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As the international business community increasingly promotes the issue of sustainability in measuring an organization’s operations and results, two Farmer School accountancy faculty members are playing an essential role in this initiative.
Brian Ballou and Dan Heitger, co-directors of the Farmer School’s Center for Business Excellence (CBE), represented the American Institute of Certified Public Accountants (AICPA) at an international forum on Accounting for Sustainability convened by Britain’s Prince Charles. The forum, held Dec. 17 at St. James’s Palace in London, attracted more than 200 attendees representing international accounting bodies, regulators, corporations, and investors.
The day-long event opened with an address by the Prince that was covered widely by the British media. He argued that the current credit crunch might be exceeded by a global climate crunch, equating the two by suggesting that they both resulted from consuming at rates well in excess of investing.
“We need a new, and greater, level of international cooperation, very much including business and the accountancy profession, and, crucially, we need a much greater sense of the scale of the emergency and the action needed in the short-term,” Prince Charles stated.
After working with the AICPA for the past year on issues related to accounting for sustainability, Ballou and Heitger participated as panelists in a discussion, “Connected reporting—a mechanism for change.” The two faculty members, along with Bob Laux, Senior Director of Technical Accounting and Reporting at Microsoft, talked about the perspective of the U.S. accounting profession and Microsoft on using connected reporting to effect change in organizations’ behavior and decision making.
Established by the Prince in 2004, the Accounting for Sustainability Project has the ultimate goal of integrating sustainability into organizations' strategic planning and business reporting. The premise is that by developing a 'connected reporting framework,' organizations will incorporate long-term planning into their day-to-day operations and reporting instead of focusing on short-term results.
Stephen Green, chairman of international bank HSBC, supported the Prince’s claims, noting that HSBC has refused to provide capital in Southeast Asia to customers who do not follow sustainable practices in rainforest logging. “Green” investor David Blood commented that approximately 80 percent of a company’s value is derived from its long-term growth—not its next quarter’s earnings-per-share attainment.
Ballou and Heitger, who will represent the AICPA for the duration of the project, came away from the forum convinced that the CBE’s areas of focus align well with those of the Accounting for Sustainability Project.
“We learned that the center’s efforts to emphasize integrity, leadership, and transparency to achieve long-term business excellence are increasingly being seen by the international business community as critical for developing long-term value for organizations,” noted Ballou.
Heitger added, “There is a strong appetite for the United States to be a critical part of an international collaboration to bring environmental, social, and other stakeholder issues into the board room and executive offices to improve business and environmental sustainability for current and—more importantly—future generations.”
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