The New Zealand Sustainable Finance Forum (SFF) (as established by the Aotearoa Circle) called for submissions in response to its Interim Report. We provided our submission, which comprised responses to questions asked by the SFF, on 5 March 2020.
Key high-level points from our responses include:
- We agree with the vision of the SFF. We are strong proponents of a sustainable financial system which recognises and protects environmental and social resources.
- In its current state, we consider the current financial system does not adequately consider sustainability principles. Despite this, we commend the Government and other organisations, such as the Aotearoa Circle and the SFF, for their continued efforts in the development of a sustainable financial system.
- We consider it crucial that organisations take a multi-capital approach to their operations and value creation. As such, we consider business and investment sectors should be expected to serve a broader social purpose and to deliver positive environmental and social outcomes.
- While regulation can sometimes change behaviour, we caution against using this avenue to enforce compliance. There is a need to avoid organisations viewing sustainable finance as another 'tick the box' exercise. Regulation can be used to set the minimum acceptable behaviour and standards. However, to be effective, there needs to be appropriate monitoring and enforcement of the requirements.
- In our role as a professional accounting body, we have a responsibility to equip our members with the skills and expertise necessary to help effect meaningful change. Accountants are tasked with identifying material risks with financial consequences and providing the information needed to make decisions. This includes providing relevant financial and strategic analysis, disclosure, scenario analysis and assurance to help organisations generate and preserve value.