Forget meticulously-pressed suits and dusty ledgers. The modern accountant, in the capable hands of Dr Jeremy Osborn, FCMA, CGMA, CPA (Aust.), global head of ESG at AICPA & CIMA, will be more of a sustainability superhero creating value both within and outside their companies, instead of in a back office poring over the 21st century equivalent of thick ledger books.
His mission is to reshape how finance leads the sustainability agenda – and he’s doing it all through the world’s largest professional body for management and public accountants.
“In the early days, sustainability meant worker safety and resource efficiency. Now, it’s a complex tapestry woven with environmental concerns, social equity, and long-term value creation,” he says.
“The financial bottom line is no longer enough,” he adds, “Investors are demanding transparency, consumers are choosing brands with purpose, and regulators are tightening the screws. Companies that don’t consider their environmental and social impact will be left behind in the new economy.”
Only truly reliable information
The key, Jeremy believes, lies in integrating ESG into the very fabric of accounting.
“Accountancy teams already have sight of the one set of complete information in an organisation – the financials. That is the only truly reliable source of information a business has at hand, which is reconciled internally and audited by an external party. I have always felt that there was more that finance and accounting could bring to the table in terms of guiding organisation towards long-term value creation,” he explains.
It was due to his early career experience as a management accountant at Unilever and his engagement with reporting that Jeremy first began to understand how the approach to resource allocation had to change.
“There are six types of capital. For instance, in addition to financial capital, there are manufactured capital, human capital, social and relationship capital, intellectual capital, and natural capital, and that compels inter-planning between them. There seems to be a fixation on financial capital, as if it exists in isolation – it doesn’t,” he says.
“There is no financial capital without natural capital and human capital. Accounting appeared to have forgotten this basic fact towards the end of the 20th century and the financial crash of 2008 was a reminder that financial capital does not work in isolation – and that humans can make a mess of it,” he adds.
Net zero and capital flows
It is this considered thinking that leads Jeremy to believe that the finance and accounting profession is currently in the midst of a significant moment of change, at the nexus of sustainability and business and management accountancy to be specific – and he’s grasping the bull by the horns, so to speak.
“Take professional accreditation, for example. The discipline of management accountancy has always adapted. Brought into being during a time of resource scarcity after WW1, in order to help factories and production be managed as efficiently as possible, the 1919 Institute of Cost and Works Accounts adapted throughout the 20th century, as much of the world moved to a more service-based economy. It became the Institute of Cost and Management Accountants in 1972, with a further name change in 1986 to the Chartered Institute of Management Accountants, as it became clear that not every management accountant works in a factory,” he explains.
To this end, as part of reviewing how to integrate sustainability into the curriculum, Jeremy has been actively creating a number of partnerships to support the AICPA & CIMA membership base.
“We have just launched a sustainability financial strategy course in conjunction with the University of Oxford’s Saïd Business School, to jointly offer a new executive management program in sustainability for accounting and finance professionals. We had amazing feedback from the first cohort in October 2023 and the second cohort will be starting this week,” he says.
“Because of the necessity to transition to net zero business models, sustainability has become central to corporate strategy, and therefore of primary concern to the CFO, CEO, board and chairperson,” he adds.
On the cusp of change
Jeremy also firmly believes that as more economies transition to net zero, policy will start to affect capital flows.
“Once policy is in place, as we see in the UK and Europe, finance and accountancy professionals will be leading the charge on communicating sustainability-related financial information externally, ensuring it is reliable and auditable, and investor behaviour should consequently change – we are on the cusp of that now,” he explains.
“The premise is based on the concept of letting capital do its work in the free market. Capital should flow towards sustainable business models, whilst dinosaur business models will have to adapt, pay more for their cost of capital or risk becoming extinct,” he adds.
As Jeremy, the historian-turned management accountant turned consulting strategist, continues to navigate the evolving landscape of ESG accounting, one thing is certain: the bean counters of the past are undergoing a remarkable transformation – with a keen eye on the green bottom line.
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