Accountancy Europe issues position paper on sustainable finance
05 Mar 2018
In the context of the EU’s transition to a low-carbon, resource-efficient and sustainable economy, Accountancy Europe has published a position paper that notes that the financial system has a critical role to play in this process and that professional accountants are crucial in building a comprehensive sustainable financial system.
In January 2018, the High-Level Expert Group (HLEG) on Sustainable Finance, established by the European Commission, published its final report setting out strategic recommendations for a financial system that supports sustainable investments. Accountancy Europe now adds to the HLEG recommendations by noting the three areas where the profession can contribute most. The position paper cites:
- corporate reporting to accommodate long-term horizons;
- disclosure requirements to address investors’ needs; and
- accounting frameworks to be in line with long-term investments.
As regards IFRSs, the paper notes:
IFRS are not designed to encourage or discourage long-term investments or any type of investments. The financial reporting purpose is to provide for users of financial statements information on what is currently happening.
Therefore, the position paper warns against two recommendations of the HLEG:
- To authorise the EU to change specific aspects of IFRSs before adopting them as setting European standards would isolate Europe from the global capital market, hinder investment, create confusion, increase the cost of capital, and diminish Europe's influence on the standard-setter.
- To only adopt IFRSs if they consider sustainability and long-term investment objectives as at this early point of time this would not focus on improving non-financial reporting but rather hinder transparency that is currently in the process of developing.
Please click to access the position paper on the Accountancy Europe website.
