ACCA warns on greenwashing in sustainability reporting

In its latest report titled ‘Ethical dilemmas in an era of sustainability reporting’, ACCA identified the potential ethical risk factors and why independence is important for sustainability reporting. 

As the leading global body for professional accountants, ACCA’s report offers real-world scenarios and examples to illustrate the growing regulatory requirements around sustainability reporting. 

The industry body is also keen to demonstrate the value financial teams can add with this kind of non-financial reporting that is ever-growing. 

Written in partnership with expert academics from Warwick Business School, the report is both for accountants and non-accountants and aims to equip them to manage dilemmas such as risks of greenwashing, weak processes, lack of technical knowledge and compromises in objectivity and independence.

The guide aims to help users avoid consequences such as poor-quality reporting, a loss of trust and faulty decision-making. 

Report co-author Sharon Machado, head of sustainable business at ACCA, said: “We have a collective obligation to future generations to operate in a sustainable manner, both individually and as organisations, and it’s great to see more and more businesses embracing sustainability reporting. But we need to be alert to the risks and ensure quality and consistency.

“For professional accountants, this is an opportunity to provide strong leadership and insight, in turn helping to drive ethical and sustainability-focused decision making. This guide will help accountants and other professionals to create balanced reports that are a fair reflection of organisations’ performance and impacts.” 

Co-authors Professor Lisa Weaver and associate professor Darren Sparkes said: “The scenarios contained in this report provide opportunities for individuals and teams to explore some of the ethical tensions that can arise in the complex arena of sustainability reporting. 

“As professionals, we have a moral duty to uphold the ethical code and to champion good practice, within our profession and with professionals from diverse backgrounds, working together to enhance credibility in sustainability reporting.”