While dreadlocked protesters demonstrate on the streets of the world’s capitals about the exploitations of the earth’s natural resources, it could be the world’s financial experts wearing pinstripe suits who may be best placed to ensure we don’t completely wreck the environment for our children.
That is the message behind a whole series of global events including Downing Street’s revelation that it is pushing for companies – especially oil and mining outfits – to publish details of the payments they make to officials and politicians in developing countries.
In other words it’s up to company accountants to ensure the public know what sweeteners are being paid.
The news emerged in time for the Johannesburg summit on sustainable development but it is just one in a whole series of measures that add up to placing your average accountant at the heart of efforts to make sure natural resources do not expire and that the developed world isn’t taking the third world for a ride as part of the onward march of global markets.
Already this year we have seen the South African Institute of Chartered Accountants call for companies to account for the effect of AIDS on their businesses.
Organisations like Shell have been almost rehabilitated in the eyes of campaigners through the advent of awards for environmental reporting, and government officials have worked with the profession to spread the word about recognising the impact a company has on the environment.
The idea is that if companies tell the world what they’re up to – how much CO2 they produce, the trees they tear down or even the number of plastic cups they use – they’ll do more to reduce or change their working practices. Nobody wants the death of the planet on their corporate conscience.
Fiona Shaw, finance director at Friends of the Earth, says: ‘Accountants can do a lot in this respect. We are the people who produce the annual report. The more that you publish the more likely that you will want to improve the following year.’
But the Johannesburg summit also saw the ACCA come together with the United Nations Programme to launch what, among other things, adds up to an excoriating attack on international accounting standard setters for not doing more to aid the protection of the environment.
The report, Industry as a partner for Sustainable Development: Accounting, lists a host of positive moves from accountants but when it comes to the negative lays into David Tweedie’s IASB, and standard-setters, with all guns blazing.
‘There are no international financial reporting or auditing standards dealing explicitly with social, environmental or sustainability accounting, reporting or auditing issues,’ it says, landing a heavy blow given the statement is made with UN backing. This is not the only criticism but is the one that fingers the profession’s key bodies as responsible for a lack of progress over the last ten years.
The profession more broadly is also chastised for not getting its environmental act together. Accounting firms, and institutes, are, apparently, poor at implementing their own advice on sustainability issues and accountants have failed to make out the business case environmental reporting.
For its part the IASB seems uninterested in sustainable development.
One insider, expressing scepticism, asked whether ‘gold stars should be given to tree huggers’.
That aside, their real concern appears to be that quoted companies have issued no demands for sustainable development standards. ‘I have never seen any significant demand for this sort of thing in the capital markets,’ said a spokeswoman. ACCA REPORT SAYS ACCOUNTANTS HAVE: – Contributed to the conceptual development of the environmental reporting framework; – Encouraged environmental reporting through award schemes; – Begun to embrace non-financial reporting through corporate governance; – Helped expand the boundaries of accounting; – Had some influence on corporate behaviour; – Started exploring corporate governance and accounting. FAILURES INCLUDE: – A lack of involvement by a global standard-setter; – The fact that few firms below the Big Four appear engaged in selling environmental reporting to SMEs; – Lack of links between accountants and other groups like environmental economists; – Not seeing sustainability as major strategic issue for public companies, investors and other participants; and – Failing to push the business argument for sustainability management.
UK senior partner Phil Verity has been elected for a second term at Mazars
An audit partner has been appointed at Grant Thornton in its North West offices
KPMG has been appointed with “immediate” effect as the auditor of Dorcaster
The audit for Ibstock will be taken over by Deloitte following a competitive tender process