Global survey aims to map sustainability and climate change across accounting and finance education

By Dr Shona Russell, CSEAR Co-director

Do you teach about carbon disclosures, or ESG? Does sustainability feature in your teaching? What have you experienced when teaching these topics? What insight and support could you offer to those wishing to teach these subjects? 

 

Shona Russell, John Ferguson and Ian Thomson have launched an online survey aims understand academics’ experiences of teaching sustainability and climate change in accounting and finance degree programmes around the world. If you have experience of teaching these topics or would like to teach these topics, you can complete this 15-20 minute survey:

English version: 

https://standrews.eu.qualtrics.com/jfe/form/SV_5AXjhioKLf1A6hg

Version in either French, Spanish, Italian, Portuguese, Simple or Traditional Chinese: 

https://standrews.eu.qualtrics.com/jfe/form/SV_0jn2aeb2UWkqR8y

Complete the survey before 16^th September to win one of five copies of Sustainability Accountability and Accounting by Matias Laine, Helen Tregidga and Jeffrey Unerman.
 
The survey is part of the Building Carbon Literacy project involving colleagues from the Centre for Social and Environmental Accounting Research is funded by the Royal Society of Edinburgh’s COP 26 International Climate Network Grant.
 
Motivated by a concern that public and private accounting and finance have been identified as central to achieving net-zero carbon ambitions, the project aims to understand the education, knowledge, skills and capabilities of professionals tasked with understanding, evaluating and investing in climate solutions. 

Findings will be publicised in October 2021 before the Conference of the Parties 26 in order to:

• Enhance understanding of climate change and/or sustainability in accounting and finance education and academics’ experiences of teaching these topics

• Work with stakeholders to develop transformative curricula to ensure that current and future professionals are equipped to achieve net-zero ambitions. 

 
Please contact Shona Russell (sr65@st-andrews.ac.uk) to learn more about this project. 

Climate Emergency, Climate Action and Accounting Education?

By Ian Thomson, University of Birmingham Business School and CSEAR Executive Council Convenor

Today, the 20th September 2019, children in the UK and around the world are participating in mass demonstrations stressing the need for global action on climate change. Climate scientists warnings are more urgent,  nations are waking up to this climate emergency, some financial institutions are divesting of fossil fuel investments levels, some businesses are reducing their carbon footprint and a growing number of committed individuals are struggling to live low carbon lives. Despite an awareness of how to resolve this, where change is happening it appears too slow to make a difference.

Despite this crisis, many universities and business schools continue to teach accounting and finance, with its hidden carbon curriculum, as if they were climate change deniers. The need for carbon literate graduates has never been greater, yet with a few notable exceptions accounting and finance programmes across the world are largely ignoring this global challenge. Carbon accounting and finance needs to become the new normal for our students.

Of all the social and environment accounting topics this is perhaps the easiest to assimilate into professional practice and is broadly supported by professional accountancy bodies. Carbon intensity disclosures are part of UK corporate reporting and in many other countries. There are standards, protocols, taxes, techniques to measure carbon in ways that can be appropriated into organisational decision processes and reporting.

However, we must ask ourselves how competent are graduates from your programme in understanding drivers of climate change, deciding which carbon accounting method to use,  applying carbon accounting methods and making meaningful and impactful recommendations as to the lowest carbon course of action. Even though I have been teaching this topic for over 25 years I only reach a percentage of our students. These students are aware of the topic, but far from competent in doing carbon accounting.

So why it is it that in 2019, climate literacy and carbon accounting are not core parts of our degrees?

• Why do we not teach our students to become carbon literate and provide them with the accounting skills to contribute to the meaningful application of carbon accounting to real world problems?

• Why do we teaching management accounting students to resolve problems with labour or machine capacity constraints, but not with carbon constraints?

• Why to do teach students about asset impairment standards, but not taking into account unburnable fossil fuels or stranded assets? 

• Why do we not teach students to take into account carbon emissions as a material risk in audits? 

• Why is possible exposure to future regulations on carbon, not a factor in corporate valuations or setting cost of capital? 

The list of whys could go on and on. Before you get too annoyed with me – I know many of you are doing wonderful things in this space, and members of the CSEAR community are at the frontiers of practices. But we need every graduate in every institution to have some level of capacity in climate literacy and effective carbon accounting.

This is a challenge CSEAR should take the lead on. I would like us to share our best practice, create learning resources that are translated into different languages. We also need greater accountability and transparency on how climate change is integrated into global accountancy education programmes.

This will not solve climate change on its own, but is a necessary first step, and at least may mitigate the worst consequences of the production of carbon illiterate accounting and finance graduates. This is not a trivial task, but we have the expertise, knowledge, ability and motivation to change what we teach in our programmes. Let us not be bystanders as the world burns.

Can Accountants Save the World? Incorporating Sustainability in Accounting Courses and Curricula

By Charles Cho and Hannele Mäkelä

The new academic year is about to start, turning our minds back into teaching. How tempting it would be to take the slides from the prior year(s) and do what we know best. However, recent changes in global governance and accounting standard setters’ agenda encourage (force?) us to step outside our comfort zone and think: “how can we incorporate sustainability into accounting courses and curricula?”

