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The time to implement responsible finance initiatives is now

By Nick Jackson, FCMA, CGMA, President of the Chartered Institute of Management Accountants (CIMA) and Vice-Chair of the Association of International Certified Professional Accountants.

When we look at retirement investments, we typically think beyond the immediate ups and downs of the stock market. Over time, low-paying stocks can eventually pay big dividends.

In business, however, we have been conditioned to show growth every quarter and significant profitability every year — sometimes at the expense of employees, the environment, and ethics. Often, the quest for short-term profitability hinders long-term growth, resilience, and performance.

Now, more than ever, we need to focus on the organization as a whole and think in terms of years instead of quarters.

Responsible finance is a solution that has been gaining traction in recent years. In its basic sense, responsible finance is the way businesses connect long-term growth and profitability with the greater good. On a deeper level, responsible finance is how an organization integrates all parts of the business to ensure it creates value beyond the products or services it provides.

Responsible finance makes perfect sense for management accountants. Our responsibility goes beyond managing budgets. We need to understand all parts of the business — how the varying parts integrate with one another and the organisation’s objectives, and how they are likely to perform in the coming years.

Key questions we need to ask to understand how our organization integrates all parts of the business to ensure it creates value beyond the products or services it provides:

  1. How does our brand stand up against the competition?
  2. Does our supply chain reflect our values and mission?
  3. How do we treat employees and build culture?
  4. How are we improving processes, so we don’t deplete resources?

I plan to delve more into responsible finance over the next 12 months, as President of the Chartered Institute of Management Accountants (CIMA) and Vice Chair of the Association of International Certified Professional Accountants (Association). My goal is to exchange ideas with our members and educate organisations on how to adopt responsible finance initiatives and work together to reimagine the role of the finance professional.

At CIMA and the Association, we’re already championing responsible finance. We’re committed to responsible business, as demonstrated in our signing the UN Global Compact.

Resources to propel your journey into responsible finance

  • Rethinking the business model offers insights from CEOs — from public and private organisations — as well as practical examples of how to measure value.

  • Creating a sustainable future explains how sustainable development goals (SDGs) are the root of responsible finance and offers steps for creating them. SDGs focus on transparency and consider social, environmental, and developmental implications in business decisions.

  • The Association’s integrated report outlines how the year’s accomplishments bring value to our stakeholders. Integrated reporting looks beyond the numbers and considers the value of the brand, employees, reputation, and other intangibles, revealing the interconnection of different parts of a business.

Across the globe, business leaders are taking a holistic approach to business planning, considering more than balance sheets and annual reports, moving beyond a quarterly figure at the bottom of a column. Instead, they are examining values and behaviours, risks and risk appetite, and value creation for investors and stakeholders.

As finance professionals, we serve as trusted advisers to our organisations and clients. They rely on us not only to interpret data, but also to see the big picture and offer insights about how to marry the two concepts to drive prosperity. Our role in the future depends on our ability to reimagine what we do and how we do it, to go beyond simply being stewards of money, and to see the global impact of our business now and for future generations.

I look forward to hearing your thoughts.