Sustaining good business
This month's INTHEBLACK examines the topic of sustainability in all its varied forms. What the various articles and commentary articulate is the breadth and scope of the issues that fall within the broad umbrella that is sustainability.
Comprising a diversity of subjects that traditionally haven't featured in the scope of everyday business activity, sustainability issues are being viewed more and more as business considerations front and centre.
What we are witnessing is a radical economic, social and business shift to sustainable practice as we deal with the onset of a warming global climate as well as an emphasis on the social reach of the corporation in a rapidly converging global economy.
This is not merely a Western business fad. This shift is being manifested globally, including in the booming Chinese and Indian economies where the need to pair stratospheric growth with consideration of environmental and social impact is an increasingly crucial imperative.
Environmental impact, community building and the like, are all issues that businesses will increasingly have to factor in as key components of their overall performance.
How best to do this is a question the corporate world is still grappling with. It is absolutely critical that the accounting profession is intimately engaged in the development of rigorous non-financial reporting standards if they're to be successfully implemented.
Accountants capture and analyse vital corporate information upon which much corporate decision making is based. Their technical expertise, plus their ability to think plus create, are a powerful combination that makes them fundamental to the capture and reporting of sustainability practices and business success.
Renewable energy, low emissions technology, efficient water use, the education and health needs of communities in which corporations operate, diverse, I'm sure you'll agree, but all examples of the issues businesses must now consider to achieve sustainability goals.
CPA Australia will put the spotlight on these issues during our Congress season which begins later this month in Australia.
A particular highlight will be the visit to Congress of the CEO and the chairman of the Global Reporting Initiative (GRI), the pioneering global organisation that is the world leader in the area of non-financial reporting.
CPA Australia is particularly pleased to bring them to Australia at a time when sustainability issues are high on political as well as business agendas.
The GRI is in the process of developing sector-specific reporting guidelines to fit beneath its universally applicable general guidelines. They reflect the unique nature of non-financial reporting and the idiosyncrasies of particular industries.
As an organisational stakeholder of the GRI, CPA Australia will make a contribution to the development of these guidelines.
Separate, but closely related to these other issues of sustainability, is the issue of climate change. Emissions trading is the measure most readily associated with a business response to climate change.
While already in place in the European Union, emissions trading regimes, or at least variations of them, are highly likely to become prominent features of the global economic landscape over the next few years.
How businesses respond will be vital to their ability to survive and grow. Adapting to the requirements of an environment in which the costs of carbon emissions are increasing will pose the corporate world some fundamental questions.
Not every nation intends to implement an emissions trading scheme and in many of those that do, the exact shape of that scheme has yet to be established.
The global nature of business, however, means national boundaries are becoming increasingly porous. As a result, the potential for the economic conditions and regulations of one nation to impact on others is growing exponentially.
Again, the effects of this on pricing, trade and other decisions on the allocation of key business resources means accountants must be key drivers of the business transition to these new conditions. While emissions trading and broader sustainability issues present business with a series of profound challenges, they also present opportunities for innovation, learning and growth.
I believe we're entering a time when vision, courage and a willingness to think creatively will carry the day.
Consumer sentiment is such that the onus is on the corporate world to demonstrate early adoption of sustainable, low emissions practices.
Already we're seeing a greater emphasis on sustainability reporting driven by investor sentiment, and this demand will only grow. Importantly, a business that spruiks its sustainability credentials must be able to walk the talk. The market is increasingly discerning.
Business cannot operate as if in a vacuum. The issues that affect those in the broader society affect business as well. Through customers, employees, suppliers and extended networks we are connected to the wider world, have an impact on what occurs out there and are in turn, impacted ourselves.
I now realise my father's wisdom all those years ago when he used to tell me to be sure to turn off the tap while I was brushing my teeth. Sometimes the solutions are right before our eyes.
I hope this edition will provide you with some ideas and inspiration.
Alex Malley FCPA is CPA Australia president.
What we are witnessing is a radical economic, social and business shift to sustainable practice
For further information or to post a comment, visit the President's blog.
Reference: October 2008, volume 78:09, p. 8
