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December 13, 2009

CIMA issues call to action

The Chartered Institute of Management Accountants has published a report evaluating the relationship between the finance function and sustainability agendas within businesses.

Author Sara Shipton said the purpose of the report was twofold.

Firstly, it identified how much of a difference it makes to have strategic intent rather than piecemeal tactic initiatives. Secondly, it intended to prove that accountants can add far more value than they do at present.

“We believe that with the increase in regulation that is coming, there is going to be a lot of running down the corridor very soon to say ‘finance, we have got forms to fill in now, which need numbers on them’,” Shipton said.

“It is a call to action for accountants, saying ‘you can be proactive about this, you have the skills and tools and we don’t believe they need adapting, it just needs a much cleverer application in terms of recognising fully the environmental costs to make sure the tools work as well for climate change projects as for any other capital-hungry project’.”

Shipton said the main driver behind adequate involvement from the finance function was a leadership mandate and a culture for inclusion.

The biggest barrier identified was a lack of time.

“I think that translates to mandate as well because if you have the mandate, you are given the resources and time is found for that involvement,” Shipton said.

The second most cited reason for lack of involvement was that finance did not have the specialist knowledge and skills to support decision-making around climate change.

“[A third] key barrier related to inter-departmental communication where sustainability didn’t believe finance was interested and finance said ‘sustainability people don’t speak to us’,” Shipton said.

“I don’t think that is just related to climate change initiatives, I think that probably in those organisations it is a fundamental engagement issue.”

The report combines verbal insights from interviews with companies and quantitative information from a survey of about 900 finance and sustainability professionals that was held in conjunction with the Prince of Wales Accounting for Sustainability project.

The interviews were from UK-based companies, while the survey was global.

SUSTAINABILITY CIMA Accounting for Climate Change report

• Number of respondents who think finance has a role to play in sustainability within business: 80 percent

• Number of respondents who feel their organisation is committed to mitigating climate change: 56 percent

• Number of respondents who believe climate change is integrated within the overall business strategy of their organisation: one-third

• Number of respondents who agree their organisation can do a lot more to reduce its environmental impact: 63 percent

• Number of respondents who say their business is well positioned to deal with the impacts of climate change: 38 percent

• Number of respondents who say climate change is not on their organisation’s agenda at all: one-fifth

Source: CIMA

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