Money seems to be the only variable in this world. Beautifully summed up by this Dilbert Comic.
Topper: I reject your idea because the costs are high.
Dilbert: In a one-variable world, you would be a genius.
Topper: Thank you.
Dilbert: I meant every word of it.
Have you ever seen a Chartered Accountant offer a return on investment on an environmental project instead of a tax return, audit financial statements instead of sustainability reports, and offer advisory services to clients based on what is good for the people and the planet?
What about environmental and social costs and related variables? These are mostly hidden unless deliberately shown in the form of CSR (Corporate Social Responsibility) or ESG (Environmental Social and Governance) disclosures.
I attended a webinar once where I raised this question – “When do you see CSR getting integrated into financial reporting?” Their answer – “Regional characteristics and resource limitations play into this greatly. As you may be well aware, Integrated Reporting (IR) is heavily deployed in South Africa and in neighboring/partner countries. Similarly, countries where stock exchanges require ESG disclosure, are more likely to produce integrated reports. Here in the U.S., many of our pioneering IR companies came into this space for the need to share resources with the financial/accounting teams when producing reports. Finally, we’re starting to see a great deal of interest for these types of reports blooming in the U.S.”
65% of Canadian institutional participants said that they often or always consider environmental and social issues, and 95% of them often or always consider governance issues for all investments.
In 2013, research by the India Responsible Investment Working Group, encompassing large corporates as well as Small and Medium Enterprises (SMEs), more than 50% businesses are now prepared to provide ESG information to investors / other stakeholders.
The big players are considering these costs. Is your business following suit?
Increasing demand is the reflection of how the new technology was able to reach to larger masses by being more affordable and accessible. It’s chaotic. Every small or large business is clinging on to whatever it can to win this battle. The new technology now dominates the market. It changes the course of day-to-day business activities. All eyes are on this innovation and everyone in the business is breathing it. A new infrastructure replaces the old one. It’s a new market! It’s a shamble! In an effort towards a sustainable world, the companies also have to struggle to keep up and sustain themselves. Those who adapt and turn issues into opportunities will survive. Resources really are going to run out someday. Sustaining innovation on the other hand does not shock the market behavior by a sudden entry but rather evolves in digestible steps. Sustaining technologies are improved products.
