Prince Charles' Accounting for Sustainability Project and its Chief Financial Officer Leadership Network has published four guides to help the finance and accounting community address the issues of integrating sustainability into their business processes and decisions.
The guides have been developed by the CFO Leadership Network and their teams, including senior finance, risk, internal audit, investor relations and sustainability professionals, along with the Accounting for Sustainability Project, also known as A4S, and other specialists.
Each guide is supported by case studies from network members demonstrating practical applications of the approaches and techniques set out in the guides.
The four guides are:
The guide outlines how businesses can adapt their existing capital investment appraisal processes in a pragmatic and systematic manner to integrate social and environmental issues. It describes how traditional financial return-based investment decisions can be broadened, to make sustainability issues more explicit and transparent. Examples are also provided of how this can lead to more cost-effective and resilient investment decisions.
This guide assists investor relations teams as they seek to engage investors on the link between sustainable business models and the creation of shareholder value. The guide provides overarching principles on communicating with investors and offers insights into network members’ experiences of the successes and pitfalls. It covers ideas such as incorporating sustainability information into investor presentations, and moving away from quarterly reporting of financial results.
The guide introduces finance and risk professionals to the potential business impacts from macro sustainability trends, such as climate change, water scarcity, increasing population and severe weather events. It explains why it is important to adapt traditional risks management process to respond to these trends, and provides examples of how to overcome some of the uncertainty associated with their impact, so they can be better integrated into business decisions.
This guide helps finance teams increase their understanding of the growing movement around natural and social capital accounting. It explains the key terms finance teams should know, how broadening accounting frameworks can benefit business, and the central role of the finance team on collecting, analysing and reporting this new type of information. The guide suggests a set of overriding principles based on financial accounting principles to assist the decision making process. It explores the benefits and challenges of converting natural and social capital impacts and dependencies into financial figures, to gain the attention of decision makers.
"As CFOs we have a crucial role to play in helping our businesses to understand the value of values and sustainability in particular,” said Sainsbury’s CFO John Rogers, who chairs the A4S CFO Leadership Network. “It can be a challenge knowing where to start, so these guides are designed to give CFOs practical advice using real case studies of how others have tackled the issues.”
CFO Leadership Network members plan to continue to implement the approaches outlined in the guides and publish further case studies later this year. This year, the network is also undertaking new projects to develop additional guidance, including integrated management reporting and embedding sustainability into budgeting and forecasting.
“CFOs and finance teams have a crucial role to play in embedding sustainability within organisations’ decision making processes,” said A4S director Sarah Nolleth in a statement. “These practical guides, written by practitioners in the field who have experienced and tackled some of the issues first hand, will help the finance and accounting community to build more resilient businesses, ultimately leading to better commercial outcomes. The guides have been developed with a finance audience in mind but will also be of interest to sustainability professionals and other types of decision maker."
The guides can be
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