10 things we learned from the ICAS Sustainability Summit

By CA magazine

30 May 2024

The Edinburgh event, hosted in association with A4S on 25 April, brought together experts in the field from industry, science, standard setters and more to explore ways to accelerate the changes needed to save our planet. We sift some of the key takeaways.

It is often said that timing is everything. The second ICAS Sustainability Summit coincided with the collapse of the power-sharing agreement between the SNP and the Greens, just a week after the Scottish government scrapped its interim 2030 net-zero target.

It is widely accepted that climate change poses an existential threat to mankind. And yet, noted Dr Marc Lepere, Co-Founder and Chief Science Officer at Omnevue, while roughly half the world’s population is eligible to vote in elections during 2024, climate barely features as an issue in the manifestos of most. Politicians typically focus on addressing immediate concerns in the hunt for votes. So, with government failing to lead the way, can the business community seize the mantle and address what is becoming an increasing planet-vital and business-critical issue?

As host Dr Vanessa Collingridge said in her introduction, the summit brought together a full house of professionals from practice, industry, investment, academia, consulting and beyond. Such occasions are as much about the networking that happens, with people from companies at different stages of their sustainability journey sharing ideas and exchanging details. Crucially, they are not in competition with each other on this issue, a point raised by ICAS President, Alison Cornwell CA. Indeed, if there was an overall message to come from this summit it was that collaboration is key.

The summit also saw outgoing President Clive Bellingham CA launch the ICAS Sustainability Business Network, a forum for sustainability practitioners to benefit from insights and empower collective action. This was followed by two expert panel sessions: the first asked whether we are ready for sustainability reporting, while the second explored the role of business and technology in the climate transition.

Here are 10 things we learned...

1. The gulf between business transformation’s importance and our preparedness

Martina Tessari, Head of Europe and Global Reporting Lead at summit associate Accounting for Sustainability (A4S), spoke about its recent Finance Leaders’ Barometer, which revealed that 88% of CFOs surveyed believe that it is either “essential or very important to transform financial decision making to take account of sustainability-related issues”. Only 9%, however, feel they are fully equipped to make that change.

2. Your competitors are also your allies

Tessari spoke about the responsibility of the accounting profession to work together to act in the public interest – and sustainability challenges certainly fall within that realm. All business sectors will need to collaborate to find solutions and upskill, she said, adding that around 75% of UK investors now “screen their investments based on ESG [environmental, social, governance] aspects”.

Cornwell also picked up on the theme of collaboration, using the example of the UK Cinema Association, where everyone from her employer, Vue International, to single-site owners shares ESG data and works towards a common goal.

3. Produce a sustainability report to communicate with stakeholders, not just to comply

Accountancy Europe’s Deputy CEO, Hilde Blomme, stressed that reporting is just one part of transforming a business model. Any business still in the early stages of that transformation should view their sustainability report as a faithful representation of their progress and plans, not as a tool to make them look good or tick a compliance box. Because, as Blomme pointed out, if the report is rushed out without due diligence it will leave a business vulnerable to accusations of greenwashing. There is, however, still an urgency for businesses to make a start on their reporting journey now and not wait for perfect data.

4. Reporting needs to be mandatory, but also proportionate

As ICAS Director of Sustainability, Fiona Donnelly, argued, while larger companies should lead the way, there’s a danger of overburdening SMEs right now. “The one priority I would suggest for the smaller players is to get on top of your carbon footprint and your carbon accounting because those are the numbers that will be pulled through by the disclosure requirements others are facing,” said Donnelly. For bigger companies with the resources available, ICAS wants to see proportionate but mandatory reporting. This was echoed by panellists who said that voluntary measures don’t have a great track record in delivery.

5. Jurisdictions across the world are operating at different speeds

Getting to grips with the new standards and carrying out materiality assessments is a vast, demanding and complex undertaking, explained Ravi Abeywardana, Director, Strategic Affairs and Capacity Building at the IFRS Foundation. The foundation’s International Sustainability Standards Board has asked regulators to be considerate in how they roll out the reporting standards to ensure they aren’t asking too much from businesses from day one. Brazil, for example, has fully adopted the global standards but is phasing them in slowly, whereas Singapore will introduce mandatory climate reporting from the beginning of 2025.

6. We can learn a lot from Adam Smith

Often described as “the father of modern economics”, Smith was name-checked by Lepere, who said that the Scottish philosopher’s three factors of production were “capital, land and labour” – but over the past century, the accounting system has focused solely on capital. “ESG, at its simplest, is just recognising that there is value in the land being the environment and the biodiversity, and the labour being not just our employees but our customers,” said Lepere. “All we’re really talking about is integrating it all again and recognising that [land and labour] are critical to value creation.”

7. Climate unlocks value creation opportunities

Peter Norton CA, Group Director of Finance at NatWest, said that, as the largest commercial bank in the UK, NatWest has recognised that it has a significant part to play in the climate transition if the UK is to meet its ambitions. But the bank can also look to benefit from this, with climate presenting significant commercial opportunities and becoming increasingly fundamental to every part of the business. Companies will now need to take a long-term view and consider the counterfactual impact of not integrating sustainability into business-as-usual.

8. Consider the “multiplier effect”

Vue International has 70–80 million customers across Europe every year. A company of that size can use its position to educate those customers without patronising them. It may at first seem like a trivial example, but as Cornwell explained, a hand dryer in a restroom blowing cold air uses 95% less energy than one blowing hot air – but that needs to be explained to the customers for them to positively buy into changed behaviours.

The same applies to CAs, many of whom hold senior roles. They can pass on information gleaned from their CPD to influence colleagues and clients in turn.

9. We’re dealing with a “super-wicked problem”

As Lepere explained, a “super-wicked problem” is one that doesn’t have a right answer. It’s continuous, it never ends. And climate falls squarely into this category. But, he added, the onus to solve this problem doesn’t just lie with business: “As consumers, we have to realise we will have to change our economic expectations massively, our expectations of environment, our quality of life.”

Technology is also a key part of the solution. With its help, we’re now moving away from ESG 1.0 (self-assessed, voluntary and cherry-picked data that has led to greenwashing) to ESG 2.0 (regulated, financial-grade and decision-useful data). For example, greenhouse gas emissions data can be very variable, so satellite technology can be used to measure the data more accurately.

10. Accountants have an essential role to play

Donnelly highlighted that although accountants have “great adaptability and skillsets that are very useful in the sustainability realm”, they still need to be equipped with the motivation, mindset and tools to help businesses navigate their transition journeys. Many of the panellists listed the resources they offer or are developing to bridge this gap. At ICAS, for example, we are developing our CPD offering for members. We have also embedded sustainability throughout our new syllabus to ensure the current and future generations of accountants are prepared to be at the heart of driving the crucial changes required to save our planet.