Gavin Hinks, Accountancy Age
On the money with Gavin Hinks
08 Jan 2009, Gavin Hinks, AccountancyAge
http://www.accountancyage.com/aa/opinion/1789914/on-money-gavin-hinks
Just before Christmas he appeared at an Accounting for Sustainability event and appealed to advisers to ensure that some way is found to quantify the cost of carbon and asked them to take the lead in providing the right tools to present the costs to business.
Oh dear. Will HRH get anyone’s attention as they fight the effects of recession, financial crisis and the credit crunch. Does anyone care now that they have more pressings issues to deal with... like survival? Could you have persuaded Woolies’ execs to think about carbon footprints as they struggled to save more than 25,000 jobs? Are the guys who used to work at Lehman Brothers thinking about tools for quantifying carbon costs?
I think not and the fact is that going into the New Year what’s going to be on the mind of accountants and FDs is cash flow, liquidity, working capital, cost cutting. ‘How do I make the world a better place?’, as noble and worthy and pressing as that is, is likely to slip down the corporate and accounting agenda.
That’s a shame because as Prince Charles pointed out, great solutions often come at a time of crisis and cutting carbon costs could work well as part of general cost cutting measures.
And he has the accounting institutes on board partly because everyone likes to work with HRH, but also because they buy into the green accounting mission. On the day of Charles’ speech the institutes, along with big companies like BT and HSBC, gathered in a huddle to discuss what they could do next a sort of extended green gentlemen’s club.
Shame of it was that part of the process remained shut away behind a closed door. One thing this project will need is publicity and one way of doing that would have been to throw those doors wide open. Every little helps. Especially in the current climate. If you’ll excuse the pun.
Gavin Hinks is editor of Accountancy Age
© Incisive Media Investments Limited 2012, Published by Incisive Financial Publishing Limited, Haymarket House, 28-29 Haymarket, London SW1Y 4RX, are companies registered in England and Wales with company registration numbers 04252091 & 04252093
Visitor comments
It could be a real business risk to let green issues slip off the corporate agenda in 2009...
As Gavin says, what?s going to be on the minds of accountants and FDs in 2009 is cash flow, liquidity, working capital and cost cutting. But the green question which Gavin states ? ?How do I make the world a better place?? should really be ?How can embracing the green issue be good for my business??
How can profits be improved? Increasing revenues and reducing costs seem to be good starting points. At BASDA (The Business Application Software Developers? Association ? the UK IT trade association) we have seen our members? customers falling into four broad revenue or cost-driven groups around the green issue:
* Green leaders ? those organisations embedding environmental concerns and CSR into their brand and using this as a business differentiator. Examples from near-history would be The Body Shop and The Co-op Bank. More recently Marks & Spencer and BP. The focus here is to create competitive edge to win more business. The green issue is being used to drive revenues.
* Supply chain followers ? these are often suppliers to the leaders and their policies and actions are driven by the green promises of their major customers or the green demands of doing business with the public sector. The focus here is to keep clients and, over time, win more business ? again a revenue focus.
* Cost savers ? these organisations may dress themselves up as leaders, they may even win green awards but the focus is really cost reduction and this is often the business case used to sell the green initiative to the board. For example, The Post Office ? they made significant fuel and hence cost savings by improving transport efficiency ? there was less focus on reducing the amount of junk mail that they had to deliver in the first place.
* Legislation-driven ? these companies will only act when changes in the law force their hand. The speed of reaction required depends on the industry. For example, power generators face more pressing green demands than the financial services sector. Unless a company decides to become a leader then the focus here is the cost of staying in business.
Letting green issues slip off the corporate agenda is a major business risk - even in a difficult year like 2009 - from the perspectives of cost, revenue, opportunity, reputation and supply chain continuity. Finance professionals have a key role to play in keeping these issues in front of the board.
Posted by: Peter Robertshaw, Strategic Thought Group & Co-chair of the BASDA Green Special Interest Group , 09 Jan 2009 | 00:00