The accountants who can save the world

Number-crunchers have a key role in sustainable development. By Roger Trapp
Click to follow
Accountants have a valuable role to play in helping businesses achieve sustainable development, according to a report published by the Chartered Association of Certified Accountants this week.

Calling on the profession to develop new techniques to assist in the search for sustainability, the report's authors, Jan Bebbington of Dundee University and Ian Thomson of Heriot-Watt University, say: "Accountants have influence over how organisations develop. They are likely to inhibit organisations' pursuit of sustainability unless they are well informed on the topic and supportive of their organisation's attempt to move in that direction."

However, they warn that this will involve "a radical shift in thinking and such moves are likely to be in conflict with accounting which focuses on short-term financial criteria."

The whole point of sustainability, as Ms Bebbington and Mr Thomson point out, is to create a socially and environmentally just world where present needs are met in such a way that future generations are not deprived. "The Earth Summit in Rio de Janeiro identified sustainable development as the way to deal with the environmental crisis," they say.

But it is one thing to accept this and clearly quite another to actually make it happen in business - especially in the Anglo-Saxon style of organisation where it is widely perceived that short-term financial considerations are all-important.

The report's authors claim that their research, based on interviews with environment managers and accountants in a range of British and Continental European organisations, shows that businesses are aware of their duty to become involved in sustainable development, but do not know what to do. They urgently need to ascertain the extent of the change that will be required and the time scale, they add.

This task is given special urgency because a European Union programme is suggesting that accounting practice be redefined to ensure that the use and consumption of environmental resources are accounted for.

This is a radical option, which Ms Bebbington and Mr Thomson look at in some detail. They assume that taking this to the point of accounting for the consumption and use of environmental resources in the full costs of production would then be followed through in market prices.

But they also consider the sustainable cost concept. This, they say, has two advantages. First, the sustainable cost calculation does not require definition of what a sustainable position looks like. Instead, it attempts to "stop the clock" and look at the cost of maintaining the environmental status quo. Second, it uses some conventional accounting techniques and obtaining current-cost information is comparatively straightforward.

Even this approach horrified some of those interviewed. Nevertheless, the authors recommend that it be given further investigation. "Certainly from our perspective it appears attractive because of its ability to speak the language of business while at the same time delivering an answer that accords with a 'strong' sustainability position."

Looking for credit card or current account deals? Search here