Measuring the Incalculable; Valuing the Intangible!

It's good that a lot of sustainability and environmental reporting is becoming the norm. And it makes a lot of sense economically - socially responsible workers want to work at places that do this kind of reporting and customers are becoming increasingly environmentally aware (well, at least on a superficial level). So, by adopting this level of reporting and these systems, businesses are maximising their staff recruitment appeal, and customer base. At the same time adding to corporate governance and management qualities.

Adopt sustainability reporting

By EUGENE MAHALINGAM

AS the largest professional accountancy body in the world, the Association of Chartered Certified Accountants (ACCA) strives to achieve and promote the highest professional, ethical and governance standards.

And with those standards, it endeavours to be a global leader in the accounting profession and to preserve public interest.

According to ACCA chief executive Allen Blewitt, one of those interests involves the ACCA's role in promoting transparency through sustainability reporting and disclosure as its corporate responsibility (CR) initiative.

“Our initiatives in (global) sustainability reporting go back nearly 20 years. We were embracing them when they were quite unpopular and people thought we were mad,” Blewitt told StarBiz.

“But, with climate change, carbon reporting and other mainstream issues, all the work we have done for many years is finally starting to pay off,” he said.

On why companies should adopt sustainability reporting, Blewitt said: “Companies have a responsibility to their shareholders and employees to do so.

“It also provides an avenue for companies to improve their brand value and be viewed as good corporate citizens.”

However, internal factors are not the only reasons why companies should adopt sustainable reporting practices, Blewitt said.

“Consumers are becoming more educated and increasingly discerning about the environment and the carbon impact on the food and drinks they consume.

“They will start to determine company behaviour and have an impact on their success and financial profitability. As consumers add pressure on them, companies would have to implement sustainability reporting practices,” he added.

According to Blewitt, the increase in education and sophistication of the consumer base has already begun to have an impact on companies worldwide.

“Mattel learnt a valuable lesson when it had to recall toys that were not suitable for children.

“Nike, which also got into trouble in terms of its labour practices in producing sports shoes in Indonesia. Consumers forced the company to change its practice because they stopped buying,” he said, adding that CR was beginning to have an impact a company's recruiting prowess.

“One of the biggest challenges facing employers today is the ability to attract and retain good workers. From our research, the best employees usually want to work for socially-responsible companies.

“University graduates are also querying human resources departments of companies on what they (the companies) are doing in terms of CR,” Blewitt added.

According to ACCA Asean and Australasia director Tay Kay Luan, this is where sustainable reporting and, ultimately, the ACCA comes in.

“Reporting means transparency, transparency means communication and communication means people are well informed,” he said.

Clear and concise reporting would also boost companies' appeal to potential investors, Tay said, adding: “With reporting intelligent investors and consumers can compare (companies) and choose which one they would support and receive their loyalty.

“As a company chairman or CEO, what you want most are loyal customers. And because you don’t have to market, they stay with you. Loyal customers will become loyal because of sustainability reporting.”

http://biz.thestar.com.my/news/story.asp?file=/2008/3/1/business/20079286&sec=business