There is the danger of a new profession arising with a similar skill set to accountants if the existing accounting profession does not embrace a responsibility regarding sustainability practices within business, according to a European sustainability expert.
Paul Druckman is the Federation of European Accountants (Fédération des Experts comptables Européens – FEE) sustainability policy group chair. He also chairs the executive board of the Prince of Wales Accounting for Sustainability Forum and is a past president of the Institute of Chartered Accountants in England and Wales.
Druckman said a new policy statement from FEE, Contribution of the Accountancy Profession, tries to show a lot of businesses are reporting on sustainability and embedding it into their processes, but without necessarily involving the finance professional.
“And the finance professional, frankly, has not been great at putting themselves forward either, in this role, and this has to stop,” Druckman said.
“The tools that are needed for understanding the non-financial information and the strategies that go with the governance, the processes and the controls are very much the skills set of the finance professional.”
Druckman warned that if the accounting profession does not step up to take the role, a complementary skill set will be created “which just doesn’t make any sense”.
“I think the accountants have not recognised that they do have a significant role to play yet,” he said.
Druckman predicted any new profession is likely to struggle because it will not have the underlying skill set. It would be in danger of being corporate social responsibility experts rather than business professionals.
“That is disturbing as far as I am concerned,” he said.
There are commercial advantages pushing the sustainability drive, Druckman added.
“We are in difficult economic times, but I think a significant number of businesses are now interested in the whole area. That might be altruistic, although it is unlikely. It is more likely to be based on supply chain pressure or compliance-type pressure. Or it may be it is commercially advantageous, either cost cutting or revenue generating.
“I think a significant number of businesses are starting to see that. They are not all very sure how to do it, but I think it is on the radar, if not in the action plan.”
Druckman said coming events, such as the United Nations climate change conference in Copenhagen in December, as well as administration changes in key jurisdictions such as the US and EU could lead to more regulation, although he is not sure this is the right answer.
“If we are not careful it will just be box ticking and not embedded,” he warned.
“If you take [the US Sarbanes-Oxley Act] as the classic example, I am not sure that has added anything to business. What we are looking at here is adding to business.
“We want this not to be something that is a tick box and a knee jerk, but is actually something that is seen to be useful and is moving business on.”
Druckman said it is up to businesses to move now and improve performance otherwise it will be enforced on them.
Contribution of the Accountancy Profession was one of four policy papers released by FEE’s sustainability team this month. The others were: Cost Internationalisation; Non-Financial Information; and Multiple-Stakeholders: The Essence of Multidisciplinary Teams.
FEE’s sustainability efforts are managed by two separate committees.
The 18-person sustainability policy group, which includes three technical advisers, is responsible for setting policy and strategy for the sustainability efforts of FEE and its members.
The 20-person sustainability working party is chaired by Nancy Kamp-Roelands, who is also a CPA working for Ernst & Young in the Netherlands. The working party is where consultation responses are done and papers are written. It is comprised of technical experts – key sustainability people from different European nations.
The two work very closely together and there is some overlap between members.
One of the main strategies of the groups is to embed sustainability into the other groups within FEE. They have held presentations and discussions with groups including the audit, financial reporting and public sector working parties.
Other projects for 2009 are being finalised. These will be mainly roundtables and call to action approaches rather than major pieces of work.