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Sustainability accounting: Using accounting to better society
When most people think of accountants they think measuring financial impact, but recently their skills are also being applied to sustainability鈥攎easuring environmental impact, social impact, emissions, employee well-being, energy usage and more.
Alex Semancik | November 6, 2024
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When the average person thinks of accounting, they likely think of something monetary and rooted in finance. While it is true many accountants measure financial impact, recently, their skills are also being applied to sustainability鈥攎easuring environmental impact, social impact, emissions, employee well-being, energy usage and more.
Jennifer Stevens, an associate professor in OHIO鈥檚 College of Business, says that her students are different today. More and more students have a desire to use accounting to make an impact and benefit society, and sustainability accounting is a career option for students to do just that.
As more businesses shift their focus to operating sustainably and implementing sustainability initiatives, someone needs to hold them accountable, reliably measure these factors and report them. Stevens believes accountants are the natural choice to take on this role. Accounting professionals have a knack for measuring things, they鈥檙e just applying the skills they already have to a new set of resources and expanding from just measuring financial resources to measuring the impact of a variety of other resources.
鈥淎ccounting is key to the future success of sustainability initiatives because companies need to be accountable, we need to be able to verify what they're saying and we need to hold them accountable for what they're saying and the goals that they're setting,鈥 said Stevens. 鈥淚f investors, if governments, if stakeholders, if the public are going to care about environmental concerns and a business's impact on the environment, companies are going to have to start to measure and report that.鈥
Sustainability accounting, also known as environmental, social and governance (ESG) accounting, is not exclusively about auditing companies and holding them accountable, it鈥檚 also a matter of advising entities on their progress, helping them set goals and working with them to reach those goals. Since it is such a new concept, creating sustainability reports for businesses can be a daunting task, but it is also an important and exciting one according to Stevens.
鈥淭his is an area that is just so new and up and coming. I mean, if you think about measuring dollars鈥攚hich we've done for years鈥攏ow, we're measuring, oh my gosh, all this other stuff鈥攅mployee well-being, how do you measure that consistently, comparably, reliably?鈥 Stevens explained. 鈥淲hat we're doing is applying some traditional accounting measurement concepts to a brand-new area, and it is exciting. But it鈥檚 also challenging because this had never been done before and it's being done right now.鈥
Sustainability accounting is quickly gaining traction and will be an even greater source of accounting jobs in the coming years. OHIO鈥檚 Master of Accountancy and Analytics Program, of which Stevens is the director, is quickly adapting to meet the need. The education students receive immediately goes beyond the textbook as they work with local businesses and incorporate sustainability accounting. Around 40 percent of the program is community service-based experiential learning where a professor guides students through an actual project for an actual business.
鈥淲ith this type of project, students are getting exposure to a real operating environment, real data from a company and they鈥檙e helping that company solve a business problem,鈥 said Stevens. 鈥淎nd so, our students come out of our master's program with a complete leg up on all their peers [from other institutions] because they've actually been involved in real projects.鈥
Whether students are aiming to complete their undergraduate degree or pursue a master鈥檚 degree, the demand for accountants is high. In 2021, PwC鈥攐ne of the largest accounting firms in the U.S.鈥攕aid they were many of whom would fill ESG-related roles.
鈥淭he demand for accountants is so high,鈥 said Stevens. 鈥淓verybody needs accountants, and everybody is going to need sustainability accountants as investors shift their preferences toward not just financial impact, but a broader range of impacts, environmental and social. And it's happening, we see investor preferences changing.鈥