Why warrior accountants could be the biggest revolutionaries of all
Move over hippies: ‘warrior accountants’ set the pace of change
● Thirty years ago, when I was a student at university, I presumed that if anyone was going to start an environmental and social revolution, it would be led by activists wearing tie-dye T-shirts and hippie bracelets — and waving political placards.
After all, back in the 1980s — or the era shaped by the free-market ideas of Margaret Thatcher or Ronald Reagan — the people pressing for social change tended to be people with a liberal, anti-establishment bent, and/or students studying social sciences.
Students or young professionals who had embraced the Thatcherite dream were too busy polishing their resumés and trying to win jobs at management consultancies, investment banks or accountancy firms to have time to embrace activists’ causes — or take part in a Greenpeace rally, say.
There was, in other words, a quasi-tribal divide: well-meaning liberals and political or green activists seemed to sit in a different camp from hard-headed careerists who wanted to go into business, or handle balance sheets, spreadsheets and computers.
How times change. These days, there are still plenty of liberal dreamers fighting for social and environmental change. But sparking a revolution is no longer “just” about placards or street protests.
Instead, the new front for activism revolves around something that anti-establishment hippies used to scorn or ignore — the world of accountancy and finance.
To put it another way, we are entering an era when balance sheets matter more than protest barricades — and a new breed of activist warrior accountants could be the biggest revolutionaries of all.
To understand this, consider — by way of one example — the Carbon Disclosure Project, or CDP. This project first sprang to life in 2000, when a handful of business entrepreneurs and environmental idealists hit on the idea of tracking carbon emissions.
Initially, the concept seemed bizarrely alien. As Paul Simpson, the CEO, recently explained in the HuffPost: “We had set out to do something that was practically unheard of in capital markets at the time — ask business to provide climate-related disclosures.”
While many businesses initially refused, around 35 institutional investors, managing US$4-trillion in assets, jumped on board in 2002 and urged companies to provide data on their carbon emissions, targets and projected reductions.
The idea slowly snowballed, and these days around 6,300 companies offer this type of corporate statement. So do almost 600 cities and 100 states and regions. “It has been exhilarating to see how the flood of data, which we have helped to drive demand for, is influencing the way investors and asset managers approach low-carbon investment,” says Simpson.
Then consider the case of ExxonMobil. Environmental groups have been criticising the carbon footprint of the mighty oil company for years — with little effect. But, a couple of years ago, campaigners prodded the Securities and Exchange to launch an investigation into whether Exxon had mis-stated the possible impact of future environment regulations in corporate reports about the valuation of oil and gas reserves.
As it happens, the Trump-era SEC leaders concluded this two-year investigation earlier this year without finding evidence of wrongdoing. However, two state attorneys are continuing their own probe. And notwithstanding the eventual SEC ruling, the mere publicity around this case seems to have had some impact: earlier this year Exxon said it was re-evaluating how it measures carbon issues in its corporate accounts.
So, if I could be transported in a time capsule back to my student self, the message I would give my student cohort would be this: if you are angry about how the world works, and want to campaign for social change, do not ignore or dismiss the accountants.
On the contrary, trying to start a revolution through corporate balance sheets, or the once-dry world of actuarial measurements and disclosure, might be far more effective.
No, not all accountants and asset managers welcome the idea of “going green”.
But it is time to hear cheer for the new breed of activist bean-counters. Revolutionaries can come in many forms — sometimes dressed in grey suits, instead of tie-dye.
© The Financial Times