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Thinking outside the square: accountants have a role to play in a sustainable future

When it comes to accounting for the carbon tax, accountants need to embrace a transdisciplinary approach. Image from

Can business and accountants guide us on the path to sustainability? Will business and accounting leaders of the future have the necessary skills to solve complex sustainability problems? How can new pathways to the accounting profession support education in accounting for sustainability?

Our research at the the Centre for Accounting, Governance and Sustainability (CAGS) at the University of South Australia suggests that accounting academics and practitioners need to collaborate with other disciplines if skills are to match the demands of clients in relation to sustainability.

It discusses the rapidly changing environment in which accountants work. Legislation, policy and practice are creating new and complex challenges for accountants, requiring a new set of skills.

The example of accounting for carbon

Accounting for carbon and the carbon tax is one example in which accountants need to develop a new approach and a new skill set. It requires thinking beyond discipline boundaries to incorporate elements of engineering, economics, law, and social and natural science; to create a new way of engaging with the broad issues facing business and society.

The carbon tax means that accountants need to understand and engage with physical measures of carbon and carbon equivalent outputs from different processes that affect their clients – inputs to industrial processes such as furnaces, energy sources for driving production and service delivery, product based carbon footprints and carbon released when products reach the end of their lives.

Engineers have considerable expertise in this field, so in developing measures of market activity in carbon trading — market price, quantities of emissions, quality and type of emissions of carbon equivalents such as methane — accountants need to engage with and understand engineering metrics. Similarly, economists have expertise in market pricing and in the provision of prices where markets do not exist. We have coined a phrase for the collaborative approach required – the “transdisciplinary” approach.

Is there demand for “transdisciplinary” accounting?

Is there strong demand for carbon and sustainability expertise? What is the demand for graduates armed with sustainability knowledge and ‘transdisciplinary’ education? To answer these questions, we surveyed 121 professional accounting firm managers in South Australia.

We found that the firm managers perceive sustainability education as important when recruiting graduates for their intake. Further, these managers believe that universities need to increase dramatically their delivery of sustainability education in the future.

What is the role of the professional bodies?

Universities will not be able tackle the sustainability challenges alone. The profession has to acknowledge the need for a wider skill set that incorporates understanding of the metrics of other disciplines. The professional bodies have a significant role to play in the development of alternative pathways into the profession that meet these needs. Collaboration between universities, the professional bodies, and employers is needed to prepare future accountants for a transdisciplinary approach to the profession.

For example, water accounting - which manages both water shortages and pricing - requires engineering, science and other disciplines like meteorology, to develop sustainability measures. Results of our research, presented in the article, suggest that the profession considers it essential that universities continue as the main provider of sustainability accounting education, but also see a role for the professional bodies in the development of staff with knowledge and experience of sustainability issues.

Reality checking through a team-based approach

Including accountants in transdisciplinary teams ensures an accounting perspective is included in sustainability solutions. Recent interviews by the Centre for Accounting, Governance and Sustainability (CAGS) researchers examine how transdisciplinary teams are used by top German companies in managing carbon accounting. Interviews with 40 staff of leading companies showed an integrated approach to solving carbon accounting problems, with involvement from different disciplines and collaboration between researchers, stakeholders and the community across a broad range of disciplines and perspectives to provide a reality check on research processes and outcomes.

The way forward

Our research shows that accounting firm managers perceive growing pressure for sustainability accounting knowledge and services. With accounting firms demanding employees capable of a transdisciplinary approach, education for sustainability accounting needs to be increased at the university level, in collaboration with the professional bodies and employers. Accountants are at the forefront of transdisciplinary approaches to solving corporate sustainability problems; indeed, to meeting the challenges of global sustainability solutions of the future.

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