Sustainability, a term once associated with idealistic corporate citizenship, has evolved into a complex and often contentious issue. It's a double-edged sword, simultaneously hailed as a crucial global priority and dismissed as a passing trend.
In the early days of my career, sustainability was a niche concept, championed by a few forward-thinking organisations. The idea was to integrate environmental and social considerations into business practices, recognising the broader impact of corporate actions. However, this vision often clashed with the prevailing focus on short-term financial performance.
The Paris Agreement marked a significant turning point, elevating climate change to the forefront of global discourse. Yet, even then, the financial industry remained largely indifferent. It was the oil and gas sector, ironically, that seemed to grasp the gravity of the situation.
As sustainability gained momentum, it became a trendy buzzword, often used to greenwash corporate reputations. While well-intentioned, many sustainability initiatives lacked substance and failed to deliver meaningful change. The challenge was to move beyond superficial gestures and embrace a truly transformative approach.
One of the most frustrating aspects of the sustainability debate is its politicisation. Climate science, a field grounded in rigorous research and empirical evidence, has been subjected to ideological attacks. The 1.5-degree Celsius target, a scientifically determined threshold, has been dismissed by some as an arbitrary political goal.
It's imperative to recognise that sustainability is not a partisan issue. It's a matter of human survival and planetary health. By prioritising short-term political gains over long-term environmental and social well-being, we risk jeopardising the future for generations to come.
To truly address the sustainability crisis, we must integrate ecological principles into the core of our economic systems. This requires a fundamental shift in our thinking, from a linear, extractive model to a circular, regenerative one.
By focusing on carbon emissions, a key driver of climate change, we can make significant progress. The financial industry, with its vast resources and influence, has a crucial role to play in accelerating the transition to a low-carbon economy. By valuing carbon and incorporating climate risk into investment decisions, financial institutions can drive systemic change.
While sustainability may be a complex and multifaceted issue, it's essential to start with concrete actions. By measuring and reducing carbon footprints, investing in renewable energy, and promoting sustainable practices throughout the value chain, we can make a tangible difference.
Now, then. The steps to get there seem oh so daunting. But that is simply because we are still not combining, a clear and direct approach to get there. Methodologies, from corporate sustainability disclosure regimes, listing requirements, financial product labelling regulations have now been thrown into the hubbub of busy voluntary standards set eons ago. Throughout all this, the financial accountants have been circling. They still don’t yet quite get it. Their approach, they thought, was the century old, robust approach to getting stuff done.
It’s time now for the proverbial (sustainability) sword of Damocles to fall. Lets cut through this division. Accountants, regulators, and standard authors, need to unite, put down their differences and realise this is the new dawn of sustainability accounting. Or what may soon just be called in years to come, the new accounting.