An urgent worldwide effort is needed to address the many environmental problems that have arisen due to global economic growth from traditional economic models, says Helen Brand, the Chief Executive of ACCA (the Association of Chartered Certified Accountants) in her introduction to a new discussion paper called The green economy: pushes and pulls on corporate China.
ACCA commissioned the Hong Kong-based think-tank Civic Exchange to conduct research about China and the green economy. The result is a wide-ranging paper which examines how an increased focus on environmental and social performance, at international and national levels, is affecting corporations and state-owned enterprises (SOEs) in China and Hong Kong.
Helen Brand says: 'While this paper looks at China and Hong Kong, it has impactful insights for a global audience too. China has become a major driver of global growth, and its path to achieving sustainability is crucial for all.
'There is also a growing demand for Chinese companies, international companies operating in China, and the global supply chains in which China plays such a central role, to disclose information about their businesses to investors, consumers and other stakeholders. There is a clear role for accountancy and other financial professionals to bring greater clarity to this necessary process, and for the accountancy profession to play a part in developing strategies and solutions that will help in China’s sustainability transformation.'
The paper explores the many factors that businesses need to consider – from government policies aimed at reducing carbon emissions or pollution levels, demands from customers based outside of the country to improve labour conditions in factories, or calls from investors for greater disclosure on environmental, social and governance (ESG) topics.
In a chapter authored by PwC, the paper also highlights how accountants are able to help companies address the various risks and opportunities presented by this change.
Rachel Jackson, head of sustainability at ACCA commissioned the report and adds: 'In many economies – not just China - economic growth has meant environmental degradation, so a main challenge for us all is designing tangible and measurable ways to reconcile economic and manufacturing expansion with sustainability and environmental net positive considerations – whereby we leave the environment in an improved state.
'On a global level, sustainability will not be achieved without broader and deeper forms of accountability– and this is where the accountancy profession comes in. Accountability needs new forms of transparency and stakeholder engagement.'
The greening of the Chinese and Hong Kong economies was discussed in Hong Kong and Beijing as part of ACCA’s week-long Accounting for the Future Global Virtual Conference.