29 February 2008
Accountants have been 'part of the problem' in contributing to climate change and now need to become part of the solution, Sir Michael Peat, the Prince of Wales' private secretary has warned.
Addressing a CIPFA sustainability conference on February 27, Peat said accountants had 'failed to develop the new accounting systems and techniques needed to address the sustainability revolution'.
They should now work with local government to embed sustainability, he said.
'The accountancy profession's failure to point out that mankind is living off the world's capital is the greatest accounting failure ever seen,' Peat told delegates.
'Most policy on climate change and sustainability is just skin deep and does not get much further than the boardroom or corporate departments, whilst everyone else just gets on with business as usual.'
Peat called on the public sector to strike a better balance between longer-term sustainability requirements and the short-term need to ensure best value for money.
And he warned that 'organisations that don't get the balance right will not survive and prosper'. He added: 'Embedding sustainability needs to become best practice and not something that is just talked about in the boardroom.'
All organisations needed to have a connected reporting framework to ensure sustainability performance was reported more clearly, concisely and consistently. 'If it is not measured, it is not done,' he said.
Peat called on all organisations to look at their decision-making processes and policies that require senior management sign-off and ensure that sustainability factors were clearly set out. 'Are you giving equal weight to sustainability as to general financial factors?' he asked.
He said organisations must make sure line managers had the information they needed to take sustainability factors into account.
Also speaking at the conference, Jonathon Porritt, founder director of think-tank Forum for the Future, told local authorities to act now on climate change rather than wait for permission from central government.
'Those of you who think we have decades to sort this out are living in the land of illusion,' he said. 'Many local authorities are beginning to realise that they must not wait around for permission from government to do this, but it is a slow and very stodgy process.'
He called for some 'real creativity and innovative action' in financial accounting to address sustainability.
Porritt also said that the Department for Environment, Food and Rural Affairs' sustainability targets meant that no new Private Finance Initiative project should now be given the go-ahead if it ignored sustainability.
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