SAICA takes the lead with Green
Book urges business leaders to embrace sustainability to ensure profitability
Johannesburg, Wednesday 22 July 2009 - The South African Institute of Chartered Accountants (SAICA) has taken a significant step in positioning itself as a promoter of sustainable business and sustainability reporting in South Africa by launching Green, a book on why corporate leaders need to embrace sustainability to ensure profitability.
The launch of the book was held at the Johannesburg Stock Exchange (JSE) on 22 July 2009.
Speaking on behalf of Matsobane Matlwa, SAICA's Executive President, Tim Odell, Chairman of the SAICA UK Members Association, emphasised the growing importance of sustainability reporting to South African companies. "The global financial crisis has highlighted the significance of companies taking economic, social and environmental responsibility for their business activities and relaying this information to their stakeholders at a higher level than they have previously. Moreover, understanding and implementing sustainability business practices and reporting increasingly provides compliant companies with a distinct edge in the marketplace."
Odell noted that recent research revealed that almost one-third of directors of the top 200 companies listed on the JSE are Chartered Accountants [CAs(SA)], as well as one-third of the CEOs. "Clearly, the value they add to these organisations is treasured by management and shareholders alike. These chartered accountants play an influential role and can develop and drive the necessary strategies within their organisations to ensure that South Africa fulfils its duties and obligations in addressing sustainability challenges."
At the launch of Green, the JSE's Head of Investor Relations Michelle Joubert spoke on the importance of sustainable business practices in promoting long term profitability of companies and in enhancing business's ability to contribute to the building of a sound economy. "When the JSE started assessing the sustainability practises of JSE-listed businesses in 2004, our research indicated that many listed companies were aware of issues of transformation and sustainability but didn't know how to apply these," she said "We conceived of the Socially Responsible Investment Index as a way to both assess enterprises and to give them a tool to measure their sustainability practices."
Written and compiled by Graham Terry, Head of the Office of the Executive President at SAICA, Green highlights some of the challenges and opportunities surrounding the topic and outlines the principal global initiatives and reporting standards and guidelines.
A further objective of Green, as well as other sustainability initiatives being conducted by SAICA such as sustainability reporting training courses certified by the Global Reporting Initiative (GRI), is to demonstrate the Institute's strong commitment to sustainable development and to help mobilise its members to support global and local initiatives that promote sustainability.
SAICA has also established a dedicated website supporting the sustainability platform that the Institute is building. The website offers a quick and easy way to get up-to-speed with the main issues in sustainability and sustainability reporting. The website can be viewed at www.sustainabilitysa.org
"The Board of SAICA firmly believes that sustainability issues are major threats to the future of civilisation as we know it. We believe that SAICA can play a major role to raise the level of awareness in the business community about these issues," said Terry.
The relevance of Green is heightened by the release of the draft King III Report on Corporate Governance, which recommends that sustainability reporting be integrated into financial reports. The Report refers to "integrated sustainability performance and reporting," implying the integration of sustainability into decision making and into the annual report. This will allow stakeholders to make a more informed assessment of the company's economic, social and environmental contributions rather than simply its book value.
Some South African companies are already addressing the sustainability of their business operations and activities, and are issuing reports on their progress. The dual-listed, Top 40 companies have taken the lead in South Africa through their knowledge of sustainability trends evolving in North America and Europe, and also by the companies who, by dint of their operations, have a significant impact on their environment.
"There is a clear and wide gap between these companies and the majority of South African companies that have not yet begun implementing, or reporting, on measures to ensure sustainable business practices," Terry said.
Such companies, according to Terry, particularly those in the mining, engineering and manufacturing sectors which rely heavily on the use of natural resources and have not explored alternative sustainable processes, will soon find that by not adopting a sustainable approach to their operations they will be jeopardising their own sustainability in the long term as both global and local pressures for sustainability mount.
"Ultimately the path to sustainability has been a road less travelled by the majority of companies in South Africa. The launch of Green and SAICA's other sustainability initiatives aim to guide and facilitate the direction of South African businesses towards a successful outcome in this field. It is up to business in South Africa to recognise the urgency in choosing a sustainable future, not just for their benefit, but for all of us," Terry added.