{"id":56028,"date":"2021-03-15T10:13:09","date_gmt":"2021-03-15T10:13:09","guid":{"rendered":"https:\/\/www.taxresearch.org.uk\/Blog\/?p=56028"},"modified":"2021-03-15T10:13:09","modified_gmt":"2021-03-15T10:13:09","slug":"unless-a-business-embraces-climate-change-it-is-no-longer-a-going-concern","status":"publish","type":"post","link":"https:\/\/www.taxresearch.org.uk\/Blog\/2021\/03\/15\/unless-a-business-embraces-climate-change-it-is-no-longer-a-going-concern\/","title":{"rendered":"Unless a business embraces climate change it is no longer a going concern"},"content":{"rendered":"

Two articles in the FT this morning make clear that the issue of climate change and accounting is not going away. This is the headline of the first:<\/a><\/p>\n

\"\"<\/p>\n

And this the headline of the second<\/a>:<\/p>\n

\"\"<\/p>\n

The articles appear under different headings, but the message is the same. It is well said in the second:<\/p>\n

The expected launch this year of a sustainability standards board by the IFRS Foundation, which oversees international accounting standards, should make ESG reporting more consistent. But for now investors are suffering from a shortage of meaningful data by which they can track progress and dissuade executives from fudging the numbers if they miss their targets<\/p><\/blockquote>\n

The message is simple, and is that accounting is very far behind the needs of society, investors and business on this issue.<\/p>\n

But, worse, there is an assumption within these articles that now that the International Financial Reporting Standards Foundation has decided that it will set up a Sustainability Standards Board<\/a>, despite objections from many readers of this blog<\/a> (who between them provided sixteen per cent if the comments sent on this issue last December<\/a>) then this is the way that we must go.<\/p>\n

This proposal cannot answer the issue being raised. The IFRS proposal is to create sustainability standards outside the accounting standards framework. That is why they want a new, separate, board. By definition this is wrong. This perpetuates the myth that climate change is peripheral, and an externality as far as business is concerned.<\/p>\n

The IFRS view would seem to be that financial reporting and sustainability reporting are unrelated issues:<\/p>\n

\"\"<\/p>\n

That is not true. Climate change is at the very core of business concern now. It is all that business should be about because unless a business can now embrace climate concerns it is no longer a going concern, and determining whether a company is a going concern is the core issue within financial reporting. This means that the required view is this:<\/p>\n

\"\"<\/p>\n

Sustainability reporting should actually encompass financial reporting and not the other way round.<\/p>\n

Sustainable cost accounting<\/a>, which I propose, does that. Only if we put climate change very firmly on the balance sheet will we get the change we really need in accounting.<\/p>\n

I am pleased to say that I am reporting this opinion at a seminar at the Institute of Chartered Accountants in England and Wales to discuss this issue next week.<\/p>\n","protected":false},"excerpt":{"rendered":"

Two articles in the FT this morning make clear that the issue of climate change and accounting is not going away. This is the headline
 Read the full article…<\/em><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[67,81,176,35,108,74,178],"tags":[],"class_list":["post-56028","post","type-post","status-publish","format-standard","hentry","category-accountancy","category-auditing","category-corporate-accountability-network","category-economics","category-environment","category-green-new-deal","category-sustainable-cost-accounting"],"_links":{"self":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/56028","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/comments?post=56028"}],"version-history":[{"count":0,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/56028\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/media?parent=56028"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/categories?post=56028"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/tags?post=56028"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}