Professors Fold ESG Into Accounting Classes to Spark Interest

Professors gathered at the American Accounting Association’s annual meeting said merging environmental, social, and governance topics with accounting principles is helping them generate more interest in the classroom.

Melissa Larson and other university professors have been tasked with countering a shortage in recruiting new accountants amid a growing demand for audit services. The industry is exploring fixes like raising accountant pay and loosening academic requirements to bolster an industry that has endured a 17% drop in registered accountants since the pandemic.

“Students don’t know what accounting is, and whatever they’ve heard is not good,” Larson,who teaches introduction to accounting at Brigham Young University, said. “But we bring sustainability in, they’re all of a sudden like ‘Oh this is what I want to do.’”

At BYU, Larson said, implementing ESG into the accounting curriculum has significantly increased interest. Enrollment in her introductory class has jumped by 400 students this year, marking an increase of nearly 30%, and many of those students came from BYU’s environmental science program, she said.

Some students have asked the university to create an accounting minor after taking her course, in which students choose a company and analyze its sustainability commitments. Other undergraduates have created an extracurricular club to examine companies’ greenhouse gas emissions disclosures. Most students in the club are either accounting or environmental science majors, Larson added.

“They’re starting some synergy between environmental science and accounting with the club,” Larson said. “And that’s all driven by the students.”

Tracie Miller, a professor at Franklin University, said she has noticed a similar trend. Most students walk into their first accounting class without a sense of ESG, but almost immediately latch onto the concept, she said.

“Once you start talking about it, they’re like ‘Oh, that is important to me. I would be interested in what Pepsi does on this issue. What Marriott does,’” Miller said.

In her class, Miller presents students with fictitious ESG data sets for several imaginary hotel chains that she created along with Wendy Tietz, a professor of business administration at Kent State University. Having students answer questions about the data helps them understand the “alphabet soup” of acronyms associated with ESG before they delve into an existing report, Miller said.

“They’re very socially oriented, and they care a lot about the environment,” Miller said. “My sole goal is to get students excited about accounting, and I talk about sustainability because it shows students that accountants do something other than debits and credits.”

Hiring Advantage

Melanie Glover, a director at PricewaterhouseCoopers LLP, said the firm’s ESG work is expected to expand. That means familiarizing students with ESG as undergraduates could pose a hiring advantage, she said.

Accounting majors are crucial to the expanding practice area. Accounting processes, controls and the regulatory environment are harder to teach than sustainability, so recruiters often look for accounting students to fill ESG-related roles, she said.

“We hire a mix of accounting and non-accounting majors,” Glover said. “We take people with different skills and push them together, helping them to score the other skills that they didn’t have before.”

Corinne Dougherty, a partner at KPMG International Limited LLP, said her firm does not hire undergraduates directly into the ESG sphere. That’s because students are often unfamiliar with the concept, and need foundational experience in accounting before tackling a new and evolving area.

She said professors should teach their students about ESG so firms can ultimately move away from that pattern.

“Having that foundational understanding of greenhouse gas emissions and how we assure that information is great,” Dougherty said, referring to the process by which accountants confirm the accuracy of financial statements. “Adding that learning onto foundational accounting and auditing principles could be so valuable.”