Certificate in

Sustainability
for Finance

Association of Chartered
ACCA
Certified Accountants
Philippine Institute of Certified
PICPA
Public Accountants

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Course Outline

Course 1 - AN INTRODUCTION TO SUSTAINABILITY FOR FINANCE PROFESSIONALS

1 – An Overview of Sustainability
a. Meaning of sustainability and sustainable development
b. Related concepts of triple bottom line, sustainability reporting, and ESG
framework
c. Introduction to the United Nations Development Goals
d. Climate and environmental challenges
e. Social and human challenges

2 – Environmental, Social, and Governance-Related Issues and Risks

a. The scope of environmental, social, and governance (ESG) risks
b. COSO’s Enterprise Risk Management Framework

3 – Sustainable Value Chains and Business Models

a. Sustainability and value chains
b. Sustainable business models and practices
c. Sustainable economies

4 – Sustainability Accounting and Reporting

a. Sustainability Accounting
b. Reporting and disclosures
c. Science-Based Targets Initiative
d. Big data for sustainable development
e. Responsible investing

Course 2 - CLIMATE RISK AND REPORTING FOR FINANCE PROFESSIONALS

1 – Introduction to Climate Change

a. ESG Categories and climate change as an ESG topic
b. The planetary boundaries: what impacts should we limit?
c. Global risk analysis: the top climate-risks that organizations face

2 – Understanding the External Drivers of Change

a. Two perspectives when looking at the impacts between organizations and
climate
b. Categories of potential impacts
c. The Paris Climate Agreement
d. Physical and transition risks and impacts

3 – Reporting on Climate Change

a. Using existing accounting standards to report on climate risk
b. Towards better climate disclosures
c. Climate-related opportunities

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Course 3 - SUSTAINABLE DEVELOPMENT GOALS AND THEIR IMPACT FOR FINANCE
PROFESSIONALS

1 – Introduction to UN SDGs
a. A deeper look at SDGs
b. Progress on SDGs
c. SDGs: What’s in it for professionals?
d. SDG opportunities and risks
e. Impact and the Theory of Change

2 – Impact Business Models and Products

a. Aligning SDGs with value creation
b. Overview of the global goals
c. Innovative impact business models
d. Examples of SDG commitments

3 – Impact Reporting Frameworks

a. Impact Management Project
b. B Impact Assessment
c. SDG Action Manager
d. Future-Fit Business Benchmark
e. Impak IS
f. Supportive frameworks

Course 4 - ESG PERFORMANCE AND METRICS FOR FINANCE PROFESSIONALS

1 – ESG Performance and Metrics

a. ESG issues
b. The role of accountants

2 – ESG Processes and Reporting Principles

a. Identifying core ESG issues
b. Building ESG data processes
c. Principles for reporting ESG information

3 – Reporting ESG Metrics

a. Selecting ESG metrics
b. Environmental metrics
c. Social metrics
d. Governance metrics
e. Financial and forward-looking metrics

Course 5 - SUSTAINABILITY ANALYTICS FOR FINANCE PROFESSIONALS

1 – Introduction to Sustainability Analytics

a. Nature of sustainability analytics
b. Objectives of sustainability analytics

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 c. Opportunities and challenges

2 – Planning Sustainability Analytics

a. Key stages of planning
b. ESG data types
c. Financial planning

3 – Sustainability Analytics Approaches

a. Data preparation
b. Methods, techniques, and tools

4 – Sustainability Analytics Outcomes

a. Key stages of outcomes
b. Examples of sustainability analytical reports

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Rufo R. Mendoza, PhD, CPA
[email protected]
[email protected]

Our resource person is a CPA and has a master's degree in development management and
a Ph.D. in Community Development and Agribusiness Management both from the
University of the Philippines Los Baños (UPLB). He is the recipient of the 2010 Distinguished
Alumnus Award for Good Governance and Management in the Public Sector from the
College of Public Affairs of UPLB.

He was Vice-Chair (2011-2014) and Member (2007-2011) of the Professional Regulatory

Board of Accountancy, the highest body in the Accountancy profession, and Chair of the
Continuing Professional Development Council (2007-2014). He was a two-time national
awardee as Outstanding CPA in Professional Development in 2008 and Outstanding CPA in
Government Service in 2010 from the Philippine Institute of Certified Public Accountants.

He was Chair of the PICPA’s National Committee on Sustainability and Integrated Reporting
for two terms (2019-2021) where he received the Presidential Award of Recognition as
Chair of the National Committee in both terms.

