The Malta Institute of Accountants’ Young Members Focus Group tackles regulatory and practical implications of ESG
ESG is not simply a trend which enhances a company’s CSR offering. It is a central element of an organisation’s operations, backed by wider social and consumer awareness and increasing regulatory expectations. ESG is also a means through which entities can give back to the community that sustains their success.
In such a context, accountancy professionals have a strategic role to play in ensuring that organisations are complying with the applicable legal obligations and pushing ESG as a basis for further growth. This key message came across strongly during a Young Members event hosted by the Malta Institute of Accountants which focused on the latest developments concerning ESG.
Addressing the event, MIA President David Delicata remarked that ESG has brought about a culture shock within firms, given the rapid pace of the transformation. “Greenwashing will not cut it. Without proper formal disclosures, there is no accountability”, the President added, highlighting the centrality of the accountancy professional role in this sense. “As accountants we have a big role to play, not only in educating but also in ensuring that our clients and employers are complying with their obligations”. Mr Delicata also focused on the need for upskilling within organisations to be able to respond to these developments, adding that the MIA is contributing to this through a wide programme aimed at educating members and other professionals in the field.
MIA CEO Maria Cauchi Delia referred to the increasing public awareness on the matter, pushing businesses to up their game and change their mindsets. “While environmental, social and governance matters might not be considered as financial elements within an organisation’s activity, they will have a significant impact on its bottom line.” She added that accountants are therefore responsible to ensure that the entities they operate in remain competitive. Through their roles on boards, in management and when acting as advisors, professional accountants need to lead the corporate sustainability agenda.
The event included panel discussions and breakout tables which addressed practical and regulatory elements emanating from upcoming ESG requirements, including new standards developed by the relevant European bodies. The MIA itself has been an important contributor in this sense, providing detailed feedback to the European Financial Reporting Advisory Group on the first draft set of European Sustainability Reporting Standards.
A number of speakers called for a proactive philosophy rather than one of compliance, with regulation and directives being there to support and facilitate the change. Accountants were encouraged to clarify not only the costs associated with ESG implementation but also highlight the benefits, particularly as more investors are revisiting their priorities and favouring companies that truly champion the ESG agenda. ESG also calls for wider collaboration between members of the profession as well as other professionals and experts, given that the variety of the subject matter requires different areas of expertise. Concluding the event, the Chairperson of the Young Members Group Dean Micallef stated that the profession is now dealing with metrics which are more qualitative. He called on participants to convey the key messages resulting from the event to their fellow management team: “ESG is something which society demands from us”.