ESG Reporting Will Boost the Accounting Profession

Experiencing difficulty hiring accountants of late?

If so, you’re not alone: 300,000 accountants and auditors left their jobs over the past two years, according to The Wall Street Journal. Making matters worse, fewer people are entering the profession.

What if one solution to this looming crisis was something that companies already need to solve — ESG accounting?

The SEC has placed environmental, social and governance - ESG - reporting standards on the horizon for public companies. Many are already voluntarily disclosing ESG information.

Businesses are struggling to gather and share reliable ESG data. They are leaning on their already overworked accounting teams because ESG reporting is similar to financial reporting.

Should we task accounting teams with an evolving ESG reporting puzzle? Even while many are struggling to maintain the staff required to meet existing expectations? Yes! That’s where these two issues become an opportunity.

How accountants can help solve the ESG challenge

ESG reporting requires the same analytical and critical thinking skills needed for accounting. Business practices necessitate collection of high quality, auditable ESG metrics with proper controls in place for accuracy and completeness.

They must then consolidate that data into central repositories in an organized format that enables reporting. This is an exercise that accounting teams have successfully managed many times before. One recent example is ensuring compliance in lease accounting.

Accountants collected and arranged lease data and financial information. They reported operating lease assets and liabilities on the balance sheet for the first time. They ensured accuracy and completeness by implementing proper controls and organized the data into central repositories for reporting. Analysts and other stakeholders have applauded the lease accounting changes for improving transparency and comparability.

ESG reporting initiatives will also result in improved transparency and comparability. Accountants are well suited to address the need for ESG performance disclosures with innovative and precise solutions. Rising to meet the ESG challenge is just what the profession needs to retain talent and attract new recruits.

People perceive accounting as a stuffy profession that focuses on numbers from the past. But ESG reporting is fresh and exciting, focused on environmental impact and social responsibility. ESG reporting will benefit from the public trust that accompanies accountant prepared and audited reports. The accounting profession will benefit from a long overdue image reset.