Having the right accountants is important in making the company more sustainable. They do more than working with numbers by assisting companies in becoming more environmentally friendly. Having their skills can help the entire organisation to become more conscious of their ESG efforts.
Do you need help assessing your environmental impacts? Our accountants at D&V Philippines are at your service.
We are an accounting outsourcing company that can be your assistance for your back office needs such as reporting and bookkeeping. Schedule a free consultation with us today.
You may also download out whitepaper, Finding the Right Talents: D&V Philippines’ Solutions to Modern Accounting Firms, for more information.