On Monday, members of A22 Network's Canadian chapter, Save Old Growth, blockaded the north side of the Massey Tunnel during rush hour. That's my family's main access to Vancouver where they work and go to school, so I noticed. I also noticed the blockaders were young, university age mostly, and so I wondered why, if they were so serious about fighting climate change, they weren't studying to be accountants. If they really want to avoid being "the last generation," then why not join a revolution that offers real power without the handcuffs?
Consider Ramya Kirishnaswamy's opening statement to Emmanuel Faber (ISSB Chair) at the World Economic Forum (WEF) Annual Meeting in May 2022 titled Global ESG Standards: Are We There Yet?:
“The ISSB or the International Sustainability Standards Board [is] tasked with perhaps the most important effort of bringing common ESG standards [into] the world, and someone reminded us a few days ago that it’s one of the most important innovations in accounting since almost the 14th Century.”
Faber laughed at the grandiosity of the claim, but went on to say, “I’d agree with the fact that this is groundbreaking work."
Gillian Tett, Chair of the Editorial Board for Financial Times Moral Money, who was also on the panel added:
“I’m not sure about the 14th Century analogy, but it's certainly in many ways the most striking reform to accounting and audit since probably the 1930s, and it’s very, very ambitious. And precisely because it’s geeky and only understood by the priestly class, people don’t realize that the idea of trying to overhaul, not just the accounting framework, but the audit framework at the speed at which they are trying to move is absolutely remarkable. ... I used to think it was sort of tie-dye-wearing activists who were going change the world and campaign for climate change, now I realize it’s actually warrior accountants and being an accountant has suddenly become quite cool."
As the kids in A22 are probably not members of the "priestly class" and probably don't know these acronyms, let me explain.
First, please note, I'm not going to go into the accounting revolutions of the 14th Century and the 1930s. These are important moments in financial history in their own right and so deserve their own post. What I want to focus on are three pillars of the real-deal, mega-funded net-zero revolution that's underway right now and operating at the highest levels of financial power and influence. These pillars are: stakeholder capitalism, SDGs, and ESG.
Stakeholder Capitalism
There is a 50 year history to this concept which is outlined in two recent books (The Great Narrative and The Great Reset) by Klaus Schwab, a German economist and founder of the World Economic Forum. The concept is quite simple. In shareholder capitalism (or what we think of as plain old capitalism) companies create value for shareholders, while in stakeholder capitalism companies create value for shareholders plus the community, customers, employees, suppliers, and the environment.
Schwab's manifesto calls for a business-led transition to net-zero. The idea is that business, instead of governments (which are in debt) and charities (which are comparatively poor) can throw much more manpower and money at humanity's problems, and only they, the capitalists, can really make progress by gatekeeping who gets investment capital and who doesn't. Numbers like $6 trillion per year, with $2.5 trillion alone going to the environmental part, were mentioned by Brian Moynihan (CEO, Bank of America) during the WEF panel cited above. When stakeholder capitalists throw their financial power around like this, they say they can marshal the forces of accounting (enter the warrior accountants) to move the whole economy toward SDGs whether everyone wants to or not.
SDGs
The United Nations Sustainable Development Goals or SDGs have their roots in the 1992 Earth Summit in Rio. I have to imagine the A22 kids are familiar with these 17 goals that were codified and agreed to by all UN member nations in 2015 in The 2030 Agenda for Sustainable Development. From ending poverty and world hunger, to promoting gender equality, ensuring affordable and clean energy, to encouraging responsible consumption and production, the SDGs are what warrior accountants are going to make sure every company lives up to. How? That's where ESG comes in.
ESG
Environment, Social and Corporate Governance. This poorly defined and uncoordinated way for companies to self-report on how their operations are doing on SDG goal was all the rage for about 20 years, especially as a way to bundle high scoring companies into green or social justice fund packages to sell to retail investors. Actually, it still is all the rage and people in the investment world still use it every day, but ESG's days are numbered. The big boys, well, the Big Four (accounting firms Deloitte, Ernst & Young, KPMG, and PwC) actually have come up with a set of global baseline financial reporting standards (headed by Faber and the ISSB) that will forcefully align capitalism, the stakeholder kind, with SDGs, one entity at a time using financial reporting requirements...again, enter the warrior accountants.
These global ISSB standards are currently sitting online and are open for comment, if that sort of thing interests you, which it should if you run a business in Canada.
So, you see, young climate rebel, the smarter way to protect your generation and future generations is not to stop my family from commuting to work and school, it's to get your CPA.
