Transforming Finance and Accounting:
Meeting the Challenges of the Next Decade
“There was a time when we could say that there was either a complete lack of knowledge, or at least room for doubt, about the consequences for our planet of our actions.
That time has gone.
We now know all too clearly what we are actually doing and that we need to do something about it urgently. Better accounting must be part of that process.”
His Royal Highness The Prince of Wales
On 11th December 2014, global leaders from the finance and accounting community gathered in London at the A4S Summit to define the role they will play to move business and the economy onto a sustainable pathway.
The Summit, hosted by HRH The Prince of Wales, celebrated progress made in the decade since His Royal Highness established A4S, while setting out the transformative steps that need to be taken over the coming decade by the finance leaders of today and tomorrow.
At the Summit HRH The Prince of Wales delivered a challenge to the accountancy profession to convince their peers of the value of accounting for sustainability in his closing speech.
As part of event marking the ten years since His Royal Highness The Prince of Wales set up A4S, a film was produced which shows the work and role of A4S though the words of people involved in the project.
At the reception held the night before the scene was set as guests watched ‘Costing the Earth’ a film, starring Stephen Fry and Al Murray, which was produced for the launch of A4S and showed the importance of accounting for natural and social capital.
The Summit explored the macro sustainability trends impacting business and the bottom line and the need for the finance and accounting community to respond. Presentations and panel sessions discussed the practical actions that this community can and are taking, led by members of the A4S CFO Leadership Network. Finally, guests were set a challenge for the future by HRH The Prince of Wales. Video footage from the Forum is below.
The need for transformation: drivers of change
Rolf-Dieter Schwalb, CFO of Royal DSM explored the links between global macro sustainability trends and the bottom line for business. Rolf-Dieter spoke about the transformation DSM undertook over the last decade, moving away from fossil fuel based petro chemical businesses to focus on health, nutrition and materials sciences as the main pillars of the business.
Review the slides from Rolf-Dieter Schwalb’s presentation.
Why finance and accounting?
This session opened with a film about the role of finance and accounting community in transforming finance, and shows the work and role of A4S though the voices of the people involved in the project.
How have perspectives from the accounting community changed?
This session looked at how the attitudes skills and motivations of the global finance and accounting community have changed over the past ten years. Research undertaken by members of the A4S Accounting Bodies Network (ABN) highlighted that in 2003, 63% of the accountants in practice considered environmental issues to be largely irrelevant to the majority of their clients, whereas in 2014, 45% of management accountants now report environmental and social information to decision makers.
Sustainability and Business: The Next Ten Years looked at the attitudes of students and young people entering the profession towards accounting for sustainability. Redressing the Balance gathered the views of the accounting community about attitudes in business today about driving sustainable strategies.
Rising to the challenge
Andrew Bonfield, Finance Director, National Grid, spoke about why he feels CFOs have a crucial role to play in embedding sustainability into their organisation’s strategy and operations. Andrew highlighted that this is not about CSR; it is about delivering the bottom line that shareholders expect, and building businesses that will be here for the longer term.
Practical actions – tools and techniques
A4S showed the second part of a film commissioned for the tenth anniversary which explored the evolution of sustainable accounting and reporting.
The practical actions being taken by the finance community were then explored in more detail through two panel discussions based on the areas of focus of the A4S CFO Leadership Network activities in 2014.
Hardwiring into capital expenditure and infrastructure spend
A panel discussion that focused on the importance and commercial benefits of embedding sustainability into capital investment appraisal.
Panel Chair: Susan Davy, Finance and Regulatory Director, South West Water
Panel: Gregor Alexander, Finance Director, SSE; Richard Mayfield, CFO, Walmart EMEA
Engaging with investors
A panel discussion that looked at how companies engage with their investors on sustainability issues and the drivers of long-term shareholder value.
Panel Chair: Emma Howard Boyd, Member of Executive Board, Accounting for Sustainability
Panel: John Rogers, CFO, Sainsbury’s; Roger Seabrook, VP of Investor Relations, Unilever and David Blood, Co-Founder, Generation Investment Management
HRH The Prince of Wales spoke about the need for 21st century tools to meet 21st century challenges and that business as usual is unsustainable and resilient business models will be the ones that succeed. He concluded by challenging the audience and the wider accountancy community:
“If every one of you here in the room today manages to convince just five others to start accounting for sustainability, and then each one of them engages another five each year, in five years’ time we could reach all of the three million accountants in the world!
However, I hate to tell you that for obvious reasons five years is too long – so each of you needs to rush out and convince ten! And then accountants really will be helping to save the world!”
Click here to read the full text of the speech