Recently, he received the Accountancy Centenary Award for Excellence as one of the Top
100 notable CPAs in the country.

In 2016, he completed the Certified Training on Sustainability Reporting of the Global

Reporting Initiative, through the Indonesia-based National Center for Sustainability
Reporting. In 2017, he completed the GRI Certified Training Module on the Transition to
GRI Standards. In 2020, he also completed the GRI Professional Certification Program
courses on Sustainability Reporting Process and Integrating the SDGs into Sustainability
Reporting. He is the first (and so-far the only) Filipino who has earned a Certificate in
Sustainability for Finance from the Association of Chartered Certified Accountants.

He was a graduate school professor in leading institutions in the Philippines: Asian Institute
of Management; Ateneo de Manila University School of Government; UP Open University,
University of the Philippine Los Banos; and De La Salle Lipa Graduate School. He is currently

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the Dean of the School of Graduate Studies at the First Asia Institute of Technology and
Humanities.

He has written four books, four book chapters, and over 70 research papers and articles.
He has received six best or outstanding paper awards in international conferences.

For 20 years, he has been engaged in consulting as a Senior Consultant in Public Financial
Management (PFM) at the World Bank, Asian Development Bank, European Commission,
UNDP, Australian Agency for International Development, United States Agency for
International Development, and Japan International Cooperation Agency.

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 Climate and Environmental Challenges

1 The impact of human activity

2 The extinction crisis
3 The carbon dioxide challenge
4 IPCC analysis of climate change
5 Climate scenarios
6 Our planet, our business
7 The Living Planet Report
8 Business and nature
9 Climate finance

The impact of human activity

The Intergovernmental Panel on Climate Change (IPCC) is the United Nations body for
assessing the science related to climate change. It is used by policymakers as a source of
regular scientific assessments on climate change, its implications and potential future risks,
as well as to put forward adaptation and mitigation options.

Work carried out by the IPCC shows a correlation between human activities and an increase
in greenhouse gases such as CO2 in the atmosphere. Greenhouse gases (GHGs) trap heat in
the atmosphere and contribute to the warming of the planet.

Here is an overview of the other main GHGs released from human activities:

GHGs released from human activities:

• Agricultural Methane (CH4)

The main sources of methane (CH4) emissions from agriculture are enteric fermentation,
manure management, rice cultivation and residue burning, with FAOSTAT being the
main source of statistics on agricultural emissions

• Nitrous Oxide (N20)

Nitrous oxide (N20) is a colorless gas stored as a liquid. Breathing nitrous oxide can cause
dizziness, unconsciousness, and even death. Long-term exposure can lead to
infertility. Contact with liquid nitrous oxide can cause severe frostbite. Workers may be
harmed from exposure to nitrous oxide. The level of exposure depends on the dose,
duration, and type of work being done.

Nitrous oxide is a colorless gas that is commonly used for sedation and pain relief, but is
also used by people to feel intoxicated or high.

It is commonly used by dentists and medical professionals to sedate patients undergoing

minor medical procedures. It is also a food additive when used as a propellant for
whipped cream, and is used in the automotive industry to enhance engine performance.

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 It is also increasingly being used to treat people withdrawing from alcohol dependence.
Nitrous oxide is classified as a dissociative anaesthetic and has been found to produce
dissociation of the mind from the body (a sense of floating), distorted perceptions and
in rare cases, visual hallucinations.

Nitrous oxide is used in many industries. It can come from anesthetic equipment,
surgical patients, and storage cylinders. Some examples of workers at risk of nitrous
oxide exposure include the following:

• Medical personnel who work in surgical rooms in hospitals, surgery centers, or

medical offices
• Dental workers where nitrous oxide gas is used as an anesthetic
• Recovery room personnel who are exposed to outgassing patients who emit fumes
after surgery
• Workers in laboratories and facilities where compressed gas cylinders are moved
and stored
• Service workers who clean and maintain surgical rooms before or after surgery

• Halogens
They are reactive non-metallic elements that form strongly acidic compounds with
hydrogen from which simple salts can be made.
• Chemicals
• Plastics
• Pharmaceutical
• Pulp and paper
• Textile
• Oil industries

The extinction crisis

The impact that human beings have on our planet is such that it is putting all other species at
risk of extinction. Whether it is plant, animal or insect, the biodiversity of the planet is at a
crisis point.

