Guidance to the ICAS Code of Ethics: Sustainability (2022)

Society is changing. The sustainability, or Environmental, Social and Governance (“ESG”), agenda is now becoming a company’s licence to exist.

There is an ever-growing emphasis on sustainability and ESG at government and regulatory level, as well as increased expectations for organisations to behave responsibly. Organisations need to be thinking about the impact of sustainability/ESG on their organisation and the impact of their organisation on the environment and society.

Shareholder value is converging with stakeholder value. As well as making profits for shareholders, companies also need to have an understanding of the awareness of their broader impact on society, and whilst the “E” is clearly important, sustainability is not just about climate change - the importance of societal matters (the “S”) as well as governance and ethical corporate cultures (the “G”) are of equal significance. The rise of sustainability/ESG is essentially a re-assertion of long-term thinking – it moves thinking beyond the short term to a responsibility for the longer time frame. CAs are a vital part of any organisation.

They undertake many different roles across a variety of sectors. A CA can find themselves being involved in sustainability related matters in many ways including: accounting for, and reporting on, climate change and environmental considerations; assessing and managing the risk and opportunities associated with the social inclusion and equality agenda; providing assurance on an organisation’s sustainability report; being a board member responsible for setting the ‘tone at the top’ of an organisation and ensuring that a culture of ‘doing the right thing’ exists at all levels within the organisation. This rise in the importance of sustainability/ESG drives new and different requirements for the accountancy profession.

The role of the CA is broadening to include greater focus on non-financial information. The people to whom organisations are responsible is now a broader group and therefore CAs need to be better communicators of data to a broader set of stakeholders – not just shareholders