Corporate sector must change with the times
Accounting professionals play an increasingly important role in helping companies adapt to the green economy. It is a new global system that promotes sustainability and addresses issues such as climate change, biodiversity and scarcity of fuel, water and food.
Rachel Jackson, head of sustainability of the Association of Chartered Certified Accountants (ACCA), says the role of the accountant is evolving in a low-carbon economy, where businesses adapt their operations from risk identification and reporting, to strategy development.
'They are contributing to greening economic sectors and managing natural capital. The data collection and audit skills of accountants and assurance practitioners fit very well with the new mandate,' Jackson says. '[They] can also help promote green governance by developing new metrics to shape the way businesses are assessed and reported.'
The changing skills and knowledge required from accounting professionals is one of the topics to be explored at the ACCA Green Economy Roundtable-Hong Kong, held next Wednesday and hosted by ACCA and the global conservation body, WWF. This year's theme will be: 'Is Corporate Hong Kong Ready for the Green Economy?'.
The roundtable is one of a series to identify the impacts of the green economy on the corporate sector in Asia. ACCA roundtables have been held in Jakarta and Singapore. At next week's event experts will discuss issues such as business opportunities in the new economy and changes in investment practices. Jackson will be one of the speakers, along with William Yu, WWF Hong Kong's head of climate programme; Mara Chiorean, country director of nonprofit group CSR Asia; Jeanne Ng, director, CLP's group environmental affairs; Philippe Lacamp, head of sustainable development, John Swire & Sons (HK); and Hugh Gozzard, principal of enterprise risk services at Deloitte Touche Tohmatsu.
Jackson says there isn't a single formula of success in the way a business adapts. Transformation depends on commitment from the corporate sector and in particular the senior executives, pressure from stakeholders, legislation, the availability of guidance and peer examples, and clear business cases of risks. Specialist skills and knowledge are also necessary. She adds that many companies are adapting on a partial basis rather than a company-wide basis.
There are bound to be challenges along the way. Ensuring funding and expertise to facilitate the changes, sourcing new raw materials, creating new governance structures, developing an integrated strategy and reporting model, and changing internal processes such as risk profiling are some of the issues to be anticipated. Corporations will also be expected to implement the increasing demands made by government and international agreements, at a time when governments seek to change behaviour by developing policies to promote practices such as carbon budgeting and sustainable procurement.
'The opportunity to the corporate sector is vast, in terms of efficiency, market share and investment,' Jackson says. 'And don't forget the corporate activity and business-led campaigns in the build-up to Rio+20 [UN Conference for Sustainable Development have] shown us that companies are willing to change and lead the way in the absence of globally agreed or solid national regulation or policy.'
Yu says governments play a critical role in facilitating the transition to a green economy, through establishing sound regulatory frameworks to promote investment and initiatives by the private sector and civil society. According priority to government investment and spending in areas that stimulate the greening of the economy is another important enabling factor based on the experience of the UN, he adds.
'Apart from boosting economic growth, under the Tripartite Partnership, the government, business sector and third sector can combine their resources to address socioeconomic issues, ranging from employment security, to climate change,' Yu says. 'In the Asia-Pacific region alone, 50 million green jobs are expected by 2025, according to Asia Business Council.'