For some inexplicable reasons Edward Snowden, the former consultant to the United States national security adviser (NSA), cannot stop divulging sensitive information while taking refuge in Moscow, Russia. Here is a sample from the tapes he released last week:
In the United Kingdom, the ‘Big Four’ firms of chartered accountants (PricewaterhouseCoopers; Deloitte; KPMG; and Ernst & Young) earned 10 times more in audit fees than the next largest accountancy firms in Britain combined. Snowden was somehow able to gain access to the “secret and confidential” report of the Financial Reporting Council which disclosed that in 2013, Deloitte toppled PricewaterhouseCoopers (PwC) as the number one global firm. Although the global figures appear to have been tampered with, the section dealing with the United Kingdom revealed very clearly that two years ago, the four mega firms pulled in 75 per cent of the aggregate revenue of all the audit firms with an average slice of about £Stg 2.05 billion while the next six firms (including JK Randle Professional Services) made only about £Stg 200 million!
On CNN, Arthur Bailey, president of the Institute of Chartered Accountants in England and Wales (ICAEW), was tackled by Richard Quest but he was at his most tactful and diplomatic best when he patiently explained: “Accountancy is not about money. Rather it is about service and public confidence. I have benefitted immensely from my years on ICAEW’s Council. When we join we become part of a fantastic network of peers drawn from across the profession, now both in the UK and overseas, including practitioners from all sizes of firms and members working in a wide range of business sections. Council offers us the opportunity to develop new skills, to learn how to influence people and to contribute to public policy. We are kept up to date with issues of importance to the profession through a programme of external speakers – such as Sir Win Bischoff, chairman of the Financial Reporting Council; Martin Wheatley, chief executive of the Financial Conduct Authority; and Lin Homer, chief executive of Her Majesty’s Revenue and Customs – whether it be to update us on regulatory moves or to face a barrage of questions about service standards.”
Under his leadership ICAEW has launched ‘Best Practice Guideline: Environmental and Social Governance in Investment and Transaction Decisions’ authored by Neal Barker, Scott Beaton, Stephanie Tyrell and Sean Allen. The guideline is aimed at companies seeking investment and their advisers. “It seeks to demystify environmental and social governance (ESG), explore its application and benefits, as well as assess the challenges involved.”
The advocates of ESG have been very active on the social media where they have been winning converts by aggressively promoting the merits of their cause with the following message: “ESG acts a prospective area of growth for the corporate finance sector for a number of reasons: new opportunities for investment can be considered, with access to new markets and businesses; there are ever increasing financial risks associated with ESG criteria; more and more stakeholders expect that investors will deliver more than simply financial return on their investments; demonstrating adequate ESG risk management is increasingly becoming a standard requirement across an ever wider range of investment organizations; and it helps protect reputational risk and ‘goodwill’-related assets values.
As confirmation that these issues are critical, proponents of ESG have identified three key areas of risks and opportunities:
(i) Climate change
“Climate change poses a number of threats to investments worldwide. With the Intergovernmental Panel on Climate Change (IPCC) continuing to model the impacts of global warming, investments ranging from infrastructure to agriculture could be threatened and ultimately lost. As a result of this, fossil-fuel-dependent industries have become less attractive to investors while renewable energy and sustainable technologies are in increasing demand.
“On the other hand, threats to investments arising from climate change are also creating new opportunities for investment. With increasing development in emerging market economies, new markets are being created with opportunities including renewable energies, flood defence and sustainable transport planning.”
(ii) Resource scarcity
“Resource scarcity threatens to be a significant challenge to the global economy. With many technological products requiring the sourcing of rare minerals, and with questions around the sustainable production of goods worldwide, opportunities lie in the sustainable sourcing and production of goods, while putting pressure on practices that are unsustainable.”
(iii) Human rights and social impacts
“Investment in projects and businesses have impacts on people’s lives, in particular in the developing world where vulnerability to any changes is often more significant. The social impact of these investments has become a significant, if not dominant, topic within ESG. Related issues include the regional economic benefit of investment in new projects, improved social mobility associated with increased employment, or negative impact issues such as forced resettlement, economic displacement within communities or impacts on health or crime.
“For example, conflict minerals are a strong topic area in ESG. With the mining of tin, tungsten, tantalum and gold in some areas of the world being associated with funding civil wars, domestic abuse and unfair working conditions, there is pressure for investees and investors to demonstrate that product components have not been sourced from conflict-associated mines.”
Perhaps this is what provoked the chilling message delivered on Al Jazeera by Islamic State (ISIS) spokesman Abu Mohammed al-Adnani: “We call on all Jews and Christians, if you want to save your blood and money and live in safety from our swords – you have two choices, either convert or pay jezyah (tax for non-Muslims under Islamic rule).”
On BBC’s Hard Talk, the topic was hard drugs! It was duly reported as the front page headline of Saturday Mirror of March 14, 2015: “Drug Trafficking: Akwa Ibom Ladies Top Chart Of Most Arrested Females”.
Even before the programme was over, BBC’s telephone lines were jammed with protesters from Nigeria and Zimboda who reminded Stephen Sackur, the host of ‘Hard Talk’, “Last year 4,000 vacancies were to be filled at the Nigerian Immigration Service. However, the Ministry of Interior (the supervising ministry) approved the sale of application forms to over 520,000 citizens (according to Sunday Mirror front-page, March 14, 2015), amounting to over $3 million in revenue for the ministry. Despite the huge amount it made from the sale of the application forms, the Nigeria Immigration Service failed to make adequate provision for the aptitude test. With the turn-out that day, it was as if Nigeria was hosting the football World Cup in all the centres. From Abuja to Kano, Lagos and Port Harcourt, all over Nigeria, hopeful job-seekers turned up in droves. They were packed like sardines in stadia without proper supervision and facilities, not to talk of food and water. Sadly, about 21 of them, including a pregnant woman, lost their lives. Many more were severely injured in the stampede.”
It was with considerable glee and unconcealed sense of mission accomplished that President Barack Obama declared to his host Jon Stewart on the ‘Daily Show’ (Comedy Central): “The United States of America is virtually self-sufficient with regard to crude oil. In three years’ time, we shall become a net exporter. OPEC (the cartel) had better watch out! This year we shall not import a single barrel of oil from Nigeria.”
J.K Randle
