KUALA LUMPUR: One of the core issues facing accountants today is the advisory role they can play in helping companies report on the impact of their operations on society – in other words, integrated reporting.
Global Reporting Initiative chairman Prof Mervyn King is widely accepted as one of the champions of good corporate governance and sustainability. He wants accountants to take a lead role in the movement towards meaningful integrated reporting.
“What I expect to get out of [the WCOA] is an appreciation by the world’s leading accountants, some 6,000 of them, that they had a huge role to play in being advisors to companies to moving to integrated reporting. It’s a question of what impact operations of a company have on society and environment and financially,” King told Congress Daily.
“One can no longer just look at a company’s long term strategy but also sustainability issues which are pertinent to the business of the company. An example is SAB Miller, the second biggest brewery in the world. As part of their long term strategic planning one of their new breweries will be a large ship at sea in which they will take on ocean water and desalinate it. It’s quite extraordinary thinking simply because of the fresh water crisis as water is a critical factor in making beer.
“This is where long term goal and it shows the institutional investor that here is a board committed to the long-term plans of its company. If you think you can carry on business as usual, I’m afraid you’re not planning properly.”
CPA Australia is the first financial organisation to produce a sustainability report. Chief executive Alex Malley wants to see accountants stepping up to the plate to become key resource advisers that can influence change and good starting point would be to tackle complexity within annual reports.
“If you look at an annual report over a period of the last 20 years and you were to have locked it in a time capsule, it’s a wonderful example of where society is in this point of time,” Malley said.
“Gone is the cigar swilling chairman that sits at the front of the cover with all the power and control in the world. Now is a complex annual report that tries to factor in sustainability, non-financials and so on. We’re at that stage where we are over complicated and we need to sit back, re-think, re-adjust and simplify and respect our resources more. It’s about the leadership of that.”
King will take part in Plenary Session 3: Accounting for Sustainability: The Integrated Reporting Framework at 9am on Thursday. Malley will take part in Plenary Session 4: Accountants in the Next Decade – Embracing Change and Seizing Opportunities at 11am on Thursday.