Accounting, in many ways, holds the keys to advancing corporate sustainability. What organizations measure and report – and just as importantly, what they don’t – drives strategy and performance. A firm’s negative impacts and positive contributions to ecosystems, the climate and communities can be difficult to measure and often seen as external to the organization. As a result, these impacts and contributions are not fully considered in corporate decision-making processes.
This dynamic is rapidly changing. As sustainability, climate change and social issues have emerged as critically important for investors, the measurement and reporting of ESG (environmental, social and governance) factors are seen as fundamental to assessing value. The accounting ecosystem (i.e. accounting standard setters, its professional associations, academics and firms) is at the centre of a global movement to consolidate and standardize ESG reporting, which will likely have profound impact through shifting financial markets and corporate executives towards sustainability.
This interface between accounting and sustainability is a major focus at Ivey. Two faculty members – Diane-Laure Arjaliès and Nadine de Gannes – are members of both the Accounting and Sustainability Groups. The CPA Ontario Centre for Accounting and the Public Interest, led by Associate Professor Mitch Stein, works at the intersection of accounting practice and policy and has been increasingly tackling the ESG agenda. For example, recent Centre webinars have examined the linking of ESG targets to executive compensation and the related taxation considerations.
An upcoming virtual event on March 11, jointly hosted by the Centre for Building Sustainable Value and the CPA Ontario Centre – Sustainable Finance: The reshaping of capital markets and the new era of corporate reporting – will focus further on some of the major shifts in sustainability in finance and accounting.
Given the pace of developments, this focus on the intersection between accounting and sustainability will continue to gain momentum at Ivey. For example, work has started on a new interactive web-based tool to help practitioners and students navigate the expanding ESG landscape.