Accounting
Accountants eye sustainable business management
Accountants are increasingly being asked to deal with sustainability issues as more businesses are called upon by investors to report on how they are dealing with issues like climate change and carbon emissions.
This week, amid the United Nations COP29 climate change conference in Azerbaijan, business leaders have been playing a larger role, including fossil fuel companies, prompting an
ESG standard-setters have also been playing a role at COP, with groups like the Global Reporting Initiative and the Carbon Disclosure Project
Last month, the Institute of Management Accountants released a
“The main focus and the main attention right now in the ESG field is going to compliance, to the reporting parts,” said Brigitte de Graaff, who chaired the IMA committee that authored the report. “There are a lot of rules and regulations out there.”
For right now, those rules and regulations are mostly voluntary in the U.S., especially with the
“In Europe, of course, there is not a lot of voluntary reporting for the larger companies anymore, but it’s all mandatory with a huge amount of data points and aspects that they need to report, so there’s a lot of focus right now on how to comply with these rules and regulations,” said de Graaff. “However, there’s also a lot of discussion going on about whether it should be about compliance. What’s the reason for reporting all these aspects? For us what was really important was that there is a lot of opportunity for management accountants to work with this kind of information.”
She sees value beyond purely disclosing ESG information. “If you use this information, and you integrate this in your organization, there’s much more value that you can get out of it, and it’s also much more part of what kind of value you are creating as an organization, and it’s much more aligned with what you were doing,” said de Graaff.
The report discusses the benefits of the information, and how management accountants can play an important role. “You can use and integrate this in your FP&A and your planning processes,” said de Graaff. “You can integrate this kind of information in your strategy, something that management accountants are very well equipped for, but also to track performance and see how you’re actually achieving your goals, not only on financial aspects, but also on these nonfinancial aspects that are much broader than the E, S and G factors.”
The report discusses how to go beyond the generic environmental, social and governance parts of ESG to understand how they relate to a business’s core operations and make it more sustainable.
Management accountants can even get involved in areas such as biodiversity. “Even though, as a management accountant, you might not be an expert on marine biology and what the impact of your organization is underwater, you are able to tell what are the checks that have been performed on this,” said de Graaf. “Is this a common standard? Is this information that is consistently being monitored throughout the organization? Or is it different and what are the benchmarks? What are the other standards? These kinds of processes are something that management accountants are well aware of, and how they can check the quality of this information without being a subject matter expert on every broad aspect that may entail in this ESG journey that an organization is on.”
ESG can become part of the other work that management accountants are already involved in performing for their organizations.
“Ultimately there are a lot of competencies that management accountants were already doing in their organization, and ESG might sometimes seem unrelated, but it basically ties in into the competencies that we already know,” said de Graaff. “I hope that with this report, we can also show that the competencies that we are so familiar with, that we’ve been dealing with other strands of financial information, that you can basically also use these competencies in the ESG arena. Even though there’s a lot that seems very new, if you are aware of how you can tie that in, you can use the skills that you already have, the skill set that you have as a management accountant, to really improve your risk management processes, your business acumen, your operational decision making, etc. I hope that with this publication, we can also take away a little bit of the big fear that might be around a huge topic, as ESG is now. This is actually just a very interesting and exciting way to look at this kind of information, and we are very well equipped to help organizations navigating through this changing ESG regulation world.”
KPMG International reported annual aggregated revenues of its member firms globally grew 5.1% to $38.4 billion for the fiscal year ending Sept. 30, 2024.
The 5.1% increase over fiscal year 2023 was in local currency, and measured 5.4% in U.S. dollars.
The Big Four firm attributed this growth to its “collective strategy” and multibillion-dollar investments in aligned global priorities, while supporting clients through disruptions like artificial intelligence and shifting environmental, social and governance priorities.
The firm reported that tax and legal services grew by 10%, which the firm said was driven by client demand for its AI-enabled managed service and transformation capability, legal capability, and helping clients navigate global tax reform. KPMG also grew audit 6% and advisory 2%.
Last year, KPMG announced a U.S. $4.2 billion investment plan over three years as part of its collective strategy to build trust and drive growth, with over U.S. $1.7 billion invested across the KPMG network in FY24, with a focus on technology and AI, talent and ESG.
Simon Dawson/Bloomberg
KPMG grew its headcount by 1% to 275,288, which included targeted hiring in areas like tax and technology.
In terms of KPMG’s regional growth, the Europe, Middle East and Africa region was up 8%, the Americas up 4%, and Asia Pacific up 1%.
The firm also noted it has continued to invest in ESG services due to client demand, and previously addressed its commitment to becoming more responsible within its own business in the firm’s
The Financial Accounting Standards Board today proposed an Accounting Standards Update related to environmental credits and environmental credits obligations.
The changes in the
Patrick Dorsman/Financial Accounting Foundation
Stakeholders noted that entities are increasingly subject to emissions-related government mandates and regulatory compliance programs, which often results in obligations that are settled with environmental credits. In addition, some entities voluntarily purchase environmental credits from third parties. Stakeholders also noted that generally accepted accounting principles does not provide specific guidance on how to recognize and measure this activity, which results in diversity in practice.
The proposed ASU provides recognition, measurement, presentation and disclosure requirements for all entities that purchase or hold environmental credits or have a regulatory compliance obligation that may be settled with those credits.
However, as the FASB’s role is to establish and improve financial accounting and reporting standards, this proposal only addresses amounts reported in financial statements. Measuring or tracking an entity’s voluntary emissions initiatives or actual greenhouse gas emissions are not addressed by the FASB or these proposed amendments.
The FASB is accepting review and input until April 15, 2025. The proposed ASU and information on how to submit comments is available at
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