Peer pressure 'won't achieve Prince's green accounting aims'

Companies may have to be forced to adopt green accounting, a charity has said, even given the enthusiastic reception to Prince Charles’ report into environmental reporting.

Prince Charles unveiled his report into ‘Accounting for Sustainability’ last month, with senior members of the profession saying that ‘peer pressure’ would force companies to adopt the Prince’s new approach.

But Christian Aid, while saying the Prince’s work was ‘very valuable’ change, insisted the government would still have to intervene to make green reporting a reality.

‘At some stage, government will have to set new standards that accountants, and accountancy firms, have to meet. There has to be regulation to ensure that all companies, good and bad, are forced to take into account the impact of their business on people and the planet,’ said Andrew Pendleton, a senior policy officer at the charity.

The Prince’s work has been hailed by senior members of the profession, who say it has provided a simple and clear solution for companies.

The report suggested companies should report on five key environmental indicators; they should reveal their polluting emissions, energy use, water use, their waste and their ‘significant use of other finite resources’.

‘Peer pressure and best practice [will encourage uptake]. People will look at it and see it works,’ said Sir Mike Rake, chairman of BT and former head of KPMG.

Sir Mike, who has been involved with the project, said the report was better than other attempts to hone environmental reporting. ‘Some of them are very, very complicated. Sometimes less is more.’

Between six and 12 major companies ­ including Sainsbury’s, BT, Aviva, EDF Energy and HSBC ­ are now set to implement the rules as part of their reporting.

Though the take-up of the recommendations is likely to be voluntary, Lord Sharman, also a former KPMG head, indicated that the Companies Act already imposed a general burden on companies to report such information.