Is the Prince of Wales proclaiming sustainability reporting throughout the accounting realm?
Not exactly, but the announcement this week that Prince Charless Accounting for Sustainability Project has partnered with the Global Reporting Initiative and a whole palace-full of accounting industry leaders and other dignitaries on combining financial, environmental, social and governance reporting seemed appropriately grandiose (see Group Formed to Set Sustainability Accounting Rules). Still, its a bit hard to make out exactly what is planned.
The prince has been involved off and on since 2004 when he created his Accounting for Sustainability Project, also known as A4S, in an effort to make sustainability reporting a part of the financial reporting and decision-making process. To date, there hasnt been much to show, but last December he convened a high-level meeting of investors, standard-setters, companies, accounting bodies and even United Nations representatives in an attempt to jump-start the process.
Thats when A4S agreed to work with another group, the Global Reporting Initiative, which had made some headway in at least developing a Sustainability Reporting Framework thats used by some companies to tout their environmental accomplishments in their annual reports. In some circles, this is known as greenwashing. It's probably best exemplified by British Petroleum, which tried to dub itself as Beyond Petroleum in commercials advertising its efforts to develop clean energy - at least until it managed to spew millions of barrels of oil into the Gulf of Mexico.
Be that as it may, the prince has managed to make himself into the U.K.'s answer to Al Gore, and has purportedly worked for over three decades on environmental matters (take that, Al). NBC is even planning to air a documentary in November entitled Harmony about his environmental work, and the prince has been penning a companion book to go along with it. No word yet on whether he will be getting a Nobel Peace Prize too.
The princes latest effort is going to be called the International Integrated Reporting Committee. The plan is to combine not only financial and sustainability reporting, but also reporting on corporate governance and social matters such as human rights. (Perhaps companies would have to disclose somewhere in the footnotes to their annual reports whether they used any child laborers or slave labor to make their electronic gadgets.)
Some of the goals seem slightly contradictory, with the intention of developing a framework that brings together financial, environmental, social and governance information in a clear, concise, consistent and comparable format, but also one thats comprehensive. Hopefully, when all is said and done, companies would be able to do more than keep track of their trading of carbon emissions and offsets.
The committee has its own Steering Committee, along with a Working Group. The members include a long list of the heads of the major accounting standard-setting organizations and international accounting firms, as well as non-governmental organizations, business leaders and the like. Chairing the Steering Committee is Sir Michael Peat, who is principal private secretary to the Prince of Wales and the Duchess of Cornwall (also known as Camilla Parker Bowles). Peat has been credited with slashing expenses at Buckingham Palace, convincing Prince Philip to turn off the lights when he leaves a room, and even persuading Queen Elizabeth to pay her income taxes. And thats on top of trying to keep the royals names out of the Fleet Street gossip columns.
Still, its hard to know what to make of Prince Charless interest in setting accounting standards. While he had to give up playing polo about five years ago, its hard to believe that financial reporting has become his new passion in life. Tellingly, the only quote that the press release could get out of the prince was a sentence fragment, to the effect that the Prince of Wales has said, we are at present battling to meet 21st century challenges with, at best, 20th century decision making and reporting systems. Not exactly as memorable as Once more unto the breach, dear friends.
The prince has been waiting patiently for well over five decades to assume the royal throne, and he certainly could use some activities to occupy his time. The royals don't have the power to banish the accounting standard-setters from the kingdom or shut them up in the Tower of London, but perhaps in the meantime the prince can do some good by convincing companies and their auditors to take account of more than their financials when they report their results to the public.
Still, while it may be gratifying to learn what corporations are doing about the environment, human rights and other weighty matters besides their own bottom line, its hard to believe they wont take the same liberties in reporting on their efforts to combat climate change as they do when deciding how to recognize revenue and expenses on their quarterly financial statements. No royal fiat is going to prevent that from happening.
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