As the G20 meets in Bali this week, the B20 – the G20’s official dialogue with business – has set out its recommendations for policy makers. ICAEW is a member of the B20’s Integrity and Compliance Task Force, which this week set out a policy paper that outlines the actions that it believes will create a more responsible global business environment.
The policy paper makes four recommendations around promoting environmental, social and governance (ESG) initiatives, encouraging integrity and transparency safeguards, creating agility in measures to combat money laundering and terrorist financing, and strengthening governance to mitigate cyber crime risks. Each recommendation sets out a number of action points. Although not binding, commitment is sought from G20 governments to take forward those points in future policy actions.
“COVID-19 and the recent global crisis have made it harder for businesses to act with integrity,” said Task Force Chair Haryanto T Budiman. “Even before the pandemic took hold, businesses faced significant pressures. Trade wars, sanctions and export controls, fraud and political upheaval, all weighed heavily on companies. While compliance programs have grown in scale, organisational leaders appear to have become more tolerant of unethical behaviour, particularly among themselves.”
Key recommendations include actions to:
- promote sustainable governance in business to support ESG initiatives; and
- foster agility in measures to combat money laundering.
ICAEW has contributed to actions in each of these areas.
We were pleased to see the Task Force recommend that G20 governments:
- promote and accelerate the adoption of a high quality, globally converged and accepted sustainability reporting standard;
- strengthen Board capacity and capability through empowering the role of Audit and Risk Committees, including by onboarding at least one independent committee member with relevant compliance, governance, internal control, accounting, and sustainability expertise; and
- enhance the ability and efficiency of money laundering threat identification, based on the risk-based approach.
These measures recommend tangible action in areas that ICAEW members have consistently highlighted as important to them. It remains to be seen how G20 governments, including the UK government, will respond to the recommendations and the Task Force’s report has set a useful benchmark for future action.
“It is good to see these important recommendations being highlighted at the G20 summit,” said John Boulton, ICAEW Director of Policy. “We worked with the Task Force during 2022 to develop measures with potential to make a real difference. The Task Force identified early on that decisive action to secure corporate progress towards greater sustainability could come from strengthened governance and control.
“This area had been somewhat neglected, but we identified that in order to build trust around sustainability metrics – that performance was heading in the right direction – governance had a crucial role to play. It was great to see the Task Force recognise this and also the central role that accountants can play in this process. Work remains to be done, but the Task Force’s recommendations set a platform for further action.”
ICAEW hosted an official B20 event in September in support of the Task Force’s third recommendation to foster agility in measures to combat money laundering.
Conny Siahaan, Head of Indonesia at ICAEW, said: “As a member of the B20 Integrity and Compliance Task Force, ICAEW supports the task force’s recommendations to mitigate money laundering practices and strengthen corporate governance in Indonesia. We hope that through this conference, all participants can help our mission to raise public awareness of the importance of customer due diligence and public education about the risks of economic crimes, which everyone can help combat.”
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