A4S: Making the link between sustainability and accounting

Learn from the experiences recently shared by members of the Canadian Chapter of The Prince of Wales's Accounting for Sustainability (A4S) CFO Leadership Network and the A4S executive chairman in building sustainable finance functions.

Gordon Beal introduces speakers (from left to right) Jessica Fries, Lawrence Davis, and Pamela Steer. Credit: FEI PHOTOS.

In 2004, His Royal Highness established A4S to "ensure that we are not battling to meet 21st century challenges with, at best, 20th century decision-making and reporting systems." CPA Canada partnered with A4S to launch the Canadian Chapter of the A4S CFO Leadership Network in 2017, bringing together leading CFOs from organizations seeking to embed environmental and social issues into strategy and business processes.

Joining Jessica Fries, A4S executive chairman, in a panel presentation on June 14, 2018 at FEI Canada's annual conference, were Canadian Chapter founding members Lawrence Davis, SVP, Finance, at British Columbia Investment Management Corporation (BCI) and Pamela Steer, CFO and head of Finance and Employer Services at Workplace Safety and Insurance Board (WSIB).

Accounting for Sustainability (A4S)

Extreme weather events, water crises, failure of climate change mitigation and adaptation, and cyber-attacks are some global-scale threads organizations need to consider when disclosing risk. But, as Fries shared with FEI Canada conference attendees, where there's risk, there's opportunity.

Fries discussed how sustainability and finance have a symbiotic relationship. "Finance really is the partner of business and has a massive influence on every single part of what that business does and achieves."

Responsible investing and ESG integration

Davis shared his corporation's experience overcoming challenges when integrating sustainability information into finance. "We're investment people, we quantify climate risk, we try to quantify the change, decisions, scenarios, impact analysis...It's hard to quantify because it's something that doesn't intuitively lead to quantification," he said, adding strong analytics are essential to understand various scenarios, such as how a flood will affect future cash flow of a business.

For BCI, the investment team began by identifying how peers approach the issue and who within their corporation could be champions. They also referenced information from organizations such as A4S and CPA Canada.

Mental health and finance

Integrating social and human capital into finance can help decrease a $50 billion annual cost to the Canadian economy. Believing employees are a company's greatest asset, Steer discussed how value on investment (VOI) measures have been key to WSIB's mental health strategy.

"It is my firm conviction that value on investment will ultimately lead to good ROI (return on investment) outcomes," she said. VOI measures for mental health in the workplace include disability benefits, employee engagement, increased productivity and retention rate. At WSIB, creating mental health awareness organization-wide and strong buy-in from senior leadership are the keys to success.

Environmental and social forces of changes

"The future and success of organizations is closely linked to how they respond to the environmental and social forces of change," noted Gordon Beal, vice-president, Research, Guidance and Support, CPA Canada. "As accountants and CFOs, we have a big role to play in making sure environmental and social issues are built into strategy."

View the panel presentation to learn more about how these organizations integrate sustainability into decision making.