New research by The Prince’s Accounting for Sustainability Project shows that, despite overwhelming evidence of the financial implications of a number of major environmental and social trends, senior decision makers within business and public sector remain unconvinced about the relevance of these issues to day-to-day decision making.
London, 13 December 2012 – A new report launched today by The Prince of Wales’s Accounting for Sustainability Project (A4S) indicates that accounting and financial professionals may remain unconvinced when it comes to understanding the risks – and opportunities – of environmental and social issues which will reshape the economy in the coming decades.
The report, Future Proofed Decision Making: Integrating environmental and social factors into strategy, finance and operations, sheds new light on the context in which urgent work to value social and natural capital is currently taking place, revealing that senior decision makers first need to understand why these issues are relevant to Board level decision making and for the credibility of the data to be proven.
A senior manager that participated in the research explains one view, “Almost the only non-financial factor that the Board leads on is corporate reputation… Apart from that one, every single decision has to be financially-based.”
According to UNEP, the global economy depends on an estimated US$21-72 trillion of services provided by the environment – natural capital that is traditionally not accounted for in decision making or profit.
The research indicates that although some decision makers recognized that sustainability drives growth for their companies, there was still scepticism by others over the quality and robustness of many types of environmental and social data, which is preventing more widespread use by senior management. As one chief executive interviewed explained, “The Holy Grail is a well-being impact: our contribution per unit of planetary impact. But this is incredibly difficult to grapple with.”
The report findings were announced at the Accounting for Sustainability Forum, which His Royal Highness The Prince of Wales convenes each year to bring together key stakeholders to share best practices. The event, attended by around 200 representatives from the international accounting and business communities, investors, government, academia and civil society, gathered at St. James’s Palace to hear His Royal Highness The Prince of Wales speak about the role of the finance and accounting community in future proofing our economy. Also sharing their insights at the Forum were Peter Bakker, President of the World Business Council for Sustainable Development (WBCSD), Christianna Wood, Former Chairman of the Board of Governors of the International Corporate Governance Network and Jean-Marc Huët, Chief Financial Officer, Unilever.
The report also summarises the key barriers and drivers for change and how A4S’s work in 2013 will be shaped by the need to address these concerns, along with steps organizations can begin to take now. Part of A4S’s 2013 programme of work includes the launch of an international leadership network for CFOs. A4S will also take part in the development of a training programme for CFOs and the finance community more generally, working in partnership with the University of Cambridge’s Programme for Sustainable Leadership and with WBCSD.
Sarah Nolleth, Director of The Prince’s for Accounting Sustainability Project (A4S) said, “There is a clear and urgent need to communicate better to senior decision makers – especially CFOs – the business case for considering the environment and society in the day-to-day running of their organization. Not only do the report findings show that the business case needs to be articulated more effectively, but they also show that it needs to be made in the right way and using the right language in order for change to take place.”
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Bethan Walker, Communications Officer
Charlotte Masiello-Riome, Communications Strategy Advisor
Notes to editors:
About The Prince of Wales’s Accounting for Sustainability Project
A4S was established by HRH The Prince of Wales in 2004 to bring together the finance and accounting community from business, government, academia and the capital markets in order to develop the institutions, systems, tools and approaches needed to build a sustainable economy. A4S’s work focusses on ways to integrate measures of economic performance, environmental health and social well being to provide a ‘future proofed’ framework for decision making and build the capacity needed to take action.
For more information about the Accounting for Sustainability Forum, visit the Forum event webpage which includes a copy of the report launched on the day, a transcript of His Royal Highness The Prince of Wales’s speech and other resources. http://www.accountingforsustainability.org/events/forum-event
Note about the research
The report Future Proofed Decision Making: Integrating environmental and social factors into strategy, finance and operations features original research, conducted over the span of eight months (October 2011 – May 2012), that consisted of a series of qualitative interviews and discussions with Board members and other senior managers of large companies and public sector organizations. The research team interviewed 58 Chairmen, Chief Executive Officers (CEOs), Chief Finance Officers (CFOs), other Board members and senior management. The study was conducted by an experienced social research team led by Sir Robert Worcester, Founder of MORI, with assistance from Futerra Sustainability Communications.