The maps below show the percentage of threatened plant and animal species worldwide.
• Plant species – Over 18%
• Animal species – Over 9%

The carbon dioxide challenge

Climate carbon dioxide levels typically fluctuate over the course of hundreds of thousands of
years.

This is essentially a natural cycle of biological eco-design.

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As you can see from the above graph the current growth brings us to a level unknown to our
current geological era. This poses a problem because CO2 has a specific property, called
radiative forcing.

Radiative forcing is the ability of a gas to change the balance of incoming and outgoing energy
in the Earth-atmosphere system. As the level of CO2 in the atmosphere increases, the
outgoing energy is reduced. This energy stays trapped in the atmosphere as heat,
contributing to the Greenhouse gas (GHG) effect, which leads to a global increase in average
temperatures.

These changes translate into real-world impacts including increased average temperatures,
higher levels of precipitation, and rising sea levels.

IPCC analysis of climate change

The Intergovernmental Panel on Climate Change (IPCC) analyzed climate change impacts in
their 2019 report.

They drew up the graph below to represent the possible scenarios.

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The left-hand side of the graph shows the average temperature data since 1960.

Following the current trajectory, CO2 levels will be over the 1.5°C limit by 2040.

The right-hand side of the graph shows the probability range of temperature evolution for
three scenarios:

• The blue scenario is where we do implement agreed-upon commitments

• The grey scenario is where we do not reach carbon neutrality before 2055
and reduce other GHG emissions after 2030
• The red scenario is where the probability decreases again if no action is taken
to reduce non-CO2 GHG after 2030

The current situation is that we are in a likely range of global warming of between 0.8°C and
1.2°C above pre-industrial levels, based on average global surface temperatures measured for
the decade 2006 – 2015.

In order to increase our chances of avoiding excessive climate change consequences, the IPCC
state we need to reach net-zero carbon emissions by 2050 AND reduce other GHG emissions
by 35% or more by 2050 compared to 2010.

The longer the actions needed to reach this target are delayed, the lower the probability that
we will achieve it.

Climate scenarios

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To evaluate how we could deal with the challenge and the possible future effects of climate
change, we must consider several potential global warming scenarios, and consider how this
could impact our organizations.

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The grey area represents the emissions if current practices continue, which would result in
warming of between 4.1 – 4.8°C.

The darker blue line represents emissions if current policies are enacted, and would result in
warming of 2.7 – 3.1°C.

The paler blue line represents emissions if current pledges and targets are met, and would
lead to warming of 2.4 – 2.7°C.

It’s clear that in order to meet the goal of limiting warming to 2°C or 1.5°C, further steps would
need to be taken to reduce emissions.

Our planet, our business

Humanity has become one of the most successful and dominant forces that planet Earth has
seen and the impact that we have on the environment is putting at risk the very land that we
depend upon.

For organizations to counter this impact, multiple frameworks have been put into place to
allow for careful planning and consideration about the positive steps we should take for
future sustainable development.

The pressures that our planet is under are detrimental to all of us who live on it. We must put
into motion targets and goals to promote sustainable models to ensure that we do not suffer
in the future.

The Living Planet report

The natural world underpins our economy, and it is important to explore how the business
sector can be a force for change to help restore nature and fix the relationship between our
planet and our businesses.

Not only are we being forced to change our approaches to sustainable business, but our
stakeholders are changing. These views on our organizations are becoming global, with the
need to disclose and promote change, so that future generations see businesses as a force
for good.

Business and nature

Sir Robert Watson, Chair of the Intergovernmental Science-Policy Platform on Biodiversity
and Ecosystem Services (IPBES) states that,

"Nature underpins every person’s wellbeing and ambitions – from health

and happiness to prosperity and security"

The natural world provides humans with the systems upon which they rely, how these
systems are regulated as well as cultural and wellbeing benefits.

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Over half of the world’s GDP, $44 trillion of economic value, is at moderate or severe risk due
to natural loss. Nature loss has concrete and immediate costs and impacts for businesses,
such as:
• Operational risks
• Supply chain continuity, predictability and resilience
• Liability risks
• Regulatory, reputational, market and financial risks

Climate finance
Making changes to limit climate change requires money. The term “climate finance” is often
used in this context. The United Nations Framework Convention on Climate Change (UNFCCC)
defines “climate finance” as

"local, national or transnational financing - drawn from public, private and alternative
sources of financing - that seeks to support mitigation and adaptation actions that will
address climate change."

