Dive Brief:
- Accountants need to benefit their companies and communities by embracing a “social agenda” that ensures wealth equality, a living wage for workers within their businesses and throughout their supply chains, and animal welfare, according to the Association of Chartered Certified Accountants.
- “The future of the accountancy and finance profession is one that embraces sustainability, including the social agenda, in a just transition which balances social equity with environmental action,” the ACCA said in a report.
- “There is a strong business imperative for action now and this agenda needs to be embedded into the view of strategy and performance,” the association said. “A sustainable world is not a luxury but a necessity — the time to act is now.”
Dive Insight:
The push for sustainability by investors, regulators and advocates for environmental protection and social justice has come under fire from a range of critics, including business groups, Republican lawmakers and champions of a limited government role in the economy.
The critics have called sustainability — and the related paradigm of environmental, social and governance best practices — “woke capitalism.”
“ESG is a pernicious strategy, because it allows the left to accomplish what it could never hope to achieve at the ballot box or through competition in the free market,” former Vice President Mike Pence said last year, joining opponents as varied as Berkshire Hathaway Vice Chair Charles Munger and Tesla CEO Elon Musk.
Some libertarian-leaning critics share the view that economist Milton Friedman detailed 53 years ago in an essay entitled, “The Social Responsibility of Business is to Increase its Profits.”
The ACCA apparently disagrees.
“The social agenda, as set out in this report, is a broad one and requires organizations to act now,” ACCA Chief Executive Helen Brand said in a forward to the study. “The accountancy and finance profession has an opportunity to play its full part in enabling the just transition, not least the social aspect — one that it cannot afford to shirk.”
By helping to apply a social agenda to business operations, an accountant will improve a company’s reputation among customers, communities and government officials, the ACCA said, while noting the effort may lead to loss of customers, resistance from host communities and opposition from regulators and lobbying groups.
Integrating the social agenda into business strategy will open the way to new market opportunities, bolster investor confidence, strengthen government relations, increase community trust and improve “employee engagement,” the association said.
Also, using the social agenda as a yardstick for company performance will ensure “profit is not placed on a pedestal over [the] planet and people,” ACCA said. Instead, the “impact of decision-making is viewed through [a] financial and non-financial lens, with equal weight.”
The ACCA’s social agenda for accountants includes 24 points, including “flexible working patterns” that sustain economic growth and protect families, and “ensuring that all employees are paid a living wage as calculated by reference to the location in which they work.”
Accountants should also try to “ensure that wealth is equally distributed into the communities through the living wage and also through social responsibility activities that improve the quality of life,” the association said.
ACCA also deems animal welfare a goal for accountants. The objective “can be a key aspect of the social well-being as they relate to the overall social license to operate,” the association said, noting that “measurement of this category presents challenges.”
