Vital Role Of CA In Promoting Environmental & Social Responsibility
Sustainability involves meeting the present generation's needs without jeopardizing the needs of future generations. It entails striking a harmonious equilibrium between economic advancement, environmental preservation, and societal well-being. Adopting a sustainable development mindset entails embracing a long-term perspective that lays the groundwork for a robust economic foundation within a country.
At the core of any economic progress lie fundamental principles of ethics and governance, which foster trust and confidence in the growth trajectory of organizations, nations, and the global community. As custodians to build ethics and governance practises, Chartered Accountants can play a vital role in strengthening this foundation for a sustainable future for the country.
Presently, chartered accountants assume diverse roles within and beyond organizations. They serve as prominent figures such as CEOs, CFOs, and members of management teams. Chartered accountants also function as auditors, both internally and externally, while providing valuable advisory and consultancy services. Furthermore, they contribute as bankers, investors, and in various other capacities. These are just a few examples illustrating the multitude of channels through which companies engage the services of chartered accountants. This extensive reliance on chartered accountants stems from the profession's esteemed reputation, characterized by dignity, respect, and unwavering trust.
While the primary focus of ESG currently revolves around compliance and reporting for investors, stakeholders, and regulators, the true essence of ESG lies in driving a transformation in the fundamental structure, governance, and management practices of businesses. The mindset shift can be enabled by Chartered Accountants as leaders in various capacities in many ways such as :
1. Walk the Talk: Governance plays a critical role in setting the tone and building Sustainable businesses. As leaders, advisors and consultants Chartered Accountants should lead by example, inspire their teams, and demonstrate a deep understanding of Sustainability standards and practises, it encourages employees to develop a similar mindset. By involving employees in building a sustainable business, we can harness the collective efforts and contributions of the entire organisation.
2. Considering E, S, and G aspects in financial decisions and Reporting: As custodians of finance in organisations, CFOs and senior finance leaders can integrate environmental, social, and governance factors into their decision-making and sustainability reporting processes. This involves evaluating the potential impacts of investments or financial decisions on the environment, society, and corporate governance practices and its reporting.
3. Transparency in Sustainability Reporting: In the reporting of ESG and its parameters, Chartered Accountants can strengthen the transparency and accountability within the organisational reporting process and adherence to sustainability standards. Robust processes can be built within an organisation to eliminate any greenwashing by organizations through diligent and robust financial and control monitoring practices.
4. Sustainability Assurance: Chartered accountants can conduct environmental audits to assess an organization's environmental impact. They can examine the company's operations, processes, and systems to identify areas where sustainability improvements can be made. This includes evaluating energy consumption, waste management, water usage, and carbon emissions. By providing detailed reports and recommendations, chartered accountants help organisations identify opportunities for sustainable practices.
5. Social Impact Assessment: Social projects have the potential to significantly contribute to a country's economy when appropriately utilized and ensure long-term impacts. As chartered accountants, considerable value can be added to the social impact process of an organization through robust processes and conducting social audits to report the project's impact to the management.
6. ESG Compliances: ESG reporting affects all aspects of an organization and entails various compliances that cut across different functions, departments, and processes. Chartered accountants, with their extensive expertise in various laws and regulations, can play a crucial role in ensuring not only compliance with these requirements but also streamlining efforts and minimizing duplication of work when it comes to ESG reporting.
Chartered Accountants possess a unique set of skills, experience, and ethical standards that give them the ability to influence and impact decisions at both organisational and economic levels. Their versatility and adaptability allow them to wear multiple hats and contribute significantly to building momentum for driving sustainability.
CA Sanjeev Singhal, Chair UNCTAD ISAR 39th Session, Central Council Member, ICAI