The UNFCCC, following the principle of “common but differentiated responsibility and
respective capabilities”, expects developed countries to provide climate finance to assist
developing countries.

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 Social and Human Challenges
1 Three key SDGs
2 Corruption
3 Inequality

The social and human challenges that we face are unfortunately not new. But that means that
we are well positioned to identify and act on the fundamental issues.

The Sustainable Development goals provide a solid foundation on which to build, and we
know the key barriers that need to be overcome.

Three key SDGs

The 17 SDGs are underpinned by the three core principles within the SDG system. No poverty,
zero hunger, and good health and well-being are considered fundamental to humanity's
need for a brighter and more promising future.

Corruption
One of the main barriers to greater accountability on environmental, social and governance
issues is corruption. Clean systems are vital for progress to be made in sustainable
development.

Transparency International define corruption as: "the abuse of power for private gain."

Corruption:
• Erodes trust
• Weakens democracy
• Hampers economic development
• Further exacerbates inequality, poverty, social division and the
environmental crisis

Exposing corruption and holding the corrupt to account can only happen if we understand the
way corruption works and the systems that enable it.

Inequality
Another barrier to sustainability is inequality. Transparency International conducted research
into the Gini index for certain countries between 2015-2019. The Gini index represents the
income inequality or wealth inequality within a nation by calculating the difference between
the highest and lowest incomes. The closer it is to 1, the greater the inequality.

It’s in this imperfect environmental and social environment that organizations need to
function. These challenges translate into constraints that need to be dealt with. Fortunately,
there are useful models and frameworks that we can employ to support a more sustainable
future for our organizations.

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ESG Issues
E S G
1 Access to communication
2 Access to finance
3 Access to healthcare
4 Accounting
5 Biodiversity and land use
6 Board
7 Business ethics
8 Carbon emissions
9 Chemical safety
10 Climate change vulnerability
11 Community relations
12 Consumer financial protection
13 Controversial sourcing
14 Electronic waste
15 Financing environment impacts
16 Health and safety
17 Human capital development
18 Insuring health and demographic risk
19 Labor management
20 Opportunities in clean tech
21 Opportunities in green building
22 Opportunities in nutrition and health
23 Opportunities in renewable energy
24 Ownership
25 Packaging material and waste
26 Pay
27 Privacy and data security
28 Product carbon footprints
29 Product safety and quality
30 Raw material sourcing
31 Responsible investment
32 Supply chain labor standards
33 Tax transparency
34 Toxic emissions and waste
35 Water stress

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Performance for ESG-Related Risks

Identifies risk Assesses and prioritizes risk Implement risk response

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1 Convene meetings with both risk management and sustainability practitioners to
understand ESG-related risks
2 Define the impact of ESG-related risks on the organization precisely
3 Develop the business case for the response and obtain buy-in
4 Evaluate risk responses at the entity level to understand the overall impacts to the
entity risk profile
5 Examine the entity’s risk inventory to determine which ESG-related risks have or
have not been identified
6 Identify and challenge organizational bias against ESG issues
7 Identify the ESG-related risks that may impact the organization’s strategic and
operational plans
8 Implement the risk response to manage the entity’s risk
9 Involve ESG risk owners and sustainability practitioners in the risk identification
process to leverage
10 Leverage subject-matter expertise to prioritize ESG-related risks
11 Select an appropriate risk response based on entity-specific factors (e.g., costs and
benefits and risk appetite)
12 Select and document data, parameters and assumptions
13 Select appropriate assessment approaches to measure risk severity
14 subject-matter expertise
15 Understand the entity’s criteria for prioritizing risks
16 Understand the metrics used by the entity for expressing risk (i.e., quantitative or
qualitative)
17 Understand the required output of the risk assessment (e.g., the impact in terms of
the strategy and business objectives)
18 Use root cause analysis to understand drivers of the risk

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Individual Workshop

1 What do you think will be the top five environmental risks for your organization
in 10 years’ time?

2 What could you do to address those risks?

3 What do you think is most challenging about addressing these risks?

Top Five Environmental What could be done to What are the challenges in
Risks address the risk? addressing the risk?

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Value Chain Sustainability

Inbound Operations Outbound Marketing and Service

Logistics Logistics Sales

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Discussion Questions

1 What opportunities for PSS, eco-design and circularity exist in your industry
and in your organization?

2 What would be the implications to your organization of adopting a more

sustainable business model?

3 What would be the implications to your organization if a competitor adopted a

more sustainable business model?

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