One of the UK’s foremost figures in accounting for
sustainability has taken on a new challenge leading an
environmental data company.
Paul Druckman is a past president of the
Institute of Chartered Accountants in England and Wales, chairman
of the Federation of European Accountants sustainability policy
group and chairman of the executive board of the Prince of Wales
Accounting for Sustainability project.
Adding to his raft of positions, he recently
became chairman of environmental data company Trucost. Trucost
maintains a data base with information on 4,500 global companies,
including the world’s largest.
There are two sides to the business. One is
selling the data and services based on the data to investors; the
other is providing the data to companies so they can see their own
environmental footprints and impacts.
Druckman said he believes Trucost occupies a
niche spot in the market.
“There are no other organisations doing what
we do,” he told The Accountant. “There are other
organisations that provide data, but it is not the same concept
because we are maintaining, validating, standardising and
monetising the data that we have.
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“We have the data and the model to have a
complete environmental footprint, it’s more than just about carbon.
Some companies are doing different pieces of that, but not the
overall complete set.”
To date, much of Trucost’s emphasis
has been on the investor side of the business, for example
informing investors who want to know if a fund is low carbon.
“[Trucost can find] the best performing
companies or the worst performing companies in terms of their
environmental impact,” Druckman said. “If you want to build a low
carbon fund, how do you know which companies are low carbon? It may
not be that you only invest in the lowest, but at least you will
see the ranking and make an informed decision.”
The company is making inroads into the public
sector as well as the corporate sector.
“We have contracts on the supply chain side
with local authorities and health care organisations,” Druckman
“Some of them have incentives to do that
through government schemes and incentives. Others just want to be
Druckman’s role at Trucost combines the three
areas of specialisation he has developed during the past 10 years –
technology, sustainability and the accounting profession.
First, Trucost is essentially a technology
solution. Second, its provision of environmental data hits the
sustainability mark. Finally, Trucost converts non-financial
environmental information into financial information.
“Trucost has the ability to make the
accounting profession understand what all this is about because of
the quantitative nature of the data,” Druckman explained.
Druckman said this financial data is a raw
material that businesses can use to build sustainability issues
into financial models.
“It has always been possible [to embed
sustainability into investment decision making], but it is still a
big learning curve for an accountant,” Druckman added.
“Accountants in normal practice must start
looking at these externalities rather than just the financial
return because they need to understand that the world is changing
and there are other pressures on the behaviour of a company that
will affect its value, and not just in an altruistic sense. Now
here is something they can actually grab hold of and use with a
Druckman said one opportunity for Trucost is
to move beyond being a separate data source and become embedded in
what other organisations do.
“Accounting software houses could have Trucost
environmental data associated with their accounting systems,”
“Going back to the accounting side of it,
there is no reason why management accounts should not now include
an environmental footprint.”