The green sustainability conference Asia 2011, held in Malaysia last month, discussed how to address best business practices and global humanitarian concerns through sustainable social responsibility. CIMA CEO Charles Tilley (left), who spoke at the event, shares his thoughts.
Business sustainability is, quite simply, one of the most important issues in business today. The facts speak for themselves: if mankind’s use of resources continues at the current rate, by 2030 we will need the equivalent of two planets to meet our annual needs.
Moreover, pressure on resources is set to intensify. The UN has predicted that our global population will expand from the current 6.8 billion to over 9 billion by 2050.
However, scientists are confident we still have time to move towards sustainable lifestyles, and CIMA is attempting to lead the way. Our recent research project, ‘Accounting for climate change’ (shortlisted for the highly prestigious globe sustainability research award in 2010) outlined the way in which accountants can take ownership of sustainability initiatives.
In their role as information providers, accountants can be very influential; they can change mindsets and influence decision making processes. Chartered management accountants have a unique skill set, which enables them to identify and analyse key sustainability drivers and to integrate them into business strategy.
Reporting the truth
The International integrated reporting committee (IIRC), of which I am a member of the steering committee, aims to create a universally accepted framework for sustainable reporting.
Acting sustainably does not mean abandoning the drive for profit. The world is increasingly competitive and only companies generating long term profitability and cash flow will thrive.
The critical areas of the business model that organisations and boards must focus on are cost leadership, durability of the supply chain, motivating staff, and attracting and retaining customers. In each of these areas, directors of successful companies have widened their focus beyond traditional business drivers.
HSBC (whose chairman, Douglas Flint, is a prominent and active CIMA member) has sought to formalise its management of corporate sustainability. It has established policies, a reporting structure and a culture in which all employees have a role to play in protecting the environment and contributing to society.
Asda, the UK’s second largest supermarket chain, has successfully embedded sustainability into its strategy. Its finance team, helped implement their ‘zero waste to landfill’ project, which will deliver a seven figure saving by the end of this year.
Marshalls, the UK’s leading supplier of stone and concrete garden landscaping products, was the first organisation to label its entire range with carbon footprints. Its finance team, led by a CIMA commercial accountant, was instrumental in the project.
Leading sustainability research
Much of CIMA’s thought leadership work, including our recent Apocalypse H20 report, is centred around the fact that sustainability can be incorporated into future business planning to ensure that organisations will not merely survive but actually thrive in the long term.
Any good strategy requires the right corporate information to be used in the right way at the right time. This is even more essential when it comes to sustainability, and it is where CIMA members are most valuable. It is vital that organisations utilise their management accountants as business partners.
There are real questions about the pricing and utilisation of future resources and how to protect business models in the medium to long term. In this environment, management accountants will be required to assess the risks posed by diminished resources and develop long term plans to counter any problems that arise and, if necessary, seek alternative routes.
The recent financial crisis taught us that while laws and regulation have their place, professionalism within business – doing the right thing, even when no one is looking – is vital. Global business needs responsible corporate leadership, and CIMA has published a number of reports which highlight the need for a more progressive boardrooms.
It is undeniable that organisations will face a growing number of challenges. Yet it is essential that future planning has ethics, sustainability and integrity at its core.
Links
Apocalypse H20 report
Accounting for climate change report
Sustainability and ethics reports
Professionalism
Green conference