“All is not yet quite lost, but this really is the final call”

by Carol A Adams

In a speech at St James’ Palace last month, His Royal Highness, Prince Charles said: “All is not yet quite lost, but this really is the final call.” Speaking about climate change, he noted:

having tried for so long to warn of the consequences of failing to take the necessary action soon enough, I do begin to despair of the world we are bequeathing to future generations.

Indeed, he warned about plastic pollution nearly 50 years ago.

He set up the Prince’s Accounting for Sustainability project (A4S) in 2004 and a meeting he chaired led to the establishment of the IIRC in 2010.  A4S, led by Jessica Fries, has also been instrumental in establishing the Natural Capital Coalition and the Taskforce on Climate related Financial Disclosures (TCFD).

HRH asks leaders what they are doing about sustainability issues, seeks commitments and follows up.  There is no doubt that without such influential leadership, the accounting profession and corporate leaders would be much further behind in addressing climate change and other sustainability issues.

Four years ago, he [HRH] rightly put me on the spot, highlighting that climate-related risks will have serious financial impacts, and asking what regulators were doing about them.  Mark Carney, Governor of the Bank of England

One such commitment was made by Paul Druckman, then CEO of the IIRC and Oliver Greenfield of the Green Economy Coalition to so something on multiple capitals and the SDGs.  This led to The Sustainable Development Goals, integrated thinking and the integrated report published by the IIRC and ICAS. The approach to contributing to the SDGs set out in it is being used by asset owners (eg Cbus Superannuation) and asset managers (Baillie Gifford) and is similar to the approach advocated by major companies including Paul Polman, the outgoing CEO at Unilever.

But what of incorporating sustainability in professional and university level accounting education?

HRH Prince Charles asked:

Perhaps, Ladies and Gentlemen, you would all consider making sustainability training more accessible in your organizations too?

This has been a slow process and it is not moving fast enough – something I reflected on this week as I prepared for a panel discussion on Sustainability Education with Mervyn King, former Chair of the IIRC (amongst other things), Michaela Rankin and others at the conference of the Australian Centre for Social and Environmental Accounting Research.

Standalone courses covering the material in a 1996, and subsequent 2014, book I co-authored with Rob Gray and Dave Owen and before that its predecessor with Keith Maunders were developed.  Many attracted only small numbers of students as most could not see the relevance to their future careers or passing professional body exams. (Thanks to A4S and university accounting academics, amongst others, the accounting profession is changing.  See for example this article by Bruce Cartwright, CEO of ICAS.)

More recently I have been covering topics such as: carbon accounting;  TCFD recommendations; the SDGs; critical analysis of approaches to valuing externalities; assurance of sustainability and integrated reports; business model disclosures; and, incorporating social and environmental issues into capital expenditure (CAPEX) decision making; on my course on Contemporary Issues on Accounting.  Prior to that students on this course have covered sustainability and integrated reporting in their Corporate Reporting course (information on the seminar material I set on non-financial reporting is here).  Like most accounting courses these are large classes.  Students’ prior education on CAPEX decision making often consists only of being able to do net present value calculations, despite developments in practice ( see the A4S CAPEX guide).

Textbooks contain little, if any, information on these increasingly important topics and what there is soon becomes out of date.  So, I draw on the A4S Guides along with case studies and articles published in the Sustainability Accounting, Management and Policy Journal and my own research findings.  This ensures that students can see the relevance of the topics to companies they recognise.  I familiarise myself with the rapidly increasing focus on climate change and sustainability in policy consultations by writing responses to them.

Rankings of business journals don’t help in encouraging pragmatic research on these emerging topics.   The so called ‘quality’ A* accounting journals mostly emanating from North America rarely, or never, include research which informs students how sustainability is relevant to accounting and finance professionals.

University finance allocation models can get in the way of developing cross Faculty programmes and course approval processes can be inadequate to ensure that relevant sustainability issues were covered.

These challenges must be overcome and require leadership.  An innovative example of sustainability education is provided at Leuphana University through the Leuphana semester where students work on sustainability projects across Faculties.

A4S Summit at St James’s Palace. Photo by Ian Jones

A means of developing this leadership is to encourage or require universities to define how they create value through their research and education and demonstrate how they contribute to the Sustainable Development Goals.  This requires integrated thinking, a collaborative culture and a breaking down of silo strongholds. A number of university leaders speak of the benefits of this in my report Let’s talk value: how universities create value for students, staff and society published by Advance HE.

Students – please complete this A4S survey on the integration of sustainability into accounting education https://www.surveymonkey.co.uk/r/ZBRPXWM

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