Earlier in the year, International Federation of Accountants (IFAC) President Alan Johnson was in Zimbabwe, and he made a lot of interesting remarks on the role of professional accountants in saving the world from the impending climate-change-related catastrophe. Prof Mervyn King has written at length about how accountants can save the planet. This article is inspired by these two visionaries’ thoughts and input on the matter. Whilst the talk is always on how accountants should lead the necessary changes that we need to make, I want to expand it to all business leaders. The views of the luminaries I referred above are still very much applicable especially in the local context because professional accountants make up the bulk of the business leaders. This is due to the fact that Professional Accountancy Organisations (PAOs) have a deliberate effort coupled with the skills and resources required to mould business leaders.
It is business leaders, led by accountants that are in my view the largest stakeholder when it comes to what needs to be done to save the planet. The government and political leaders are arguably equally important, but I do not believe that they can go it alone. Policies can be formulated to ensure that steps are taken to resolve the climate crisis and then businesses can come in to run with their objectives in a manner that is not detrimental to the planet. Below are some of the reasons why it is incumbent upon accountants and business leaders to lead the charge to save our plant. I will go further and attempt to highlight for each point the further steps leaders can take to be more focussed, methodical, and deliberate.
Accountants and business leaders are at the centre of decision making. Sometimes just one decision can make or break an entire strategy. Of course, culture is probably the biggest threat to strategies, but decisions and the tone at the top form part of the foundation for any culture. Coming back to strategy, business leaders including their boards point their organisations in the direction in which they need to run. An effective board must be diverse including having a professional accountant, meaning accountants are at both an operational and a strategic level. This is why the accountancy profession often gets singled out as the one to lead climate actions.
Accountants capture, report and analyse data, albeit with less of the capturing as the profession takes advantage of the various technologies on offer. These skills, particularly reporting and analysis are useful to measure the efforts to do away with the strategies with a negative impact on the planet. Projections on the sustainability of both the entity and the environment are important to strike the necessary balance. Decisions must be informed by the information presented by the accountants to ensure there is no prejudice to the planet.
Grasp of business
It goes without saying that business leaders need to understand business. The accountant, be they at strategic level or operational level will certainly have a good grasp of business. This is assuming of course that they are a well-trained and up to date professional accountant. This is pertinent because it is a key requirement to be fused in the adjustments required for businesses to become pro-environment.
Any climate friendly strategies may fail to have the support and desired effect if they do not tie into the tenets of good business. After all, livelihoods need to be protected as much as possible and avoid leaving certain groups vulnerable after the changes to business models. Furthermore, this will help avoid push back and resistance from individuals that may feel threatened. This could be employees fearing for their jobs because the organisation will cease to be viable or shareholders losing an investment, again because the business is no longer as profitable or viable as before. Accountants and business leaders therefore need to infuse their knowledge of business and the changes required to businesses’ operations.
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Collaboration with experts
Successful business leaders have an inherent knack for working with others who possess key skills. Professional accountants are also well trained in the area of collaboration with experts. As much as the talk of climate change has been on-going for decades, I shall hazard a comment and say most of us still do not have a full grasp of the issue. Experts in this field need willing and able partners at the correct level to help reform business strategies to align with the need to run circular economies led by businesses.
Business leaders and accountants need to actively seek out experts to come in at a strategic level to assist them with what needs to be done to align with the climate agenda, while at the same time ensuring or even improving profitability.
There are several global forums that support business leaders and accountants for example, the Chartered Accountants Worldwide, which is a grouping of about 98% of the world’s CAs. This allows for sharing knowledge and insights with an international perspective being available through one’s membership body. Where a business leader cannot access such a forum, depending on their underlying profession and its structures, they need to lean on their professional accountant who will most likely have access to a seemingly endless pool of resources. Other examples include platforms from international brands like ACCA or AICPA & CIMA where global resources can also be accessed. Business strategies should be informed by the thought leadership material from membership organisations that have dedicated resources to research and make recommendations on key topics, such as clim
Any action taken must be sincere and this will call on the ethical principles of the leadership of businesses. Accountants are grounded in strong principles of good governance and ethics. This will therefore make it crucially important that the business leaders and accountants make the necessary call for the change that is required. Sometimes organisations can pay lip service to issues and merely present information in a manner meant to convince stakeholders as opposed to making an actual difference. I remember in one meeting, one of the great leaders who inspires me once highlighted that for real change to occur, sincerity is a must as opposed to what he called a mindless tick-box approach.
Whilst I did not exhaust all the points around this topic, from the above few, I agree fully with the notion that accountants can save the planet. As I highlighted earlier, I chose to expand this to all business leaders regardless of what their underlying qualification is because of the authority they wield. There are scenarios where the business leader is also an accountant, but if that is not the case, they need to lean on their accountants as they drive their business to focus on creating strategies focussed on the planet, people and profits.
Mavengere is the technical director at the Institute of Chartered Accountants of Zimbabwe (Icaz), which is the largest and longest standing PAO in Zimbabwe, having been established on 11 January 1918, and is a body corporate incorporated under the Chartered Accountants Act [Chapter 27:02]. Icaz provides leadership on the development, promotion, and improvement of the accountancy profession focusing in the areas of accounting education, assurance, good governance practices and leadership and organisational excellence. — [email protected],Twitter: @OwenMavengere and LinkedIn: Owen Mavengere.