MAC Alumni Get Insider’s View of Sustainability

Sustainability is an emerging field, and Jenkins Master of Accounting Program alumni recently got an inside look at how it’s developing by participating in the MAC Program Lifelong Learning Virtual CPE Summer Series.

Much of the work at hand, according to International Sustainability Standards Board (ISSB) member Jeffrey Hales, is about standardization: of everything from metrics that measure sustainability to the definition of the term itself.

“In the context of corporate performance, I’m thinking about reflecting a company’s ability to continue to create value through its business activities,” Hales said at a July 14 virtual talk that was part of the Jenkins MAC lifelong learning series. “Not just today or in the past, but over the short, medium, and long term in the future.”

Hales, who also holds the Bake Chair in Global Sustainability Leadership at the University of Texas, recounted his own career path and discussed the fast-moving effort to set international standards that will shape how sustainability is practiced and reported on globally.

The International Financial Reporting Standards Foundation announced its intent to develop international sustainability standards in late 2021. Less than a year later, Hales and 13 other board members had gotten to work. Their aim, he said, has been to develop a framework that builds on existing work by other bodies, helps companies to meet their regulatory obligations, and, ultimately, helps investors to make better decisions.

“My hope is that, from a sustainability perspective, we can help companies talk about the sustainability issues that are core to their business – the ones that investors really need to understand to get a complete picture of the company’s financial performance, position, and prospects,” he said. “And we want to do that in a way that’s a relatively robust, so that the standards can be applied by a company anywhere around the world in a way that still makes sense.”

So far, the Board’s work has been received well. In 2023, the International Organization of Securities Commissions endorsed the ISSB standards as suitable for use in capital markets regulation. And roughly 20 jurisdictions, accounting for nearly half of global GDP, have already begun the process of considering whether and how to incorporate the ISSB standards into their local requirements.

Hales didn’t seek out a career in sustainability, but one found him. By 2012, he’d secured tenure and built a formidable publication record over a decade in academia. He was looking for something bigger than his own research agenda to follow. Around that time, Sustainability Accounting Standards Board founder Jean Rogers was looking for members to start its standards council. Hales had previously been involved in standard setting at the Financial Accounting Standards Board and so, despite knowing little about sustainability, he said yes.

“I didn’t get involved as a way to advance my career,” he said. “I was really looking for something outside of that. But the irony is that it’s been very beneficial to my career in a way that was completely unexpected.”

Sustainability holds similar opportunity for the students and professionals who made up Hales’ audience.

“There has been a wave of increased demand for the amount of transparency we expect from companies,” he said, “and this is creating huge opportunities and demand for the skill sets that accountants have.”