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This article was first published in the January 2018 international edition of Accounting and Business magazine.

The world’s population has never been more prosperous – the number of people living in extreme poverty fell by 1.1 billion between 1990 and 2013, according to the World Bank. Emerging economies are involved in more than half of global trade flows, and incomes have risen dramatically as a result, particularly in China. But the world’s poorest still remain locked out of growth, and incomes for the middle classes in advanced economies have declined steeply.

Megatrends such as changing demographics and urbanisation are fuelling inequality in many countries, and the prospect of climate change threatens consequences on those who can least afford it. The human race certainly has the potential to become even more prosperous – but how can that be achieved in a way that includes everyone, and wreaks no more havoc on the planet?

This is the essence of the United Nations’ ambition to create a framework to build prosperous countries that are not only economically productive but socially inclusive and environmentally conscious. On 15 September 2015, the UN countries agreed a set of 17 Sustainable Development Goals (SDGs), with specific targets set for each to be achieved over the following 15 years, with the intention of ending poverty, protecting the planet and ensuring prosperity for all. The project was born partly of frustration – that despite advances in technology, the building-blocks of prosperity creation in many parts of the world are in a critical state.

The 17 SDGs (see illustration) cover a wide range of interconnected social, economic and environmental issues. Together, they provide a roadmap for governments, business and society to tackle the most urgent challenges, engage with emerging risks and discover new opportunities for creating value. Critically, the SDGs recognise the essential role that business and finance will play in mobilising collective action – it has been estimated that US$2.5 trillion will be needed every year by developing countries alone to meet the goals set out by 2030.


Accountants on the front line

The scale of the challenge the UN has set itself to meet the SDGs by 2030 is immense. The 17 goals encompass 169 targets and 230 indicators – meeting them will take education and action, but also close assessment, monitoring and reporting of the progress of complex, interconnected targets. And this, argues, a new report from ACCA, is why professional accountants can and should be on the frontline.

The comprehensive report, The Sustainable Development Goals: redefining context, risk and opportunity, sets out the challenges that the SDGs are intended to remedy, the ways in which professional accountants can help, the business case for the SDGs, and the role of reporting frameworks in delivering the goals. The report draws from a series of roundtable discussions held with ACCA members and other experts from Vietnam, Pakistan and Singapore.

It sets out clearly why professional accountants are so well-placed to make a significant contribution to the SDGs:

* Future business growth opportunities and new market preferences that are more socially and environmentally aware are strongly aligned to the SDGs, and are more likely to arise in emerging and developing economies. Professional accountants have an understanding of operating in complex markets where sustainable development issues lie at the heart of value creation.

* Environmental and social risks that are linked to many of the SDGs are growing for businesses at an exponential rate. These demand precision when it comes to analysis and reporting, and are rising up the boardroom agenda. Professional accountants are well placed to meet the growing demand for better, more inclusive risk assessment, and for making explicit the connections between social, environmental and financial value creation and destruction (through tools such as the integrated reporting framework).

* The increasing use of digital technology, data analytics and artificial intelligence within the profession will be invaluable for engaging with SDG issues, particularly when combined with the core professional competencies of ethics, judgment, reporting and audit.

* As investor preferences become more aligned to the SDGs, this will create demand for better SDG-related disclosures from companies. Investors and businesses will look to professional accountants for reliable, high-quality information.

* The need for governments to report their progress on the SDGs to the UN will mean a stronger emphasis on data collection and measurement, and on collaboration between the private and public sector. ‘The profession can take a leadership role in connecting the private sector, government and finance with the 2030 agenda,’ says the report.

The report stresses that collaboration will be essential if the SDGs are to be delivered successfully. This means that at a company level, professional accountants must engage their non-financial colleagues.

They must become more involved in wider understanding of the external environment, and they must participate in much broader networks than the purely financial.

Professional accountants also have work to do to help business reappraise the metrics that, until now, have been used to define success. ‘Using financial reporting skills to better understand and communicate on risks that are non-financial will become increasingly important,’ says the report. Better data, too, will be a critical driver of the SDGs, and professional accountants will be its custodians.

As ACCA chief executive Helen Brand says in her introduction to the report, implementing strategies to deliver the SDGs will engage the accountancy profession at many levels: ‘Driving investment to build the physical and institutional infrastructure that will recalibrate business, finance and government activity around the SDGs will require both the robust technical skills and sound ethical judgment that the accountancy profession around the world is well-placed to deliver.’

Liz Fisher, journalist