Held To Account
How teaching accounting needs to change to reflect climate change risks.
Jenni Rose, Senior Lecturer in Accounting and Finance, was joined by MBA students Hassan Ahmad, Nkem Igwe and Sian Leake to discuss climate change and how their studies will help inform the decisions they make during their careers.
As she explained: "This is the issue that our students most care about. In fact we have never had an issue that so many of the people we are teaching care about, so it is vital that we capitalise on that. Ultimately I am hoping that the people I am teaching will be rising to the top of their organisations by 2050 when a lot of the promises that corporations are making now will run out. So those that I am teaching will be in a position to make a difference."
She says accounting provides the perfect framework for understanding broader issues around climate change.
"Our students are not just learning about how things happen and what they need to do, but also about the wider picture and how things can be different and better. Ideas such as adding a provision for nature to income statements is a perfect example. Even the nuts and bolts of financial reporting directly relate to net zero accounting and carbon accounting."
Before taking up her studies at AMBS Nkem Igwe was chief accountant at a business in Nigeria. She says she was attracted to studying at AMBS because she had interests in sustainability and wanted to see the world from a different perspective. “The emphasis on original thinking really got my attention and AMBS has a very good reputation with sustainability. What also impressed me about the School was that it wasn’t just saying it, it was doing it.
"Through my studies I now look at sustainability from every angle. Companies are now looking for how well you are investing in sustainability and how much you care about it before you invest. AMBS is consciously bringing sustainability into every aspect of what we do, into every subject.
"In our cohort we have people from about 30 different countries. A lot of people are going to go back to their home country, or other countries, or stay here in the UK. But we are all living with this knowledge now, this is preparing us for the future."
She added that all companies are now held accountable for how they are impacting the environment positively. “There is now a struggle between ‘are we here to make profit’ or ‘are we here to do good’, but a lot of people are leaning towards 'we can make profit and do good at the same time'.
"Accountants have an incredibly important role to play. When you go and look at what people are reporting as their sustainability impacts, you are checking to see that this is true. If this is wrong that has a huge impact on the reputation of that company."
Sustainability has to infiltrate all areas of business. It is not something you can do on the side, it needs to be integral.
Hassan Ahmad’s background is as an accountant in the food manufacturing industry and says since starting his MBA he can see the direct impact that accountants can have on the environment.
“I used to think that I needed to be a biologist or scientist to have an impact. But here at AMBS I am discovering a whole new way of thinking about how companies which take the environment into consideration can create long-term and sustainable profit.
“On the MBA we have modules about leadership, markets and strategy, and accounting and finance, and across all these subjects the consistent theme is sustainability. I totally agree with what others on the course say in terms of this MBA being an excellent way for the global business leaders of tomorrow to fully grasp these subjects and be armed with the knowledge we need.”
He says he already knows that when he applies for his next job he will definitely be taking into consideration the impact of the environment. "If I get two job offers and the first company cares more about the environment than the second then I will accept the former. Or if I have a leadership role in a company and they don’t emphasise sustainability enough then I will be the one imposing measures to take the environment into consideration. It is very important to plant the sustainability seed firmly in the front of people’s minds."
Are you an ambitious professional looking to transform yourself, your career and your life?
MBA student Sian Leake is an environmental scientist and for the past six years has been working in an engineering consultancy.
Most recently she has been working in the field of the water environment with a focus on rivers and how to restore and protect them, and on how to introduce more nature-based solutions to infrastructure development.
As she explains: “I chose to take the MBA because my role is currently quite technical in terms of analysing lab reports and working with different teams within the engineering sector. I believe that environmental and sustainability issues are really important and I need my clients to take them more seriously.
"But if I want them to take them more seriously I’m going to need that business advisory skillset, to show them how this is going to impact finances and how there are reputational issues associated with it too. Undertaking an MBA allows me to have a better influence with clients as I understand the different factors within the strategic decision making process."
She says she chose AMBS because it’s the top-rated MBA school in the UK for corporate social responsibility and sustainability. “I thought that’s perfect. I’m still going to get that business experience but there will still be a focus on CSR and sustainability.”
Sian says she was surprised how CSR and sustainability appeared in all of her modules.
“I definitely wasn’t expecting it in accounting. But this is going to be important for accountants to take seriously, to value nature and have it as something more tangible so that clients can start to take it more seriously.”
“In the environmental sector we have been trying to value nature and the different types of services that it provides. But it is a really difficult thing to measure because people have different methodologies. We need one clear, consistent approach that all companies are using so that it’s comparable and verifiable.
"Accounting is a good way to help us do that because there is the legislative route and there are policies and standards that all companies are bound by. That is something we need for sustainability so that we can show our clients just what they are getting from nature."
She says the MBA has already been really useful in terms of understanding how sustainability fits into so many different elements of business and how it cannot be set aside as a tick boxing exercise. “People now realise that it has to infiltrate all areas of business. It needs to be part of strategy, part of operations. It is not something that you can ‘do on the side’. It needs to be an integral part of the business.
“As MBA students we can now take this learning with us and apply it in the real world. As time goes on we will see a big shift of companies moving towards a more well-rounded, sustainable approach to business.
“But right now we need businesses to take sustainability more seriously and to integrate it into all aspects of their activity to limit the climate impact of their operations. Tackling climate change will be a collective effort.”
"People now realise that sustainability has to infiltrate all areas of business. It needs to be part of strategy, part of operations. It is not something that you can ‘do on the side’. It needs to be an integral part of the business."