ACCA recently launched its Sustainability Agenda for Action, Going Concern?, for which I was pleased to provide the foreword.
At ACCA, we are proud to have championed the extension of corporate reporting, so that it includes the social and environmental aspects of business. Being at the forefront of this field for almost two decades has enabled ACCA to become a respected global leader in the sustainability debate.
In 1990, when ACCA first started talking about sustainability, it was quite new and challenging stuff. Today, 95% of FTSE 100 companies are producing some form of sustainability reporting. So we've made much progress.
But there is still a long way to go.
While we worry about the impact of big business on society, we need to remember that 99% of the world's businesses are SMEs. The sector generates two-thirds of all private sector jobs within the EU - that's a massive 75 million. And more than half of private sector turnover is generated by SMEs. Collectively, they have huge financial clout - and a big impact on sustainability.
But developing global standards with which SMEs can work isn't always the priority it perhaps should be. IFRSs were originally modelled with large organisations in mind. Adapted international financial standards for SMEs are now being road-tested - and we await the outcome of consultation with keen interest.
There are global standards for sustainability reporting in the form of the Global Reporting Initiative (GRI) Sustainability Reporting Guidelines, which are being used by a number of leading businesses around the world. GRI should now also develop a more accessible version of its current sustainability reporting guidelines, specifically geared to smaller organisations.
When advocating global consistency, we do need to pay attention to the needs of SMEs and be aware of the support and guidance they might need to achieve best practice. ACCA doubts that significant progress can be made without the stimulus of government policy providing an appropriate incentive to SMEs. And much of this needs to be incentive-based and led by government. We therefore recommend that governments adopt or produce guidance to help SMEs measure their key environmental and social impacts and to review the incentives they provide under corporate tax systems to encourage investment in cleaner technology.
Of course, SMEs themselves need to be more proactive. But we, in the professional accountancy community, also need to do our bit to provide the support SMEs need to rise to the challenges and expectations the public have of them in regard to corporate responsibility.
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