The Commonwealth Climate and Law Initiative, a research project by the University of Oxford Smith School of Enterprise and the Environment, hosted a high-level symposium at the plush Four Seasons Westcliff hotel in Johannesburg recently
It has become increasingly evident that climate change represents material risks and opportunities and that there are serious implications in terms of corporate governance for the insurance and climate-risk exposed industries. With this in mind, the Commonwealth Climate and Law Initiative, a research project by the University of Oxford Smith School of Enterprise and the Environment, the Prince of Wales’s Accounting for Sustainability Project and ClientEarth, hosted a high-level symposium at the plush Four Seasons Westcliff hotel in Johannesburg recently.
Entitled International Symposium on Directors’ Duties and Liability Exposures for Climate Change Damage, it involved a series of workshops on the financial and business implications of climate change, the obligations of company directors and investors and corporate disclosures and misrepresentation. Speakers included Ben Caldecott, founding director of the Oxford Sustainable Finance Programme and Jessica Fries, executive chairman of The Prince of Wales’s Accounting for Sustainability, as well as representatives from the Johannesburg Stock Exchange, Sasol, Exxaro, the Auditor-General of South Africa and EY.
Representatives from Saica were also on hand to examine the role of the accountant in dealing with climate change issues. The commitment of South African financial executives and investors to sustainability was put into question, with one executive asking how many people involved in reporting had “even heard of an integrated reporting some 10 years after implementation” and stating that South African investors were not known for asking questions around sustainability.
She said SAICA, with 43 000 members across different sectors and levels, was introducing education initiatives aimed at furthering sustainable development goals and helping accountants understand climate change and its impact on them. These initiatives specifically targeted the new generation of professionals as these individuals were seen as most receptive to a mindset change and moving out of their comfort zones.
She concluded by urging the audience to behave ethically in an era of accounting scandals and to ask the difficult questions without overcomplicating processes and systems, putting in too many layers of control that would stop them from doing what they needed to do.
The highlight of the day was undoubtedly the keynote address delivered by the doyen of sustainable reporting Mervyn King. A former judge of the Supreme Court of South Africa and Chairman of the International Integrated Reporting Council, Mervyn is an award-winning speaker, consultant and author who has brought his considerable intellect to bear on legal, business, advertising, sustainability and corporate governance issues in 53 countries across the globe.
Mervyn began by recounting the fascinating history of companies and revealed how the primacy of the shareholder – directors and managements were seen as mere agents – was altered by the atrocities of World War II, an increased focus on individual rights and the acknowledgement of a company’s success going beyond profits alone.
The “revolutionary immensity” of the integrated report was not in the report, but in the actually thinking it encourages and outcome on economy, society and environment – critical pillars for sustainable development, he explained.
Mervyn expressed his opinion that capitalism hadn’t failed – it was the way in which it had been adopted that was problematic. He said the era of running companies solely through a financial lens was coming to an end. No director could afford to disregard the climate change risks – whether physical, regulatory and economic.
In closing, the globally renowned thinker issued a challenge to company executives: directors must realise that the return on investment of integrated thinking and company-centric governance lies in the long-term interest of all stakeholders and the stability of the global economy.