Who will encounter achieving internal control over sustainability information?
Finance functions
The increasing demand for sustainability information has shifted the complexion of sustainability reporting from “nice to have” to “need to have.” The resulting regulatory requirements and standards development have shifted the locus of that information, from primarily “stand-alone” sustainability reports prepared by external relations or other departments to the financial statements and regulatory filings of the enterprise. This has thrust the finance function into these activities front and center. This new responsibility for implementing internal controls over sustainability reporting is a natural extension of one of the fundamental technical skills of the accounting profession.
Finance professionals
In addition to establishing effective controls over reporting information, the skills necessary to develop a sustainability strategy, manage sustainability performance, and ensure appropriate governance are also in the “wheelhouse” of today’s management accounting professional. Similarly, analyzing this data and contributing to the decision-making of the enterprise is also a core management accounting skill. As the enterprise moves forward in its sustainability journey, these analysis skills will be critical to the evaluation of necessary investments to ensure risk mitigation or adaptation, or to take advantage of upside opportunities.
Organizations
At the organizational level, implementing the ICIF-2013 framework and applying the ICSR guidance provides a variety of benefits, especially for organizations that “have aligned their sustainable business objectives with their business strategies and focused on the issues most likely to contribute to performance and value preservation and creation.”17 As highlighted in the ICSR guidance, these benefits may include:
Alignment of an organization’s employees, partners, and stakeholders with its commitment to purpose and articulated objectives.
Enhanced data quality, utility, comparability, and reliability.
Strengthened ability to support operations and compliance objectives.
Better-informed decision-making by internal management, external investors, and other stakeholders.
Enhanced understanding of risks and the ability to mitigate them.
Greater overall market efficiency.
Increased access to and lowered cost of capital.
