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A speech by HRH The Prince of Wales at The Prince's Accounting for Sustainability Project's Annual Forum 2014

Published on 11th December 2014

Ladies and Gentlemen, I am really delighted to see so many business and finance leaders here today and to have been able to hear some of your fascinating discussions. I couldn't unfortunately look round to see how many held up red cards but anyway I found the discussions enormously rewarding. Needless to say, I really am immensely grateful to you all for taking the time to join this gathering and for agreeing to subject yourselves to the A4S treatment which, I hate to tell you, ends with some shock treatment from me! 

So, I would like to take a few minutes of your time, if I may, to reiterate why our future, and that of so many people around the world, is in your hands.  

Those of you who have heard my views at previous A4S events will know how vital I think it is that we properly account for the real value of all our economic activities.  It is quite simply an essential skill if mankind is to thrive within the constraints of an increasingly crowded planet.  Finance and accounting professionals provide, as it were, the dashboard to set the direction and speed of travel of our organizations and economies, the engine to translate those instructions into action and the steering to avoid the worst of the potholes along the road!  My former Principal Private Secretary, Sir Michael Peat a fourth generation accountant convinced me many years ago that not much in this world happens without accountants! 

Indeed, it was over ten years ago that following a conversation with the then Chairman of the National Audit Office, I asked Sir Michael to follow up in order to see whether there might not be more that could be done to account for sustainability.  As a profession with such strong ethics, and with the link between sustainability and financial success clear even at that time, it was evident that the way accounts were prepared and decisions taken was a barrier to achieving the right results right for the bottom line, right for society and right for the environment which provides our life-support at the end of the day. 

As I said at the time, we need 21st Century tools to address 21st Century challenges.  With that challenge, my Accounting for Sustainability Project was borne. 

Now at the time, I did not begin to hope that the Project could possibly have the impact that it has had over the past decade.  And that is down to the enormous commitment, support and energy of many of you here today. 

I wanted A4S if possible to work with the finance, accounting and investment community to dispel the idea that there is necessarily a choice between making money on the one hand and “doing the right thing” on the other.  On the contrary, once it is recognized that “business as usual” is unsustainable it follows naturally that those organizations which start to develop resilient business models will be the ones which succeed.  Well, to help this process along, I could see that accountants would need to develop the practical tools and approaches required to design and build sustainable organizations, and ultimately the sustainable economy we so desperately need.  And I am delighted with what has been achieved so far... 

For instance, my C.F.O. Leadership Network has started to transform the tools and techniques used for decision-making, from capital expenditure to managing risk. 

The Natural Capital Coalition has started to find ways to reflect the true value of Nature in accounting and to do so in a way that can be adopted around the world. 

Integrated reporting is already transforming the way companies report to their investors, including in Japan, India, Malaysia, Singapore and Brazil, as well, of course, in South Africa and here in the United Kingdom where the revolution began.  It is now becoming the global norm and I strongly recommend that you catch this particular wave while the momentum is still building! 

The members of my Accounting Bodies Network have also started to transform the way they train the accountants of the future so that all of these approaches are applied from the start, rather than having to be learnt later in their careers. 

I must say, I am enormously heartened that all the hard work over the past ten years seems to be delivering real results and real progress and I would like to thank all of you here today who have contributed to this, including members of the A4S Networks and those who sit on the various advisory groups, who very kindly give your valuable time and expertise. And, of course, huge thanks are owed to the A4S team, aided over the past year by our hard-working secondees from Deloitte, EY and PwC. 

However, Ladies and Gentlemen, despite the huge strides that have been made in putting some of the building blocks in place, we have not yet achieved the transformation required from business and governments.  The trouble is time is quite simply not on our side while we procrastinate on next steps for action, the evidence to support the need for change is increasing at an ever more  alarming rate.  Presumably accountants are trained to take risk into account in which case, recognizing  the existing signs that Nature's Bank is about to go bust should surely be a requirement for all accountants?   

Whilst we live in a time of great wealth and opportunity, it is also a time dogged by increasing turbulence and a rather terrifying combination of risks the pollution and over-consumption of finite natural resources; the very real and accumulating risk of catastrophic climate change; and a population of seven billion that is rising unsustainably fast.  Frankly, the older I get the more and more anxious I become no matter which way you look at it, the sums just do not add up.  

The recent 2014 report from the Intergovernmental Panel on Climate Change makes clear that the ‘severe' - as they put it - 'pervasive and irreversible consequences’ of climate change, if left unchecked, could be beyond our capacity to rectify.  These consequences include what we are already seeing in the form of ever more extreme weather events that damage our infrastructure, sea level rise threatening coastal cities and the disruption of weather patterns vital for agriculture to feed a growing population.   

Well it has seemed to me for a long time that we are living off the Earth’s natural capital rather than the income derived from that capital, and that if this continues it will have the direst possible consequences for us all.  Now I know only too well that there are siren voices on all sides telling you this is all rubbish dreamt up  by half-baked environmentalists, but it must surely be the case that, in the future, successful organizations will actually be those who have redefined their business models to adapt to this very different world?  In particular, those who find ways to use natural resources in a sustainable, "circular" way, with nothing going to waste, will find themselves uncovering new sources of innovation, reducing their risks and increasing their competitive advantage.

So, Ladies and Gentlemen, I presume you are not just here out of curiosity as to what I might say next, so hope I can call on your help to take forward the good work that has been done so far and find ways to make sustainability part of the D.N.A. of every finance leader and accountant on the planet? The expertise and judgment of your profession needs to be right at the heart of the vital transformation towards resilient and sustainable approaches that respond effectively to the gravity of the situation facing us.  

As C.F.O.'s and other senior business leaders, you have a unique capacity to sound the alarm and to be taken seriously. And you have the power to direct resources, and therefore businesses and economies, towards solutions and away from actions that are doing such harm. I can only urge you, if I may, to find your voice, while there is still time to act. Not least because, surely, when you look back in ten years’ time at your work as business leaders, you will presumably want to feel you have made a real difference to our collective future security and given some hope of prosperity to your grand-children?  And it should also have the added benefit of helping to protect your bottom line!  

So can I just suggest what simple steps might you possibly take?  

Firstly, work to achieve the cultural shift required in your own organizations to convince your Board and senior leadership of the importance of a truly sustainable business model. 

Secondly, reach out to your suppliers and customers and work with them to transform their approaches alongside your own. 

Thirdly, go out and seek to convince your peers.  In this regard, the team of accountants at A4S has highlighted some rather interesting numbers to me. I understand and I assume a team of accountants must be right! that if every one of you here in the room today manages to convince just five others to start accounting for sustainability, and then each one of them engages another five each year, in five years' time we could reach all of the three million accountants in the world!  However, I hate to tell you that for obvious reasons five years is too long so each of you, Ladies and Gentlemen, needs to rush out from here and convince ten! And then accountants really will be helping to save the world! 

Thank you Ladies and Gentlemen.