AICPA/CIMA and Oxford University’s new sustainability programme for accountants among the latest initiatives aiming to plug the ESG skills gap.
Financing a global transition to net zero greenhouse gas (GHG) emissions by 2050 requires professionals across the investment value chain to develop their understanding of financially material ESG and sustainability-related risks and opportunities.
In response, professional bodies and academic institutions are increasingly developing courses and programmes aimed at providing the finance sector with the skills to combine expertise from previously distinct disciplines.
“Traditionally, financial departments and professionals and sustainability departments and professionals have been largely siloed with their own separate languages, and even philosophy and understanding of the main purpose of their organisation,” Amir Amel-Zadeh, Professor of Accounting at Oxford University’s Saïd Business School, told ESG Investor.
“Training [both] financial accountants and investment professionals on sustainability-related issues will help bridge that gap.”
Accountants play a “pivotal” role in an investor’s “information value chain”, according to Jeremy Osborn, Global Head of ESG for the American Institute of CPAs (AICPA) and the Chartered Institute of Management Accountants (CIMA).
“[Accountants] work in-house within businesses to help them understand how financial performance and sustainability performance are connected and which parts are material for investors to understand how the entity is then generating value over the long term,” he said, noting that accountants can help bolster invest confidence in corporate disclosures, which ultimately inform investors’ investment decisions and sustainability-focused disclosures.
To address the sustainability-related skills gap, AICPA/CIMA have partnered with Saïd Business School to develop a new executive management programme, to be launched later this year. Targeted at mid- to senior-level finance professionals, including board members and chief accounting officers, the e-learning programme will run for six weeks four times a year, helping professionals develop their understanding of key sustainability-related financial risks and opportunities impacting companies, and how this should be integrated into their everyday roles.
“Financial managers and accountants need to understand how sustainability affects business, what issues are financially material, but also what impact their organisation has on the environment and society,” said Amel-Zadeh.
“This requires them to be able to identify, measure and report on the sustainability issues relevant to their organisations. Accountants are also expected to understand and respond to the rising regulatory and reporting requirements on ESG, as well as changing shareholder demands.”
Beyond ensuring young finance professionals enter into the workforce with an understanding of ESG and sustainability, programmes such as the one being developed by AICPA/CIMA and Saïd Business School will help those already operating in industry to better “future-proof” their careers and transition to a more sustainable world, added Osborn.
AICPA/CIMA is “actively exploring” the possibility of creating a further programme for professionals sitting at the level below leadership, such as a senior finance manager – “those responsible for the doing”, Osborn revealed.
AICPA/CIMA previously launched the Fundamentals of ESG Certificate in November and offers the Fundamentals of Sustainability Accounting (FSA) Credential.
More than a third of surveyed CFA Institute members said that they expected their roles would be significantly altered over the next five to ten years, due to the increased focus in ESG analysis and use of artificial intelligence, according to a 2022 report. However, fewer than half of survey respondents said that they receive support from their employers to develop the new skills they need.
Library of initiatives
Other initiatives have been launched recently to bolster education and training across ESG-related themes.
The Corporate Governance Institute (CGI) recently partnered with VOCASO, a non-executive director development community, to offer members access to its corporate governance and ESG certification and diploma programmes.
The International Corporate Governance Network is working with the US’ Bryant University to deliver the Governance, Stewardship and Sustainability programme, which has been running online since 2020 and been completed by over 200 investment professionals.
UK law firm Travers Smith has launched an ESG and Sustainable Finance Academy, an internal training programme for its lawyers and business services teams that provides training on ESG and sustainability-related risks and opportunities affecting clients’ businesses.
The Association of Stewardship Professionals (StePs), is in the process of developing the Certified Stewardship Professionals Accreditation Programme (CSP), which aims to provide professionals with the tools they need to improve stewardship quality and outcomes.
These new and developing programmes follow programmes already on offer for investment professionals.
The CFA Institute issues a number of qualifications, including the Certificate in ESG Investing, which covers topics such as engagement and stewardship, ESG analysis, and portfolio analytics.
The UN-convened Principles for Responsible Investment’s (PRI) Academy has courses spanning different levels of expertise, including Understanding Responsible Investment (for those who need a working understanding), Applied Responsible Investment (for those who need to understand the practical application of ESG concepts in investment), an Advanced Responsible Investment Analysis (for portfolio managers and analysts drawing on sustainability data).
“We are really seeing a repositioning of why sustainability matters, moving beyond a risk management perspective to seizing the opportunities that the transition creates,” Osborn said.
“This is why sustainability-focused themes like net zero need to be thought of from a broader international capital markets perspective. [Sustainability] doesn’t just involve accountants and investors, although they remain a very important part of it.”