The finance profession will see new roles created out of sustainability needs, said the Institute of Singapore Chartered Accountants (ISCA) recently.
According to to “Sustainability – Jobs and Skills for the Accountancy Profession”, a joint study by ISCA, EY, Singapore Management University (SMU) and Singapore Accountancy Commission (SAC), the chief finance & sustainability officer (CFSO) is an emerging C-suite position.
The CFSO could be placed above today’s CFO and CSO functions to oversee the integration of finance and sustainability into business strategy, the study report says.
The CFSO will require critical technical skills in sustainability reporting and target setting and integrating sustainability into corporate strategy, ISCA pointed out.
For example, the CFSO may be tasked to translate the ESG impact of business activities, such as carbon emissions and pollution, into financial metrics to guide corporate strategy and meet sustainability targets, the organisation added.
The CFSO will also require business partnership skills, such as stakeholder engagement and transdisciplinary thinking, ISCA said.
The findings show that executives in the accountancy and finance profession play a critical role in integrating sustainability into businesses, said ISCA President Teo Ser Luck.
“They are called to be stewards of corporate sustainability strategies by facilitating the sustainability transition for businesses, he noted. “With their professional knowledge, they are able to take a leading role in helping businesses in the process.”
Three key trends in sustainability
The study found the following three key trends in sustainability that will expand the current job roles and skills required for accountancy and finance professionals, according to ISCA.
- Decarbonisation of the environment
- More companies participating in sustainability reporting
- Expansion of green finance
Study highlights related to decarbonisation
- With decarbonisation becoming a global imperative and a priority for governments, there is increased demand for carbon accounting, markets, and trading.
- International carbon markets are becoming better regulated and stakeholder demands to offset carbon emissions and achieve net zero targets will continue to grow.
- With the increased emphasis on sustainability and climate-related regulatory requirements, more companies are also adopting sustainability reporting.
- This is likely to continue with the establishment of the International Sustainability Standards Board (ISSB), which aims to introduce a global baseline for sustainability reporting.
- Green finance has also seen substantial expansion in green loans, bonds, and investment opportunities.
“Sustainability, as a topic and a trend, covers more than finance. However, the role of sustainability in finance will soon be more than just a task and potentially one that requires focus, attention and perhaps even a separate full-time role to be carved out,” said Samir Bedi, Partner, EY Asean Workforce Advisory Leader and EY Singapore Government & Public Sector Leader.
Additional green skills required of executives in finance profession
Executives in the finance profession will need new skills to meet the demands of these three key trends in sustainability, ISCA observed.
The study identified additional skills required for preparers of financial reporting and assurance service providers.
Examples of preparers of financial reporting include CFOs, finance managers, and internal auditors, ISCA said.
Assurance service providers include audit professionals from accounting firms who help companies identify their reporting parameters, according to the organisation.
For CFOs and finance managers, there will be increasing need for them to manage carbon trading, ISCA noted.
Accountancy and finance professionals need to be knowledgeable in carbon markets, credits, and measurement of emissions, as well as sustainability reporting frameworks, guidelines, and principles, ISCA added.
A global perspective is also needed to navigate different regulations and sustainability frameworks, both regionally and internationally, according to the study.
Accountancy and finance professionals in corporate finance roles also have to acquire skills in green finance and sustainability risk management, ISCA advised.
These skills are key to making the most of the burgeoning opportunities in green finance, while also assessing sustainability risks, the organisation added.
Audit and assurance professionals require upskilling in carbon accounting and assurance to ensure the quality of information to stakeholders, ISCA said.
They will also be called upon to enhance internal processes, the organisation pointed out.
Audit professionals in tax must understand and apply carbon tax regulations and guidelines, to ensure compliance in diverse regulatory environments, both regionally and globally, ISCA added.