Will Global Accounting Regulations Lead the Way to Stronger Sustainability Practices?

Will Global Accounting Regulations Lead the Way to Stronger Sustainability Practices?

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Could accounting hold the key to successfully implementing climate change initiatives, achieving equality and diversity in the workplace, and contributing towards a more sustainable future? Current research shows that accounting and global regulatory accounting practices are essential for organizations to reach sustainability goals that have a more measurable impact. An accounting perspective can also shift how organizations approach sustainability toward a holistic standpoint instead of piecemeal solutions or departmental silos.

On this episode of the Delve podcast, Professor Brian Wenzel from the Desautels Faculty of Management follows up on another Delve podcast episode about the current and future role of accounting in sustainability initiatives. Delve’s first conversation with Professor Wenzel focused on how accounting and accounting standards are essential for organizations in reaching their sustainability goals. This episode further examines the future of accounting in sustainability initiatives, covering the topics, insights, and outcomes of the McGill Accounting Research Conference, co-sponsored by the McGill Sustainable Growth Initiative (SGI) at McGill on June 7 and 8, 2023.

The conference promoted discussion among accounting scholars and practitioners, creating a synergetic space where participants shared their insights on sustainability in the fields of accounting and capital markets. Setting the tone for the conference was Jeffrey Hales, a board member of the International Sustainability Standards Board (ISSB) within the International Financial Reporting Standards (IFRS). He outlined how burgeoning, collaborative regulatory bodies like the ISSB have a vital role to play in how organizations set and reach sustainability goals in a global context.

The ISSB presentation by Jeffrey Hales, I think was very informative
For researchers, this regulatory perspective and collaborative platform sheds light on their own work and its possible scope and impact. “The ISSB presentation by Jeffrey Hales, I think was very informative,” says Wenzel. “We had some discussion with him that he could take back to the board, and he relayed what the board will be doing and what’s going to be happening. As new standards are created, that’s going to create opportunities for new research going forward. Is the standard meaningful, does it work, does it not work, is it useful, can we make it better? Thinking about how we operate as humans individually: can I do things in a more sustainable way?”

In the context of the conference and where academic research meets global regulations, Wenzel defines sustainability according to the UN’s Brundtland Report: “Sustainable development is about meeting our current needs without sacrificing the needs of the future generations”. He further explains, “It’s short-termism versus long-termism and balancing between different stakeholders. Since accounting isn’t just tracking numbers, it is communicating information, we have a central role to play in anything sustainability related because we can track the data if the data exists and then connect the key stakeholders through communicating from one party to another.”

Along with Hales’ keynote talk, the conference highlighted new accounting research that addresses an environment, social, and governance (ESG) approach to sustainability in various fields, from climate change to the impact of the #MeToo Movement on board diversity. Listen to the Delve podcast for details on this research and its potential impact.

This episode of the podcast is a collaboration between Delve, the McGill Sustainable Growth Initiative and its Director and Desautels Professor Javad Nasiry. The Sustainable Growth Initiative also co-sponsored the conference. Now let’s hear more from Brian Wenzel.