Archives For green economy

By Ada Leung, head of ACCA China

Being a part of the Accounting for the Future global virtual conference, which was held in October, really helped to push our messages about the green economy in China and Hong Kong.

China’s success in evolving a green economy is in everyone’s interest. It is also in the interest of the accountancy profession – not just in Hong Kong or Mainland China, but globally – to play a central role in helping Chinese business adapt to the changing operational and legislative landscape.

During the conference week, ACCA China launched a report, Greening China’s Economy: Pushes and Pulls on Corporate China, which looks at how an increased focus on environmental and social performance, at international and national levels, is affecting the private sector in Mainland China and Hong Kong.

In seven chapters, the report explores the many factors that businesses need to consider – from government policies aimed at reducing carbon emissions or pollution levels, to demands from customers based outside of the country to improve labour conditions in factories, to calls from investors for greater disclosure on environmental, social and governance (ESG) topics. It’s a wide-ranging report tackling wide-ranging issues.

At our event, we had speakers such as guest of honour Christine Loh, under secretary for the environment of the Hong Kong SAR Government; speakers from PwC Hong Kong and Beijing; speakers from the Hong Kong Exchanges and Clearing Limited (HKEx) and the Shanghai Stock Exchange (SSE), and speakers from businesses such as BASF, Sinopec, MTR Corporation Limited and John Swire & Sons (HK) Ltd.

I summed up the conference in Beijing by saying that sustainability performance one day may well be as important as economic performance. Hong Kong and Mainland China have worked closely like never before. China’s drive towards a green economy could be a challenge, but there are always opportunities as a result of change and as a result of challenges. It is a changing world, no doubt, but it is important for any business to be properly aware of the implications of change, and how to deal with them.

By James Bonner, independent sustainability consultant

A central theme in this series of blog posts is the acknowledgement that business, and the wider economy, is inextricably connected to, and dependent on, the natural environment – something that organisations, and their wider stakeholders, are increasingly recognising.

From the impacts and dependencies businesses have on ‘natural capital’, to drivers encouraging reporting and consideration of environmental issues by business, there is a realisation that the economic system (nationally and globally) relies upon the natural environment. Moreover, our economy, and the activities of business that drive it, negatively impact vital environmental resources and systems with likely adverse consequences for  long term economic growth, social development and environmental sustainability. This highlights a difficult, and fundamental, dilemma:

-          Our economic system is reliant on the natural environment.

-          The natural environment is being depleted and degraded, to a point of destruction, by our economic system.

Taking this paradox into account, it is clear that there is a pressing need to fundamentally change our economic approach, and as the WBCSD (World Business Council for Sustainable Development) state in their Vision 2050 project, a requirement that ‘economic growth is decoupled from environmental and material consumption and re-coupled to meeting needs.’ As such, the concept of a ‘green economy’ has been promoted as an alternative economic model, an approach based on the principles of sustainable development theory and ecological economics. The UK Government defines the concept in its 2011 paper ‘Enabling the Transition to a Green Economy: Government and business working together’ through stating: ‘A green economy is not a sub-set of the economy at large – our whole economy needs to be green. A green economy will maximise value and growth across the whole economy, while managing natural assets sustainably.’

Such a theoretical definition of the concept might seem somewhat notional but it does serve to capture the essence of what should be aspired to when determining such a new economic approach. Furthermore, it highlights that our current economic structure, in many senses, does the opposite to this – generating economic growth and development that is not inclusive across society, while exhausting and degrading natural assets. In any case some more applied definitions of a green economy have been offered including UNEP’s (United Nations Environmental Programme) perspective stating that ‘practically speaking, a green economy is one whose growth in income and employment is driven by public and private investments that reduce carbon emissions and pollution, enhance energy and resource efficiency, and prevent the loss of biodiversity and ecosystem services’.

Additionally the World Bank, in its substantial report from earlier this year ‘Inclusive Green Growth: The Pathway to Sustainable Development, describes the green economy in terms of ‘growth that is efficient in its use of natural resources, clean in that it minimizes pollution and environmental impacts, and resilient in that it accounts for natural hazards and the role of environmental management and natural capital in preventing physical disasters.’

As these more practical definitions infer, the green economy is/will be based on economic development and business activity which is low in carbon emissions and pollution (e.g. renewable energy and sustainable transport), that increases resource efficiency (e.g.  green buildings and eco-design), can help mitigate environmental impacts (e.g. flood management and urban planning), and will conserve key environmental services (e.g. sustainable agriculture and habitat conservation).

Find out more about the green economy at ACCA’s Accounting for the future online conference.