8 Ways to achieve to achieve a strong relationship between sustainable finance, accounting and your business
1. What is sustainable development? What does sustainable finance & accounting have to do with investment growth?
Sustainable development is a development that meets the needs of the present, without compromising the ability of future generations to meet their own needs. Sustainable finance is considered as investment decisions that take into account the environmental, social and governance factors of an economic activity or investment.
The financial sector has tremendous power in financing and raising awareness of sustainability issues, whether by allowing research and development of alternative energy sources or supporting businesses that follow fair and sustainable business practices.
Environmental considerations may include climate change mitigation and adaptation, as well as the wider environment, for example biodiversity conservation, pollution prevention and circular economy. Social factors include human and animal rights, as well as consumer protection and diverse employment practices. Governance factors refer to management practices, employee relations and compensation for both public and private institutions.
2. Sustainable investment in economic projects with environmental and social practices
Investment in businesses, businesses and projects that seek to achieve development goals and environmental, social and sustainable governance standards is already increasing, with the demand for financial specialists with expertise in this fast-growing specialised field who are able to achieve a sustainable finance relationship and accounting in investments and projects. In addition, Bloomberg Global recently reported on this trend, saying that it is already one of the most sought-after areas in Asia.
A recent report by the United Nations Intergovernmental Panel on Climate Change makes it urgent to integrate environmental, social and institutional governance, among other factors, into investment decisions in order to make a rapid and actionable impact on the environment.
You can view the report here
3. Why is sustainable finance important?
One of the biggest reasons sustainable finance is important is that it forces us to take a generally fresh look at what we do for our world, and how it affects people and meets the needs of economic growth. This is by helping companies increase profitability which achieve a relationship between sustainable finance & accounting by helping them reduce costs for things in the financial system such as day-to-day operations, maintenance, and energy, ultimately saving money. Sustainable finance also builds trust related to customers who want to purchase products or services from companies they believe in.
4. Challenges for achieving sustainable finance & accounting
The main challenge in implementing sustainable finance & accounting standards, is that it can be very complex. A lot of companies try to do this at the superficial level, which ultimately doesn’t lead to change within their organisation. To make a real impact, companies need to consider sustainable finance & accounting in implementation strategies in all aspects of finance management.
5. How appropriate is achieving sustainable finance & accounting for your business?
There are plenty of benefits to implementing sustainable finance & accounting practices within your resources and business cost savings, reducing risk from obligations, and building trust with clients to name a few. Even if you are a small company in a small field or sector of the market, it is possible to start implementing basic sustainable development principles on a small scale and growing sustainable finance & accounting practices over time. If you’re ready to take the next step, here are some things you can do.
Sustainable finance & accounting is the next development for many businesses. As society demands more companies to achieve sustainable economic development goals and know the value of these goals in terms of responsibility, transparency and environmental awareness, it is time to start seriously researching how to integrate natural and basic sustainable practices and ensure sustainability and financial capacity of the company. Today, it is no longer limited to companies with only large investment volumes, small companies have recently also begun to participate in this movement that has prioritised corporate responsibility, transparency and environmental awareness.
Achieving a relationship between sustainable finance & accounting is not only about doing what is best for your company, but also about doing what is best for your community and the planet and not doing any practices that may affect the development of the global ecosystem. And that you should look at all aspects of your business, not just one, to focus on areas where you can implement sustainable finance & accounting practices so that they are part of your day-to-day operations.
There are many benefits associated with development practices and projects used to finance the sustainable development of companies, some of these are common benefits such as:
Employees become happier and more productive when the company they work for makes positive contributions to society in the public perspective.
Environmental impacts can be measured and adjusted as needed, allowing for greater efficiency.
Achieving a sustainable finance and accounting relationship can attract new talent, which can mean easier hiring and increased retention rates.
It’s a great way to express a company’s social and financial responsibility.
6. Sustainable Development Goals or ESG for Trends and Sources in Sustainable Finance & Accounting
Sustainable development is the dominant or directed source of financing, as one CNBC report pointed out that there is no more interactive area than the triple sustainability governance area on Wall Street, as the size of funding funds that aim for sustainability approached nearly $ 2 trillion.
7. Promoting a green recovery to achieve sustainable development
As an example, Egypt’s Vision 2030 is the basic strategy to achieve sustainable development, based on achieving the relationship of sustainable financing and accountability through 3 main dimensions in this sector, namely environmental, social and economic, and determines the course of policies and programs necessary to achieve the desired goals.
Egypt is working to attract environmentally friendly investments such as: manufacturing electric or natural gas-powered cars, solar energy, green hydrogen, seawater desalination, and wind power generation, in a way that helps improve Egypt’s competitiveness in the environmental performance index by increasing the proportion of green public financial investments funded by the government to 50% by 2025. There are other countries that are moving in this same direction.
8. What can accounting firms do in the sustainable finance & accounting sector?
A business doesn’t need to do this alone. Accounting firms can help you establish your company or start your business in accordance with the methodology of sustainable development, environmental, social, and governance standards and in accordance with the objectives of sustainable development on an accounting basis. A firm should strive to achieve a relationship of sustainable finance & accounting in all your business and investments, and care and listen to your vision, challenges and needs in order to provide the right advice. That’s the right partnership to have.