Securing a livable future

Ecosystem is a key word to this planet Earth. Had there been no ecosystem in existence our planet would have been like other lifeless planets in the universe. This is the foundation of the biosphere and determines the health of the entire planet. Through ages, we, the human beings, have damaged the supreme balance in this ecosystem through fulfilment of personal as well as collective goals, completely ignoring the damaging consequences of the same on nature and its elements. Hence, our own fulfilments have boomeranged with a costlier and deadlier consequence – End of Everything, sooner or later. Hence, the question of sustainability of the living being is at stake now-a-days. As the ball sets rolling toward more catastrophic consequence, the importance of preserving our nature and its surroundings has become more prominent and purposeful to all of us.

Sustainability: It is an equilibrium among the environment, equity and economy. Sustainable practices encourage ecological, human and economic health as a whole and their vitality. We all know that our resources are all “finite” and should be used conservatively and wisely with a view to long term priorities. Simply, sustainability is all about our future generation, our children and grandchildren and the world that we leave for them.

Like others, corporates also have some paramount responsibilities towards the nature and its resources. How do they leave this beautiful planet for the future generation is a big question in recent times! Gigantic production houses, use of AC machines in all across the offices and factories, wasteful consumption of power and electricity – these are some of the examples among many that a corporate house encounters in the journey of its business operations having the most promising objective “strong bottom-line”.

Role of professionals: The Corporate Sustainability Reporting Directive (CSRD) has been published to adhere to extensive and detailed disclosures about how sustainability issues are affecting a company’s business, as well as the impact of its activities on the society and the environment. Sustainability governance, risks and opportunities with business policies and strategies to manage the impacts on the nature are all tied in a single string to enable us living in a better and greener planet. These parameters and their existence require independent assurance by the professionally competent advisors with limited assurance over first year of reporting and increasing to reasonable assurance thereafter.

Experienced professionals like CAs/CMAs/CS can guide the corporates how to respond and adhere to relevant regulations matching to the industry, demography and laws. Syncing the sustainability values with financial figure, assessing and mitigating risks, steering operational efficacy and finding values for long term growth – these are all the expectations where a CA can play the pivotal role.

The professionals having specialisation on sustainability reporting can play the role to uncover the future opportunities in value maximisation. Their supportive roles can be in the spheres like –

 Compliance process and regulatory obligations.

 Risk assessment

 Aligning the sustainability to the business objectives

 Promoting sustainability into the existing systems, policies and processes of the business.

 Right reporting

Sustainability reporting and the ICAI: In order to meet the demands of corporate accountability for social and environmental impacts, addressing the pressing issues like climate change, gender equality, and environmental degeneration, the ICAI has formed Sustainability Reporting Standards Board (SRSB) to pump up the awareness of ESG (Environment Social & Governance) among the corporate as well as non-corporate business cultures. ICAI is also conducting ESG certificate courses and educating the members and non-members to embrace this new area of professional expertise, grabbing the growing opportunities and thus building a greener nation vis-à-vis planet. Besides, the Board is also organizing various webinars on comprehensive understanding of Business Responsibility and Sustainability Reporting (BRSR). The Board, jointly with SAFA, has very recently organised a webinar on “Equipping Professionals: Building Skills for Sustainability Reporting and Assurance – a Changing Landscape”. The Sustainability Reporting Maturity Model (SRMM) version 2.0 launched by the SRSB of the ICAI offers the possibility for each corporate complying with BRSR to individually assess its position vis-à-vis sustainability reporting maturity levels and achieve its vision of sustainable business.

BRSR & SEBI: The rise of ESG in India has sparked significant transformations in the way businesses are running nowadays. Especially in India, where the impact of ESG is becoming increasingly profound, embracing the reporting standards has become demanding to meet expectations of the stakeholders. In July 2023, SEBI added new ESG matrices for mandatory disclosure under BRSR Code for certain listed companies. SEBI has mandated top 1,000 listed companies (by market cap) to disclose their ESG performance in a quantitative and standardised format from FY 22-23.

The growing demands of stakeholders towards the fulfilment of organisational sustainability and a comprehensive overview of the proper reporting in ESG parameter has brought in a complete change, though slowly and steadily, in the organizational culture. Seventeen Sustainable Development Goals have now become a prime focus to every business culture in order to make the planet greener and better place to live in for the future generation.

Five pillars of SDGs:

 People – end poverty in all forms, ensure dignity & equality

 Planet – protect our natural resources & climate for future generations

 Prosperity – ensure prosperous and fulfilling life in harmony with Nature

 Peace – foster peace and just in society

 Partnership – inculcate global partnership

International Monetary Fund (IMF) is very much committed to all the 17 SDGs and supporting its members in the implementation of the financial stability and sustainably inclusive economic growth. IMF is engaged in aligning all these five pillars with the 17 SDGs for the attainment of a sustainable ecosystem.

Similarly, the professionals in India have to play a very significant role by inculcating a changing mindset among people at large – thus achieving the role of being partner in nation building. CAs being the leading professionals in the field of finance, have to develop best practices to enable accelerating growth in the climatic actions. We have developed a robust training and education system in the field of Chartered Accountancy. Thus, professional skepticism and the ability to take apt decisions collectively have made the professionals like CAs/CMAs/CS visionaries in creating sustainable business models, supporting the people to create a sustainable society. To achieve this noble task, the professional fraternity must concentrate on the following points:

 Engagement with the government and national policymakers

 Effective corporate governance

 Achieving net zero and sustainability ambitions

 Enhancing decision-making process

 Enabling de-carbonisation and achieving sustainability

 Adoption of international best practices in SDGs

 Reporting and mandatory sustainability related disclosure

In the end, it can be concluded that we, the people, can collectively make wonders, and show the entire nation, rather the entire World, that yes, we are the professionals who will leave our footprints for the next generation which will be indelible – with the principle “For Tomorrow, For Good”.

The writer is a fellow member of the Institute of Chartered Accountants of India. Views expressed are personal