Management accounting for embedding net-zero goals in an automotive company.

This comprehensive report delves into the role of management accountants in integrating net-zero goals within an automotive company. It explores how sustainability agendas, such as the Sustainable Development Goals (SDGs), necessitate strategic and operational changes, and how senior management can leverage both formal and informal controls to foster shared understanding and values. The study highlights the importance of well-embedded control systems in successfully integrating net-zero initiatives and addresses the potential conflicts that may arise during sustainability investment projects.

Key findings include the increased involvement of management accountants in strategic decision-making, the need for enhanced cognitive skills related to sustainability, and the benefits of internal and external upskilling opportunities. The report also emphasises the role of senior leadership in supporting net-zero initiatives and the effectiveness of informal controls in promoting employee participation and motivation.

Through a detailed case study of a UK-based heavy vehicle manufacturer, the report provides insights into the specific management accounting practices and roles that facilitate the operationalisation of net-zero goals. It underscores the importance of collaboration between management accountants and operational teams in performance reporting and risk management and suggests that traditional profit-oriented investment appraisal techniques may need to be adapted to better align with long-term sustainability objectives.

This research is part of CIMA’s ongoing efforts to advance the science of management accountancy and offers valuable recommendations for practitioners and educators aiming to integrate sustainability into their management accounting practices.