External initiatives

The Financial Reporting Council (FRC) has consulted on proposals to revise its guidance for directors on financial reporting. Company directors could be made to disclose any "significant doubts" over whether their business truly is a going concern under the proposals:

www.frc.org.uk

The Department of Business, Enterprise and Regulatory Reform (BERR) is consulting on implementation of the Directive on the Exercise of Certain Rights of Shareholders in Listed Companies.  The Directive aims to improve corporate governance in EU companies traded on regulated markets by enabling shareholders to exercise their voting rights and rights to information more easily. 

Leaders of the world's major economies meeting in Washington drew up an action plan to try to combat the financial crisis and pull the global economy back from one of the worst downturns in decades.  The Group of 20 (G-20) industrialised and emerging market economies announced a series of immediate and longer-term actions to stabilise the financial system, stimulate domestic demand, help emerging and developing economies battered by the crisis, and strengthen the regulatory framework. A second summit will be held by 30 April 2009 in London.

The Financial Services Authority (FSA) has launched a discussion paper on consumer responsibility to explore what steps the regulator or others could take to help consumers understand and protect their own best interests more effectively. The protection of consumers is one of the FSA's four statutory objectives, and the regulator adopts a two-pronged approach to achieving its consumer protection and consumer awareness objectives: it sets, monitors and enforces standards for firms; and it provides – or require others to provide – education, information and advice for consumers.  The deadline for responses is 19 June 2009.

The President of the United Nations General Assembly has established a Commission of Experts whose mandate is to reflect on the causes of the international financial crisis, assess impacts on all countries and suggest adequate responses so as to avoid its recurrence and restore global economic stability. The Commission will seek to identify the broad principles underlying the institutional reforms required to ensure sustained global economic progress and stability. It will suggest proposals for reforming the international monetary and financial system and identify and evaluate the merits and limitations of alternatives that are at the centre of current global debate. The report of the Commission will serve as the basis document for the a high level conference on the world financial and economic crisis to be organised under the auspices of the President of the UN General Assembly, in due course. A summary of the first meeting of the Commission of Experts which took place from 4-6 January in New York, has been published. [Source: UN website 8 Jan. 2009]  The Network for Sustainable Financial Markets welcomed the initial findings of the Commission, saying it is “noteworthy that unlike most official statements to-date, it makes the explicit link between simultaneously pursuing long term objectives, such as sustainable and equitable growth, the responsible use of natural resources, and reduction of greenhouse gas emissions, and more immediate concerns, including addressing the challenges posed by the food and financial crises.”

The starting premise for the Better returns in a better world project, launched by Oxfam and Insight Investment in November 2008, is that steady flows of long-term private investment when managed responsibly can provide substantial development benefits through supporting economic growth and paying the taxes needed to provide essential infrastructure and services.  An article in Responsible Investor suggests that Institutional investors have played an important role in improving companies’ performance in developing countries, but  their ‘social licence to operate’ is likely to be further challenged unless investors can demonstrate that they have also made a positive contribution to the delivery of wider social and environmental goals.

Growth International has initiated a research project with Tomorrow's Company and the Institute of Chartered Accountants in England and Wales which aims to identify the impact that sustainability reporting has had on business strategy.  A briefing paper has been written by Professor Graham Hubbard of the University of Adelaide to launch the project. It covers the development of sustainability reporting. It considers approaches to sustainability reporting and the models of reporting that have emerged. It also looks at the general issues which arise from the measurement problems which arise when businesses consider non-financial metrics. Finally, it proposes plans for research which is proposed to address these issues.  Background to the project and Graham's paper are available via the two weblinks below. Tomorrow’s Company are seeking public comments on the ideas laid out in the document prior to the research commencing.  Peter Desmond (peter@growthinternational.com) will be involved in the interview-based research and drafting of the conclusions from the research which is expected to be published in Autumn 2009.

Tomorrow's Company: http://www.forceforgood.com/Articles/A-joint-forward-to-Beyond-Accounting-408/1.aspx

Institute of Chartered Accountants in England and Wales:

http://www.icaew.com/index.cfm/route/162694/icaew_ga/en/Technical_and_Business_Topics/Consultations_and_representations/ICAEW_consultation/Beyond_Accounting

Senior MPs, trades union leaders, pension and investment industry specialists are urging the Prime Minister to step in to oblige pension funds to insert a “do no harm” clause into their statement of investment principles and to sign up to the United Nations Principles of Responsible Investment (PRI). In their representations to the Prime Minister senior figures from Parliament, the TUC and investment sector said the proposed responsible investment initiatives would help address some of the practices that had contributed to the current financial crisis.

http://www.thersa.org/projects/tomorrows-business

www.sustainablefinancialmarkets.net

http://www.newcommons.com/index.php?option=com_events&task=view_detail&agid=24&year=2009&month=01&day=19&Itemid=4