Beyond profit maximisation, cost accountants’ role in corporates is towards sustaining ecology says ICMAI. The summit talks about the contribution of data science, ML and AI to accomplish ESG strategies. Cost accountants provide the statistics and data to the management team. The management team takes input from the cost accountants before decision-making. The global summit highlights the theme of unlocking sustainability. The G20 presidency initiates the way for an ESG-driven green world. The ICMAI wants to implement ESG strategies with a vision of one earth, one future and one family. In short, the theme revolves around the concept of “Vasudhaiva Kutumbakam”. The blog highlights the comments of different authorities who participated in the global summit of ICMAI and the international changes in schemes related to ESG goals.
President of ICMAI:
CMA vijender Sharma is the president of ICMAI. The presidency theme of G20 is “Vasudhaiva Kutumbakam”. ICMAI’s president underscored the necessity of ESG practices. The professionals working in top management are responsible for the healthy environment, governance and society. The private, and public sectors, regulatory bodies and government are discussing ESG trends to implement ESG in compliance. He shared his responsibility to ensure profit and sustainability. He mentioned that we as responsible citizens have inherited the resources from our ancestors. It is the prime responsibility of the finance professionals to pass the natural resources to our future generations. The role of working professionals is similar to custodians. It is crucial to manage the natural resources. Sharma further said that ICMAI had introduced a new course for farmers. The farming techniques are changing, and it takes time for farmers to adapt to the new techniques of farming. The ICMAI course also opens door to the retired army officers. The retired army officers are interested in doing farming as a sign of patriotism. The farmland of retired army officers helps to promote agriculture. The introduction of the course to village people reduces the migration of rural people to urban areas. The practical education offers employment opportunities to the village residents.
The view of the president explains the value of the ICMAI schemes. The government should create low-profile jobs to help the people below the poverty line. Generation and distribution of income promote economic development.
Union minister of state for Education:
The union minister of Education, Dr. Subhas Sarkar attended the summit virtually. He insisted on valid points regarding ESG and sustainable future. He said that the ESG principles reach the mind of the professionals through education, governance, social responsibility and ethical standards.
Indian Army:
The director general of financial planning in the Indian Army is Lieutenant General Samir Gupta. He insisted on the importance of ESG for financial growth. The ICMAI course to soldiers offers employment opportunities to army officers after retirement. The Agniveer scheme of ICMAI supports army employees.
SCOPE:
The director general of the standing conference flattered the working of PSUs in India. The PSUs operating in India are contributing to GDP growth. He furnished interesting data that the PSUs operating in India are more profitable than PSUs operating in America. Around 76 per cent of PSU in India are profitable. PSUs of 50 per cent operating in America are declared as profitable. He says that one of the primary goals of G20 is creating awareness about ESG. The Indian president highlights six goals of the G20 conference. The six goals are inclusive growth, green development, and technological transformation, progress on SDGs of the UN, women empowerment and 2nd century multilateral institutions. India is a top-performing country in the G20 countries. India wants to make the corporate world and MSME industry equipped with long-term objectives related to the G20 summit.
GS2023:
The chairman of GS2023 is CMA H Padmanabhan. He was in the position of vice president of ICMAI. He also attended the summit along with distinguished guests.
Cost accountants and ESG strategies:
ESG goals should balance the supply-chain resilience and costs. Cost accountants and top management professionals feel that it is difficult to sync the cost strategies, supply chain resilience and ESG goals. The ESG goals impact the revenue and costs. There is a direct relationship between ESG goals and cost strategies. The following points elucidate the relationship between ESG and pricing strategies.
- The International Energy Agency released the electricity market report of 2023. The report says that the global power generation mix is supposed to rise by 35 per cent from 29 per cent from 2022 to 2025.
- The US Inflation Reduction Act offers a tax credit of 70 per cent to the projects that support green energy.
- The projects that support renewable energy are virtual power purchase agreements and renewable energy credits. These projects demand less capital and more human brains. The procurement team should possess the energy reporting tools to calculate the cost savings and consumption.
- Investors are checking the ESG policies to make investment decisions. According to a report from Gartner, in 2020, around 85 per cent of investors valued ESG as their goal for investments.
- ESG intersect with supply chain resilience. The compliances related to ESG make the organisations track and monitor ESG goals. It also monitors the risk associated with the supply chain. ESG promotes supplier relationship management and supplier risk management.
- ESG measures enhance visibility and positivity. ESG goals benefit society and business.
- European online customers are paying high value to ESG. The products with green pricing get lower bank interest rates, rewards, reduced fees and mortgage loans. The Triodos Bank in the Netherlands, ABN AMRO, NatWest and Leeds Building Society offer mortgages to encourage green homes.
- Carbon pricing is the pricing strategy that adds the value of carbon emission to the price of the product. Electric cars are an example of renewable energy sources and carbon pricing. World Bank says that around 70 carbon pricing innovative plans have been started. The C6 bank from Brazil had launched a tool to calculate the carbon footprint of individuals and companies. The calculation of carbon emission is through carbon pricing, debit and credit cards.
- Banks offer ESG-linked loans that relate the ESG performance and interest rates. The companies get lower interest rates by ESG performance. As per one report, the loans offered in 2023 to companies have an ESG component.
- Social deposit pricing is the method of relating deposits to the social impact. The funds generated by the company and deposits should have a positive impact. An example of such a bank account is the Chama account of Kenya’s cooperative bank. The bank supports investment clubs, and social, welfare and self-help groups through the Chama account.
Conclusion:
The international stories of pricing strategies and bank schemes help cost accountants understand the link between ESG goals and values. ESG is a component that is added to many financial operations to solve environmental issues around the world.
