July 7, 2022

Can ESG Help Balance Business Decisions in a Post-Growth World?

By: Center For Accounting Transformation / podcast

A recent podcast that included two thought leaders attempted to answer a specific question: Can ESG help balance business decisions in a post-growth world?

Hosted by Matthew Heggem, a business strategist and financial coach for professional artists, and Ingrid Edstrom, chief empowerment officer for PriestessOfProfits.com, the AAN podcast, or lyceum, as they called it, included Donny Shimamoto, CPA, CITP, CGMA, the founder and managing director of IntrapriseTechKnowlogies LLC, and Donnie Maclurcan Ph.D., executive director of the Post Growth Institute, a social entrepreneur, organizational consultant, and post-capitalist economist. Each guest answered questions specifically geared toward their respective areas of expertise.

ESG the next evolution of decision-support tools

“ESG is not a completely new thing,” Shimamoto said, emphasizing an earlier response that traced the history of ESG in corporate reporting and corporate social responsibility in the 1990s. “When we look at this balance of decision-making, we can also go back to the 90s with Balanced Scorecard and, more recently, with Conscious Capitalism. So all of these things are trying to balance out the way that decisions are made so that it’s not a profit-only or economic-benefit-only type of decision. That’s where I think a lot of this is coming from. This is just another tool in our belts to ensure that we are taking a look at the broader picture.”

He continued, “There’s a lot of different aspects to look at, but it also, the economic point that we’re at now or that we will be at in the very near future is shifting, and we can’t make decisions the same way that we made them in the past.”

Agreeing, Maclurcan discussed the current economic system that’s based on growth. “It’s not just that that’s fundamentally problematic for national governments, for individuals and their back pockets, it’s that this sits in a context that’s linked to ESG, particularly in the environmental side of this, that we live on a finite planet,” he said. “We have limited resources…We have limited mineral use. We have limited fossil fuels.”

Maclurcan continued, “What happens is, over time, you get the very problems we see in our current system that require ESG, for example. You get economic inequality. You get a breakdown in terms of social cohesion.” He went on to say that a post-growth system asks, “How do we disconnect our economy from economic growth dependency and actually have a system that’s driven by well-being, where money and profit …are actually a vehicle for the greater purpose, which is to flourish within ecological limits?”

ESG is a big opportunity for accountants

Shimamoto added that ESG affects all areas of the accounting profession, from the specific counting, to the application of standards and consistency, to the auditors who determine if the standards have been applied consistently, to the review of internal controls.

Maclurcan agreed, saying, “There’s this beautiful opportunity in the accounting world” to bring together the questions being asked and the broader notion of accounting.

The conversation brought together a set of diverse perspectives on the world’s shifting culture around measuring social impact, the role of finance and accounting in the realm of positive social impact, and other strategies beyond ESG relevant to finance and accounting organizations and their respective clients’ businesses.

Want to learn more about ESG?

Learn more about ESG by attending “How Accountants Create Value via ESG,” featuring Shimamoto; Melisa Galasso, CPA, CPTD, the founder and CEO of Galasso Learning Solutions; and Rani Doyle, executive director of the EY Center for Board Matters.

The Accounting Alchemy Network (AAN) is a group of like-minded accounting professionals who have come together to discuss one core question: What can we do to make the accounting profession into a vehicle for positive change in our world?

View additional courses to help #EnableTransformation.

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