Against the backdrop of war in Ukraine and with a proposed deal on fossil fuels failing to make headway in July, the 2023 G20 summit faces significant obstacles. Nevertheless, its critical mass is hard to overstate. 

G20 economies represent around 85% of global GDP and two-thirds of the world population. Incremental progress could be made in a variety of areas with, for example, the OECD/G20, reporting strong progress in international tax reforms on 17 July. 

As the UK and India inch closer towards a free trade agreement, there is also a focus in both nations on economic cooperation, with India’s presidency of the G20 acting as a catalyst for dialogue. For India, the 2023 G20 presidency is seen as an opportunity to demonstrate global leadership. 

Indian Prime Minister Narendra Modi sees the summit as an opportunity to bring the world together in an agenda for global change, where India maintains close relations with developed economies while understanding the views of developing countries.

Supporting the G20, the Business 20 (B20) provides an official dialogue forum for the G20 leaders with the global business community. The B20 holds its own summit ahead of the G20, where it delivers policy recommendations to the G20. 

This year’s B20 summit takes place on 25-27 August and has the subject of Responsible, Accelerated, Innovative, Sustainable and Equitable Businesses (RAISE). ICAEW participated in the Indonesia B20 in 2022. It joined the Integrity and Compliance Task Force and a number of its recommendations were reflected in the Task Force’s report to the G20. 

The ICAEW Indonesia office hosted a B20 event in Jakarta: Fostering Agility in Measures to Combat Money Laundering. It featured a presentation by Indonesian Finance Minister Sri Mulyani Indrawati, bringing UK and Indonesian AML regulators together to discuss progress around the recommendations in the Task Force report.

At this year’s India B20, ICAEW secured membership of the ESG Action Council, which succeeded last year’s Integrity and Compliance Task Force. It has been appointed as a Network Partner. In support of the B20, ICAEW representatives spoke at the CII Partnership Summit in March this year and have attended Action Council meetings in 1H to contribute to recommendations to the G20. 

The Action Council’s report will be issued at the B20 Sustainability Summit on 22 and 23 August, where ICAEW will be speaking alongside the Network Partners IFAC, Business @ OECD and the Basel Institute for Governance.

The summit comes at a crucial time when policy support by governments, regulators and standard setters is crucial to mobilise capital across international borders to enable social and environmental transformation. Around $5-7trn of investment is needed annually to achieve SDGs, but current investment falls far short. India needs $10trn to finance its net zero commitment by 2070. With $200trn of global assets, the finance is there, but to unlock it will take transparency, trust and integrity.

The accountancy profession can play a strong role in building that transparency, trust and integrity. It is in this context that the ESG Action Council can show leadership at the 2023 G20. As we look ahead to the publication of the Action Council report and the recommendations it will contain, discussion has focused on measures to create credibility, build capacity and ensure strong governance. These include:

1) Creating credibility (in information about ESG performance)

• Independent, robust assurance – setting a reasonable roadmap toward reasonable assurance.
• Legal certainty on the scope of E, S and G assurance that will be required.
• Adopting an established, market-recognised international assurance standard as the base to delivering the assurance required by regulation. Building support from the accountancy profession for the development and adoption of an international standard by the IAASB. Embedding strong ethical standards within the ecosystem.

2) Building capacity (both human and institutional)

• Building expertise at board level for governance and oversight of material ESG matters.
• Creating common capacity building platforms for businesses and regulators to share good practices on ESG.

3) Ensuring strong governance (over ESG management and reporting)

• Recognising the issue of the new G20/OECD governance principles, which now encompass ESG.
• Improving internal controls over ESG reporting, with support from regulatory institutions to create illustrative examples and frameworks.
• Promoting ethical corporate cultures to drive long-term business success. 

Looking ahead to publication of the report, ICAEW Director of Policy John Boulton said: “It’s good for ICAEW to have the opportunity to again support the work of the B20. Although there are significant difficulties in the global economy, incremental progress can be made in 2023 in several areas. Since last year, there is growing recognition of the importance of independent assurance over ESG information. With the need to mobilise huge capital flows to support transition this is one area that could be given greater prominence.”