Can accountants save the planet?

The heroes in pinstripe.

One striking thing that happened at the 2012 UN Earth Summit in Rio was hearing that it was the accountants that will save the planet. It also resonated in one of the most important themes I heard at Rio: valuation, measurement and disclosure. This speaks to the huge role accountants have to play in the creation of a more sustainable world - and it was great to see the profession at Rio in the form of IIRC, the Prince of Wales’ Accounting for Sustainability Project and ICAEW.

This theme was one of a number of that buzzed at the summit and side events including: natural capital; the discussions around articulating a set of sustainable development goals (SDGs); and the much more prominent role business had this time (so different from 1992). There also seemed to be a tacit question floating around about what the role of governments is; for this was not the world uniting in common cause for a higher purpose, this was c.190 separate nations gathering with very different agendas and interests.

These governments are struggling to address global issues that require them to aspire to an international public interest and yield a certain amount of sovereignty. It requires not compromise, a descent to the lowest common denominator, which is what we got, but consensus. This involves giving up some national interest for a greater good. Are the institutions of government and international governance capable of delivering that? The public doesn’t think so. We are witnessing a collapse in public trust in such institutions.  Just look at the latest Edelman Trust report where the most trusted of our institutions commands only 50 per cent of public trust. Respected commentators such as Naill Fergusson and Diane Coyle have written and spoken convincingly on the need for institutions that are fit for purpose.

But the success of any sustainable programme is predicated on successful measurement, valuation and disclosure. If we cannot measure the impact organisations are having on the natural environment then we certainly won’t be able to do anything about it. We need to value that impact not to put a price on nature in order to put it up for sale, but to show its value to stop it being economically invisible. This is the language of business and to engage business we need to speak its language. Reporting is important not just as disclosure to stakeholders and shareholders but, more importantly, in as management information to enable managers to make informed decisions. These are the functions that I would argue are the domain of accountants.

The management and public accounts create an image of the business that shapes perception and decision-making. Like any representation, these are not an unimpeded view; they include certain information and leave other things out, presenting a certain reality. So including other information, about environmental impact for example, will drive different understanding and a new reality and other decisions. That’s why accountants are important.

Richard Spencer is the Head of Sustainability for ICAEW

Accountants are important. Photograph: Getty Images

Richard Spencer, Head of Sustainability ICAEW

Photo: Getty
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What Jeremy Corbyn gets right about the single market

Technically, you can be outside the EU but inside the single market. Philosophically, you're still in the EU. 

I’ve been trying to work out what bothers me about the response to Jeremy Corbyn’s interview on the Andrew Marr programme.

What bothers me about Corbyn’s interview is obvious: the use of the phrase “wholesale importation” to describe people coming from Eastern Europe to the United Kingdom makes them sound like boxes of sugar rather than people. Adding to that, by suggesting that this “importation” had “destroy[ed] conditions”, rather than laying the blame on Britain’s under-enforced and under-regulated labour market, his words were more appropriate to a politician who believes that immigrants are objects to be scapegoated, not people to be served. (Though perhaps that is appropriate for the leader of the Labour Party if recent history is any guide.)

But I’m bothered, too, by the reaction to another part of his interview, in which the Labour leader said that Britain must leave the single market as it leaves the European Union. The response to this, which is technically correct, has been to attack Corbyn as Liechtenstein, Switzerland, Norway and Iceland are members of the single market but not the European Union.

In my view, leaving the single market will make Britain poorer in the short and long term, will immediately render much of Labour’s 2017 manifesto moot and will, in the long run, be a far bigger victory for right-wing politics than any mere election. Corbyn’s view, that the benefits of freeing a British government from the rules of the single market will outweigh the costs, doesn’t seem very likely to me. So why do I feel so uneasy about the claim that you can be a member of the single market and not the European Union?

I think it’s because the difficult truth is that these countries are, de facto, in the European Union in any meaningful sense. By any estimation, the three pillars of Britain’s “Out” vote were, firstly, control over Britain’s borders, aka the end of the free movement of people, secondly, more money for the public realm aka £350m a week for the NHS, and thirdly control over Britain’s own laws. It’s hard to see how, if the United Kingdom continues to be subject to the free movement of people, continues to pay large sums towards the European Union, and continues to have its laws set elsewhere, we have “honoured the referendum result”.

None of which changes my view that leaving the single market would be a catastrophe for the United Kingdom. But retaining Britain’s single market membership starts with making the argument for single market membership, not hiding behind rhetorical tricks about whether or not single market membership was on the ballot last June, when it quite clearly was. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to domestic and global politics.