Montreux Experiences 2018

Redefining Value: Moving beyond Accounting & Finance

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“We don’t see things as they are. We see them as we are”

This is what Anaïs Nin quoted, and this is exactly what I felt during our intense series of “Management and Sustainability” workshops, before our field trip to Montreux. Both Yolina (Marketing student) and I (Accounting & Finance student) were amazed when we captured and explained the same ideas from totally different points of view, based on our academic backgrounds. This is also the reason we decided to create collaborative blogs reflecting the way we each perceived Redefining Value (1): this one which reveals the accounting and finance aspect of the idea and another unleashing the marketing side of the coin.

Measurement, materiality and comparability, financial and non-financial capital, external reporting and disclosure, decision-making…All sound familiar if you are an accountant! In case you are, or on the other hand if you aren’t, Redefining Value will lay out the roadmap to this pathway anyway! Talking about Redefining Value let me first clarify that this is one of the five key programs offered by WBCSD (1). With the vision that by mid-century all companies will measure, value and report their true value, true costs and true profits (2), Redefining Value aims at revamping business approaches towards measuring and managing risks as well as opportunities by considering Environmental, Social and Governance (ESG) information (1). This will have a positive knock-on effect on the effectiveness of external reporting and on the improvement of decision-making (2).

In order to accomplish this objective, companies need to think out of the accounting and financial box; they need to adopt an integrated approach, and apart from financial capital, they need to move the incorporation and accounting of their natural and social capital into the mainstream (2). WBCSD experts on Redefining Value indicate the business solutions through Enterprise Risk Management (3), Natural Capital Protocol (4) and its corresponding toolkit (5), Reporting Matters (6), Social and Human Capital Protocol (7).

Struggling to meet the needs of various stakeholders in producing sustainability reports and furthermore, striving to satisfy regulators and investors by other mounting disclosure requirements, companies confront high pressure although significant improvement has been noted here (8). Additionally, this reporting information must be concise, meaningful, material and comparable. However, “material” sustainability topics and the risk factors listed in the corresponding legal filings are apparently disconnected (3). This is mainly due to the lack of consensus across generally accepted, standardised and prescriptive methodologies about reporting sustainability information, something that also prevents comparison across companies and sectors. Therefore, I guess it’s high time for pertinent bodies to develop Generally Accepted Assurance Standards (GAAP) for Sustainability…

In conclusion, I would like to cite a paragraph from Radley Yeldar’s website (9):

“In an increasingly complex world, organizations, that succeed are courageous, connected and stand for something. They are visionaries. They respect the resources and relationships they depend on, harness technology to drive innovation, and embrace truth and transparency to achieve meaningful results.“

To read about the marketing aspect of Redefining Value visit Yolina’s blog post: Redefining Value: Moving beyond Marketing.

Maria Zani, April 2018

 

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