Date issued: 5 December 2007

Australians strongly support the introduction of a carbon emissions trading scheme within five years and mandatory reporting of water use in company annual reports, according to CPA Australia's sixth annual Confidence in corporate reporting 2007 survey, released today.

The overwhelming view emerged as part of strong support for laws requiring companies to prepare sustainability reports that reveal the social and environmental impacts of their activities, and for these reports to be independently reviewed.

CPA Australia chief executive officer Geoff Rankin said that the findings are further evidence of the growing demand in Australia for triple bottom line reporting.

'Sustainability type information is crucial to business decision making. While we understand the impulse to make this type of reporting mandatory, going down such a path would be a mistake,' Mr Rankin said. 

'The capacity of business to undertake mandatory sustainability reporting is unclear. What's more, prescriptive regulation is likely to lead to a one-size fits all approach which is inconsistent with the nature of sustainability information. 

'We believe that sustainability reporting must be allowed to evolve through market and voluntary mechanisms and cannot be short-circuited through pre-emptive regulation.'

Mr Rankin said the majority of those surveyed wanted companies to report on environmental performance and the use of natural resources by their suppliers.

Of those surveyed, ninety-one per cent of the Australian public wanted companies’ water use to be made public, with 84 per cent of finance professionals also strongly supportive of this measure and business leaders showing the least support, but still with 76 per cent in favour of the move.

'Many Australian households are now subject to varying levels of water restrictions, so it is not surprising that they want to know how much water corporate Australia is using,' Mr Rankin said.

CPA Australia has also recently partnered with Monash University to research how accounting for water can enhance the way government and business manage this precious resource.

There was also strong support (79 per cent) for the introduction of a carbon emissions trading scheme within five years.

'CPA Australia is extremely active on the accounting and audit issues associated with an emissions trading scheme. They need to be tackled with urgency. Only last week I wrote to the Chairman of the International Accounting Standards Board encouraging him to take action on this issue.' 

The survey results also show that an unfavourable environmental reputation is a substantial disadvantage for a company as most Australians would be discouraged from:

• working for a company with an unfavourable environmental reputation (86 per cent)
• investing in it (85 per cent)
• buying its products or services (85 per cent) 
• providing services or supplies to it (69 per cent)

'These findings send a clear message to business - sustainability issues matter. Ignore them at your peril.'

The survey found Australians use a range of sources of information when choosing socially and environmentally responsible investments.

The most favoured sources are financial advisers and annual reports, while fund managers also rely on investor briefings and ratings agencies. CPA Australia asked the same question as part of a previous survey and found that financial advisors and ratings agencies were most favoured by respondents in 2005.

Mr Rankin said that he believed the preference for annual reports is a positive indication of an improvement in the quality and usefulness of the social and environmental information contained in annual reports.

Mr Rankin said that CPA Australia would equip its members to successfully manage and report sustainability information.

Background to survey

CPA Australia's sixth annual Confidence in corporate reporting 2007 was conducted during October and November and surveyed 300 members of the public, as well as 200 directors / CEOs / CFOs, 150 financial analysts, advisers and stockbrokers, 100 auditors and 44 institutional investors and fund managers.

The 2007 survey captured their perceptions in four broad areas:

• confidence in investments and business professionals
• sustainability policy and reporting
• corporate governance
• new audit standards

The survey was commissioned by CPA Australia and undertaken by independent research organisation Di Marzio Research.

For further information view a copy of CPA Australia's Confidence in corporate reporting 2007.

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