by Helen Brand, chief executive, ACCA
If you missed the Global Virtual Conference at the end of last month, then you missed a couple of gems. Don’t worry though – the sessions are still available to view on demand.
One of my personal highlights was the interview with Professor Mervyn King. Professor King has a rather intimidating CV (Judge, South African Supreme Court Counsel, holder of numerous professorships, chairs, and directorships) and has had an almost unparalleled impact on corporate governance. He is the eponymous King of Kings I, II, and III. I thoroughly recommend you give his interview a look when you have the time.
One of Professor King’s current passions is the area of sustainability reporting (King is the chair of the Global Reporting Initiative), which is an area that ACCA takes a keen interest in too.
Sustainability matters, whether we like it or not. Even when the ramifications of the financial crisis die down, we’ll be left with the climate change crisis. According to the Global Footprint Network, 1.4 planet earths are needed to sustain the current population.
Everyone has responsibilities when it comes to combating climate change, and businesses are no different. In fact, given that enterprise is such a vast consumer of the world’s resources, you could argue that businesses had a bigger responsibility than others – many multinationals have bigger economies than some countries.
The key thing with responsibility is accountability. Businesses have long been required to report their financial activity to stakeholders in their annual reviews, but now sustainability reporting has to catch up.
There needs to be a universal standard that requires businesses to report in clear language the impact their activity has on the environment. Stakeholders need to be able to use the information to compare and contrast the sustainability performance of companies, just as they do with financial information.
As Professor King said in his interview, companies know their stakeholders and shareholders want this information and they want to give it to them, but the lack of clarity in the sustainability reporting requirements leads to caution and confusion.
Moving towards a clear and consistent method for businesses to report their sustainability impacts is the goal of the newly formed International Integrated Reporting Committee (IIRC), set up by the GRI and the Prince of Wales’ Accounting for Sustainability project (A4S). It’s a personal honour for me that I’ve been asked to sit on the steering committee of the IIRC, alongside representatives from (among others) the Big Four, IFAC, FASB, the IASB, and several multinational businesses.
United and focused action on sustainability is the answer. I’ll keep you posted.