In many ways the principles of environmental, social and governance (ESG) awareness reflect the principles of being a CPA, having strong ethics, and being accountable and transparent about the way you conduct business. As leaders in business, CPAs need to be adaptive to change and drivers of business strategy. Strategy that increasingly demands a broader perspective.
CPA Australia strives to be a leader in the field of ESG, an area previously known as corporate social responsibility (CSR).
ESG and the profession
With their skills in collecting, analysing and reporting financial information, CPAs can expect to see increasing demand for their services, and prepare to deliver leadership on the imperatives that link ESG and the finance function.
ESG initiatives are particularly useful in the management of intangible assets such as brand and reputation. Intangible assets require active management if they are to be maintained or increased in value and increasingly business is recognising the value that an integrated ESG strategy can deliver.
Non-financial reporting
The demand for non-financial reporting has gathered momentum, particularly amongst customers and investors. Non-financial reporting recognises the tangible and intangible costs and benefits of today's decisions and how they will affect future performance and outcome.
Perhaps the most significant international development influencing the emergence of non financial reporting is the Global Reporting Initiative (GRI) based in the Netherlands, established through the United Nations environment program with the objective of enhancing the quality, rigour and utility of sustainability reporting.
Compliance / carbon reporting
An Australian emissions trading scheme (AETS) is proposed for introduction in 2011. CPA Australia believes that a properly designed emissions trading scheme, that incorporates a well-calibrated cap, will address the market failure by putting a price on the cost of greenhouse gas emissions. Such an approach will only be one part of a comprehensive suite of policies required to effectively reduce emissions.
Assurance
The accuracy and integrity of the ESG information prepared and disclosed by companies impacts on the extent to which users will rely on this information.
The reliability of this information is undoubtedly a critical element to the success of ESG disclosure and take-up in the marketplace. An independent and robust verification of CSR data will help achieve this end. The GRI as the leading framework for the reporting organisational non-financial performance sees independent assurance as absolutely vital to the reliability and integrity of sustainability reporting and disclosure.
The accounting profession has traditionally been looked to as the preferred provider of audit and assurance services for engagements of both financial and non-financial types. The profession has in place a well established assurance framework and standards which are drawn from international sources.
ESG and our organisation
Sustainability reporting
CPA Australia began reporting on sustainability using the GRI in 2008. The reporting will be staged over three years to incorporate full measurement, benchmarking and assurance criteria.
Twenty GRI indicators will be addressed, in addition to descriptive reporting on management strategies. These indicators best represent CPA Australia's business objectives and will provide the basis for meaningful management decisions on social and environmental business activities.
Carbon footprint
An audit conducted by the Carbon Reduction Institute into CPA Australia's global greenhouse gas emissions for 2006 found:
- our footprint is low (just over 18,000 tonnes of CO2 equivalent emissions) and not a major contributor in global terms. By comparison, the average household in Australia produces 14 tonnes CO2 each year
- the largest source of emissions was office expenses (61 per cent), followed by air travel (14 per cent), electricity (11per cent) and assets (10 per cent)
- catering (26 per cent) was the biggest source of greenhouse emissions in the expense category, followed by printing (22 per cent) and office supplies (15 per cent)
We are considering the Carbon Reduction Institute's recommendations to improve our greenhouse gas performance through reducing consumption, increasing efficiencies, and improving staff engagement and education policies. Ongoing assessment of our annual carbon footprint will identify major areas of carbon use, provide a catalyst for strategies to reduce our footprint, and provide an annual figure against which to measure our environmental policy objectives.
Staff volunteering
In partnership with Volunteering Australia CPA Australia offers every employee two volunteering days per year, in addition to normal leave entitlements. The volunteering days can be taken to participate in an approved activity.
Environmental policy
Our approach to management and use of environmental resources will be documented in our environmental policy. The policy provides direction for negotiating, purchasing and choosing suppliers. It also covers behavioural changes essential for managing our environmental impact and ensuring a better use of resources.
Supplier relations policy
Our environmental policy will be considered for all procurement activities. We are also aware of ethical procurement standards with regards to upholding human rights. The principle of assessing whole-of-life value to procurement will be extended to products and services that we directly purchase. This may also apply in cases where we have considerable influence for an indirect purchase.
ESG and the community
CPA Australia educates and engenders a commitment to financial expertise within the profession. Our community program aims to support local communities and engage staff.
National community partner
We are proud to be partnered with Mission Australia for three years, to help extend their youth programs to include financial literacy education for disadvantaged young people throughout regional and rural Australia.
President's charity
The President's charity was launched in 2008. This charity allows each CPA Australia president to personally select a charity or topical cause to support during their term.
CPA Australia president Professor Richard Petty is encouraging his fellow members to support Room to Read, an innovative not-for-profit organisation dedicated to promoting and enabling global education.
Member volunteering
A member survey in May 2007 on volunteering confirmed that accountants are one of the most community-minded professionals in Australia, with almost 80 per cent of members indicating they were currently undertaking pro-bono work.
