The importance of sustainable business performance
Reputation is a key factor for business success today – society is continuously demanding more transparency and accountability. Also, customers are increasingly drawn to retailers and service providers that are committed to ethical practices. These include a dedication to sustainable practice – a way of doing business that does not harm the environment and is socially responsible. In fact, sustainability is fast becoming the lens through which a business is judged by the various stakeholders.
Research by PWC shows that 78% of citizens said they would be more likely to use the goods and services of an organisation that had signed up to the United Nations’ Sustainable Development Goals (SDGs). The 17 SDGs were developed to address global issues including poverty, hunger, health, education, climate change, energy and social justice. Business can help meet these challenges. It can play a fundamental role in creating jobs, helping provide access to healthcare, technological innovation, and encouraging responsible use of natural resources.
How do management accountants add value?
The SDGs are important, but will without doubt provide challenges to businesses, including in the areas of globalisation and digitisation, the impact of policy changes, and meeting investor demand.
This means that the skills of Chartered Global Management Accountants (CGMA®s) in areas such as governance, risk management and control, business analysis, and decision support will become increasingly in demand as the SDGs gain traction.
CGMA®s can contribute to the goals by:
Encouraging businesses to meet SDG requirements through improved innovation capabilities
Emphasising the importance of ethical behaviour throughout the value chain
Focusing more tightly than ever on best practice in governance and stewardship
Driving the formation of strategic partnerships
Helping businesses to base their corporate reports on the six ‘capitals’ of integrated reporting: human, social and relationship, intellectual, natural, manufactured and financial.
In addition, CGMA®s should continue to apply professional tools and techniques in measuring, reporting and analysing data. They can also support governance, identify suppliers with trusted reputations and sustainability credentials that can limit risk, and also apply the CGMA® Global Management Accounting Principles (GMAPs) to ensure business is conducted ethically.
Incorporating the SDGs into your strategy
Rather than attempting to achieve every goal, companies should focus primarily on those SDGs that are most relevant to their industry, sector and business type. In fact, few SMEs can contribute to all 17 goals. Instead, companies should consider their primary activities. The goals should provide a holistic strategy for a business, enabling it to drive opportunity, trust and prosperity, and ultimately to create a sustainable future for all.
The case for sustainability is further outlined in a new CGMA® report, Creating a Sustainable Future.
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