21 Jun 2012

Editor's view: the financial logic of sustainability

With most of the world’s leadership camped in the Americas, whether in Los Cabos for the G20 Summit or Brazil for the Rio+20 Earth Summit, this should be an important week for global public policy

Gathering all the world’s most important decision makers in a couple of conference centres for a week with the express purpose of discussing vital issues such as boosting growth in the global economy and acting to slowdown (maybe even reverse) climate change should be a golden opportunity.

But depressingly little of significance will come from either event. The G20 has become the go-to group for global decision-making, but its summits haven’t produced much since 2009 when the group managed to achieve a consensus on £1trn package to save the banks (and Gordon Brown managed to convince himself he had saved the world). The agreement in Mexico to stimulate European action to boost growth is welcome, but is something that European leaders should have arrived at themselves.

There is an even greater perception that the round of climate change conferences since the first Rio Earth Summit 20 years ago has produced little significant action. A pre-conference report by the United Nations made just this case, stating that of the 80 areas for action highlighted in 1992, significant progress has been made in only four.

As a result we are now 20 years further down the line towards destroying the environment. While advanced economies have done little to slow down their emissions, emerging economies have expanded and industrialised at an alarming scale and now emit a whole lot more.

But a lower key gathering in London this week highlighted how much can, and is, being done by individual businesses across the UK. The Finance for the Future Awards was a celebration of sustainable finance and a demonstration of why being good is generally good for business. Despite it being on the same night as an important England football match, the room was buzzing, packed full of people who have all taken on board the message that building a sustainable business is the best way to guarantee a successful future. Proceedings kicked off with a short message from HRH the Prince of Wales, claiming among other things that “accountants now rule the world”.

The awards underlined the financial logic of acting sustainably. As Russell Nathan, the partner leading the sustainability offering at highly commended accountancy firm HW Fisher & Co explained, their integrated carbon audit service is an easy sell once clients (and especially finance directors) get to understand the numbers. Although it depends on the size and complexity of the business and the company’s energy usage, their service will more often than not pay for itself within a year. Nathan added that it’s been interesting to see how often facilities managers have been desperate to implement a lot of the measures they recommend. But it’s only once initiatives have the support of the board – and are being championed by finance directors – that things start to happen.

Accountants may not, despite the Prince of Wales’s claims, rule the world. But they do hold the key to more businesses across the world embedding more sustainable practices and principles into their business models. And the simplest driver of doing the right thing is that it is often also the right thing for the bottom line.

Find full details of all six award winners and those highly commended here, and watch the video message from HRH the Prince of Wales, in which he describes accountants as the people who “enable an organisation to count what counts and measure what matters”.


Richard Cree is editor of economia