Don’t forget about sustainability in accounting education

Ignoring it will significantly impact the organisation’s bottom line and brand name 

by DR SIEW EU-GENE / Pic by BLOOMBERG

LANGUAGES influence and limit our perceptions and thinking. Similarly, how businesses convey their financial statements and performance plays a vital role in focusing and directing the perceptions of their various stakeholders. 

The accounting profession plays a central role in this regard. Traditionally, accounting focuses on financial information while ignoring environmental, social and governance (ESG) reporting. The risks (or even opportunities) from this non-financial information are not highlighted or, worse, made known to the organisation’s stakeholders. 

Ignoring sustainability will cost society and communities as well as carry risks that significantly impact the organisation’s bottom line and 

brand name. For example, there was recent news of Malaysian companies embroiled in environmental and social issues and, as a result, being trade sanctioned by the US and European Union. There was also news regarding Malaysian companies’ governance issues and, as a result, suspension from Bursa Malaysia. 

Moving Towards a BroaderBased Accounting Education

There is a need for the accounting profession to move away from financial focus to a more broadbased measurement and reporting methods. Thus, the current growth and popularity of sustainability reporting in financial reports. 

In sustainability reporting, the accountants will measure, quantify and gather qualitative data regarding the organisation’s impact on the environment and society. 

Traditionally, accounting focuses on financial information, which is mainly of interest to investors. The shift to sustainability reporting has allowed non-financial information that is more relevant and useful to other stakeholders, such as governments, employees, local communities and customers. 

Role of Sustainability Accounting in Education

To meet the needs for this shift, universities worldwide are increasingly teaching sustainability in their courses. Universities play a vital role in promoting and imparting sustainable viewpoints and perspectives to students who are future leaders. 

Monash University Malaysia (a branch campus of the top universities in Australia) has incorporated sustainability education into its accounting course. The School of Business at Monash Malaysia has taken sustainability actively. It is a Signatory of the Principles for Responsible Management Education (PRME). PRME is a United Nations programme whose goal is to revolutionise education to fulfil the “Sustainable Development Goals”. 

To establish quality for the accounting course, the School of Business of Monash Malaysia has been accredited by accounting professional bodies, such as CPA Australia, MICPA-CAANZ and ACCA, and the Association to Advance Collegiate Schools of Business (AACSB). The AACSB accreditation means that Monash Malaysia has been audited for top quality teaching, curriculum and research. 

Sustainability is taught as part of the accounting capstone specialist unit at Monash Malaysia. A capstone unit is a third-year level unit in which the students must demonstrate the skills they have acquired throughout their first and second years. A specialist unit that focuses on sustainability allows students to have a more in-depth exploration and understanding of ESG issues. 

This will allow critical thinking skills in the assessments. Critical thinking skills are essential skills that allow students to go beyond the simple “what” or “why” to more application of knowledge to problems. 

It Is Time for Sustainability 

Sustainability reporting provides critical information on the organisation’s ESG activities. The positive impact of ESG can build a positive brand name and goodwill, and help in the long-run performance, while a negative ESG or controversies will severely harm the organisation. 

The rush to sustainability has created many employment opportunities for students. Students can set themselves apart from their peers if they have a sustainability reporting background. 

Sustainability is about doing the right thing for society and the environment, which is also the right thing to do in the long run for their investors and businesses. 

  • Dr Siew Eu-Gene is the senior lecturer at Monash Malaysia’s School of Business Accounting Department. 

The views expressed are of the writer and do not necessarily reflect the stand of the newspaper’s owners and editorial board.