The role of Maltese accountants in the rise of environmental reporting

Abstract

PURPOSE: This study sets out (i) to determine the potential and present extent of the accountants’ involvement in the ER process of LMEs and (ii) to assess the main accountant-led and organisational factors affecting the accountants’ involvement in dealing with the ER process of such entities. DESIGN: A mixed but predominantly qualitative methodology was implemented. Semi-structured interviews were carried out with 29 research participants. These consisted of 16 LMEreps, involving nine CFOs and one CFOrep, three CSOs and two CSOreps, one company secretary, and 13 SRSPs, the latter consisting of 11 ESG advisory team members, and two ESG assurance team members. Fifteen of the 29 research participants were qualified accountants, with the remaining fourteen being non-accountants. FINDINGS: The findings indicate that accountant potential involvement leans more towards that of being supporters to the ER process, rather than that of contributing directly to such process. The aspects affecting accountant involvement most agreed to related to the accountants’ trustworthy reputation, organisational demand for environmental information, and human resource capacity. CONCLUSIONS: The study concludes that accountants have a role to play in ER. However, the study clarifies that the accountancy profession should not aim to tackle ER, nor other aspects of ESG reporting, on their own. Accountants must incorporate SR as part of their skillset, or else the profession risks losing its relevancy as ‘custodians of truth’. IMPLICATIONS: This study hopes to help clarify the accountants’ role in SR, particularly in the aspect of ER, together with the factors affecting their involvement in such reporting. The proposed recommendations may aid both the Maltese accountancy profession and LMEs to deal with the rising ESG reporting demands, while also aiding the MIA to set realistic expectations when calling to accountants for SR.