In his Accounting for Sustainability Project (A4S) annual summit forum, Prince Charles said the finance community is “absolutely critical” when it comes to enabling change towards sustainability, and ensuring its consideration in business decisions.
One week after celebrating his 70th birthday, Prince Charles said, “I fear I have now reached the point in my life where, having tried for so long to warn of the consequences of failing to take the necessary action soon enough, I do begin to despair of the world we are bequeathing to future generations.”
He added that, while “all is not yet quite lost, this really is the final call”.
In order to achieve the UN’s 17 global Sustainable Development Goals, ratified in 2015, he argued that a systematic change is required within both the economy and society.
In his speech, Prince Charles recalled a dinner with the accounting bodies where he introduced the International Integrated Reporting Council in 2010.
“The most terrifying experience, just imagine, they all sat there looking absolutely appalled!”
ICAEW chief executive Michael Izza said later that the dinner, held to celebrate ICAEW’s 125th anniversary, marked a new beginning for the institute, as it led to the creation of the Finance for the Future and the National Capital Coalition.
He told the Prince, “Your Royal Highness came to Chartered Accountants’ Hall for the dinner to deliver the speech, which challenged the accountancy profession to play its part in achieving the transformational shift in business and the economy as a whole necessary for us to live within our planetary boundaries.”
This was a “seminal moment”, he said, in the emergence of sustainability as a strategic issue for business. “I believe we have risen to that challenge.”
Meanwhile, governor of the Bank of England Mark Carney, who was also speaking at the event, pointed out that weather-related insurance losses reached a record of $140bn last year, and this year are set to be among the worst in history.
Carney explained that the demand for climate-related financial disclosure from the providers of capital has increased significantly, and supporters of the Task Force on Climate-related Financial Disclosure (TCFD) include three-quarters of the world’s globally systemic banks, eight of the top 10 global asset managers, the world’s leading pension funds and insurers, major credit rating agencies, the Big Four accounting firms, and the two dominant shareholder advisory service companies.
But he told A4S chair Jessica Fries that, in his opinion, it would be premature to enforce TCFD recommendations as a mandatory requirement.
During his speech, Carney said the Bank has found the majority of banks are starting to treat the risks from climate change like other financial risks, rather than viewing them simply as a corporate social responsibility issue.
He claimed that for some businesses, oversight of the financial risks from climate change and overall responsibility for setting the strategy, targets and risk appetite relating to these risks is beginning to be considered at the board level.
However, Carney pointed out more progress is needed as financial implications are not yet disclosed on a regular basis, while disclosures are often in multiple reports, making comparisons harder.