Accounting for a sustainable future

Sustainability offers a huge opportunity – and a risk – for accountants, according to new research out of Waikato Management School being launched on October 17.

Strategy-setting Roles

Funded by the London-based Chartered Institute of Management Accountants (CIMA), the survey of more than 730 New Zealand businesses found companies need to have management accountants in strategy-setting roles in order to achieve the best sustainability outcomes.

“A mind shift in accounting may be needed,” says Dr Stewart Lawrence, Professor of Accounting, who led the research. “There is a worldwide move towards ‘integrative’ reporting, bringing together social, environmental and financial data. This kind of reporting requires accountants to be involved in the development and monitoring of their organisation’s sustainable strategies so that the reports truly reflect what’s happening, rather than being ‘add-ons’ to financial reports.”

Professor Lawrence says if management accountants don’t fulfil this role, there’s a risk it will be taken on by others within the organisation.

“Many firms still cast management accountants in their traditional role of financial specialist, rather than as collaborators in driving towards sustainability as a goal,” he says. “Our research found some businesses which thought this narrow focus was an impediment to the strategic direction they wished to follow.”

Sustainable Not Annual

The researchers also found some respondents felt sustainability reporting was not a good fit with annual reporting, and were exploring new ways to report. These included ‘real-time’ reporting rather than static, once-a-year reporting

“We see potential for management accountants to be collaborators in the achievement of sustainability goals, but the potential has yet to be fully grasped,” says Professor Lawrence

“There is clearly a need for the profession to accept the challenge of implementing a new type of transparency and accountability. Our hope is that a next generation of management accountants will be able to collaborate with top management in the integration of financial well-being with community and stakeholder well-being.”

The research is being launched in Auckland by NZICA, the New Zealand Institute of Chartered Accountants, and in London by CIMA.

“The establishment of the NZICA Corporate Sector Advisory Group, with a clear sustainability mandate, will provide a strong basis for realising the potential contribution accountants can make to achieving sustainability outcomes for New Zealand business,” says NZICA Chief Executive Terry McLaughlin.

 “The survey reveals the potential for management accountants to drive the achievement of corporate sustainability goals,” says CIMA’s Head of Sustainability Sandra Rapacioli.

“It is vital for organisations to employ finance professionals who can provide the best strategy for long term sustainable success. Management accountants, including CIMA members, are ideally placed to do this as they are trained to analyse business performance, assess future risks and contribute to long term business strategy.”

About the Research

The research draws on the findings of three national surveys of New Zealand businesses’ uptake of sustainability practices since 2003. In the latest survey (2010), there were 750 respondents in total working for a range of organisations in roles including managing director, sustainability manager and accountant. The survey was supplemented by a series of follow-up interviews with a group of survey respondents and banking organisations.

The survey results are published in the report Sustainability and the role of the management accountantbyAssociate Professor Eva Collins, Professor Stewart Lawrence, Professor Juliet Roper, Associate Professor Jarrod Haar, University of Waikato Management School. CIMA Research Executive Summary Series, Vol 7, Issue 14. http://www.cimaglobal.com/Thought-leadership/Research-topics/Sustainability/

About CIMA

The Chartered Institute of Management Accountants, founded in 1919, is the world’s leading and largest professional body of Management Accountants, with 183,000 members and students operating in 168 countries, working at the heart of business. CIMA members and students work in industry, commerce, the public sector and not-for-profit organisations. CIMA works closely with employers and sponsors leading-edge research, constantly updating its qualification, professional experience requirements and continuing professional development to ensure it remains the employers’ choice when recruiting financially-trained business leaders.

www.cimaglobal.com

About NZICA

NZICA is New Zealand’s largest professional body and represents more than 32,000 members in New Zealand and over 90 other countries. It acts in the public interest through regulating the profession and promoting quality, integrity and expertise. Its members hold one of three prestigious professional accountancy designations: Chartered Accountant (CA), Associate Chartered Accountant (ACA) or Accounting Technician (AT).

www.nzica.com