9 April 2020 — News
The ongoing coronavirus pandemic demonstrates that we urgently need to make our societies more resilient and transition to more sustainable economies. Now is the time to draw lessons from what is happening, especially as environmental damage makes such crises more likely to occur.
The accountancy profession is eager to contribute to the European Commission (EC)’s initiative to renew its Sustainable Finance Strategy. Our response to the 8 April consultation will draw on the field experience of the 1 million professional accountants we represent. Our expertise can help the EC deliver on its Green Deal policy objectives, primarily in corporate governance, natural capital accounting, corporate reporting and SMEs’ support.
The EU Green Deal’s ambitions require a more fundamental transformation of how the financial and corporate sectors operate. ‘10 ideas to make corporate governance the driver of a sustainable economy’ (June 2019) already proposed actions to secure sustainability into the corporate governance framework .
Fighting short termism has proven crucial in the ongoing COVID-19 outbreak; it’s easier to prevent than to repair. Corporate boards need to prioritise long-term objectives and consider their entire stakeholders’ network. They need to manage reputational risk, business performance and effective sustainability.
Natural capital accounting can help ensure that companies reduce their environmental risks. Assessing best practices in the EU and globally can help its progress. Accountants are well-placed to measure companies’ impact and dependencies on natural resources, asses their cost and feed these into business performance management and decision-making.
High-quality, relevant and reliable data can help funding flow to sustainable investments. We are responding to the consultation to review the Non-Financial Reporting Directive (NFRD) based on the 5 points we stressed in our call to action to improve the NFRD in Oct 2019.
Businesses, and especially SMEs, need support in moving towards sustainability. Access to finance remains essential for European SMEs, also in taking up sustainable finance tools. Innovating and risk taking can be an important part of this, so we have started a publication series on how accountants can help SMEs managing their risks.
Please keep an eye out for further details in our consultation response. We also plan to shortly publish our views on sustainability and the coronavirus crisis. Sign up for our Sustainable Finance Update to remain up to date on the relevant EU policy developments.