Despite the disruption caused by the Covid-19 pandemic and rising inflation, sustainability is still managing to hold its own on the corporate agenda, writes Zara Duffy, Head of Northern Ireland, Chartered Accountants Ireland.
Northern Ireland might not have embedded commitments to achieve net-zero in law just yet but continued demands from consumers and stakeholders for businesses to do more in this area, means there are not just ethical reasons to make changes, there is a commercial one too.
A global survey conducted by McKinsey reported that nearly a quarter of companies realised value from sustainability in the past five years. Nearly twice that expect their sustainability programs will yield significant value in the next five years.
We know that the business landscape has been transformed by environmental and social concerns and companies that hold themselves accountable to their stakeholders in this area will be more viable in the long-term. However, many companies have a long way to go in preparing for this changing landscape and several are struggling with where to start.
In a recent survey conducted by Chartered Accountants Ireland, only 2% of accountants felt they were fully equipped to understand the challenges ahead posed by sustainability, with 21% admitting they had little idea where to start.
The recognition by businesses of how serious they need to take sustainability can be evidenced by the staggering increase in the number of sustainability jobs and how these roles transcend through all areas of the economy.
The title “sustainability manager” didn’t exist 15 years ago, now a search for the term on LinkedIn returns nearly a thousand positions in Ireland, ranging from graduate roles, all the way up to the C-suite. The employment outlook is bright for professionals in this area, with sustainability becoming an increasingly critical part of business strategy and operations.
Core skills requirements include leadership, strategic thinking, creative problem solving, data analysis, presentation skills and report writing. Many of these overlap with those embodied by qualified Chartered Accountants, meaning even the traditional accountancy role will embrace more focus on sustainability.
In 2020, a survey of chartered accountants showed that only 29% believed they had a great deal of responsibility in relation to sustainability. This has risen to 55% in the most recent survey, indicating the growing level of interest among finance professionals in this area.
Executive level employees might also be inclined to start paying attention, given that a 2021 study of FTSE 100 companies highlighted that almost half of the annual bonus plans awarded to executives at the biggest UK firms now include ESG targets.
With the establishment of the International Sustainability Standards Board (ISSB), sustainability reporting requirements for many more companies are coming down the track for the first time. As responsibility to ensure compliance with financial reporting standards usually falls within the finance department’s remit, there is a high chance any new rules introduced will find their way to the finance department too.
Wherever the more formalised responsibilities to achieve sustainability targets land within organisations, sustainability is everybody’s responsibility. The Intergovernmental Panel on Climate Change (IPCC), a United Nations body, recently warned that we have “a brief and rapidly closing window of opportunity to secure a liveable and sustainable future for all”, reinforcing the point we need to implement change now.
Northern Ireland is extremely vulnerable, particularly in respect of flood risk. Experts believe that rising sea levels could destroy a significant section of Belfast city, including several landmark locations like the Titanic Quarter, St George’s Market and the City Airport, by 2050. We must do all that we can to minimise the risk of such a scenario becoming our reality.