While many of us have successfully been doing this for years, and even more of us regularly experiment with novel ideas in their teaching, it is time that we, as a community, start carrying responsibility and take action towards a better – and more formal – alignment between accounting and sustainability. Pursuing sustainable development and mitigation of climate change require new understandings of corporate accountability and measuring corporate performance. How companies manage sustainability is crucial for their long-term success. It is no longer enough to measure organisational success by financial measures only. The role of accounting is acknowledged central in achieving sustainability, as strongly emphasized by high-profile speakers at the recent World Congress of Accountants – including former UN Secretary-General Ban Ki-Moon, His Royal Highness, the Prince of Wales and Mark Carney, Governor of the Bank of England.

For instance, recent developments for non-financial reporting require new understandings of social and environmental value, and how to account and measure for such value. Carbon accounting and disclosure, water accounting, and human capital accounting are just a few examples of the types of non-financial information that companies are now required to disclose. Consequently, and in parallel, business schools are globally and increasingly expected to commit to sustainability education. How can we as academics, researchers and teachers, equip future accounting professionals to better deal with the challenges (and possibilities?) associated with sustainability issues?

Both of us have recently attended workshops, panel discussions and other related events with valuable opportunities to learn and share thoughts around accounting and sustainability with experts from different backgrounds. One of us is part of a group of eight Canadian academics who (still) call for an “integration of sustainability into the CPA Canada curriculum” as follows:

It is our responsibility – as accounting educators and researchers – to contribute to the sustainable development of the profession. This academic commitment to accounting is also an engagement that will ensure the prosperity of future generations. We live in turbulent times where the natural resources of the planet are compromising economic growth, where fiduciary duty requires the inclusion of environmental, social and governance issues and where the ethics of economic actors has become essential to the conduct of business. The integration of sustainability into the CPA Canada curriculum is crucial to the building of a successful, inclusive and leading accounting profession that could pursue an ideal of good business.

We firmly believe that besides the new tools and accounting-related ideas and theories we teach at our business schools – and perhaps as a driver for change –  the accounting profession, via its professional orders, associations and/or societies (e.g., ACCA, AICPA, CA ANZ, CPA Canada, ICAEW), must lead and take action to make concrete changes by including sustainability as a core competency in their examinations and certification/licensing requirements. Unfortunately, we have only seen much discourse without much action so far—a ‘déjà vu’ (?).

Moving forward and “on the ground”, we need new methodologies and new ways of approaching accounting education. Many of the key ideas and concepts in accounting need to be thoroughly and fundamentally re-considered when applied to the sustainability arena. In this process, multidisciplinary thinking is the key. We need to build and educate students with strong core competencies in accounting, but it is equally important to critically analyse the role of accounting-related ideas, tools, and information in the bigger picture of the ecosystem we live in and its sustainable development. What are the critical accounting concepts, theories and tools that we need to master? What is the sustainability-related information that we need, how and from where do we get it? How and what do we conceive of value? What is the time-span to be considered? And so on.

In addition to a critical analysis of these pressing questions, we also need the ability to collaborate in multidisciplinary settings and with different actors in society. This should be reflected in how we teach at business schools. Businesses, governments, NGOs and all other societal actors could (should) be involved, and we could experiment with? new kinds of participatory methods. Then again, sustainability could be easily included even in introductory courses through case studies, for instance. As often mentioned, the question is not only about what you teach but how you teach; that is, teaching methods that foster critical analysis, collaborative skills and problem-solving should be in use throughout curriculum.

This blog aims to stimulate debate around how we should teach accounting to advance and improve sustainability. It constitutes a call for action from us – the community of accounting educators – to change our accounting courses and curricula to integrate sustainability issues, a response for the challenge posed for accountants to save the world.

Editor's note: this blog article was originally published on the EAA-ARC blog on 8 August 2019, and is republished here with permission.

New issue of the Social and Environmental Accountability Journal published

SEAJ 34(1) Special issue on Carbon Accounting

The first issue in 2014 of the CSEAR journal is a special issue on “Carbon Accounting: The Contribution of Social and Environmental Accounting to the Debate”, guest edited by myself, featuring three main contributions by Francisco Ascui (University of Edinburgh), Martin Freedman and Jin Dong Park (Towson University) and Begoña Giner (Univesity of Valencia).

Ascui’s paper is a review of carbon accounting literature that provides insight into the directions in which SEA research should move to make a more ambitious contribution in the area. He contends that the focus of carbon accounting research is relatively confined to content analyses of corporate disclosures, opening the opportunity to conduct research in other areas, such as the interplay between carbon markets and financial accounting.

Freedman and Park examine the compliance of certain public US firms with mandatory disclosures on climate change, concluding that the regulation produced an increase in disclosure, but also a diversity of disclosure practices among companies.

Begoña Giner, member of the Advisory Council of the International Accounting Standards Board (IASB) and former member of the European Financial Reporting Advisory Group (EFRAG), examines the evolution of carbon financial accounting regulation and uses a suggestive currency metaphor to suggest an alternative carbon financial accounting approach based on considering emission allowances as payment instruments.

As usual, this issue also contains a series of articles reviews and book reviews that researchers interested in social and environmental accountability might find a useful introduction to relevant recent literature.