How accountants can drive climate action

Bringing you the latest news and insights on sustainability and the journey to Net Zero.

Gala Anania Published on Mar 16 2022

Accountancy and finance professionals have a crucial role to play for climate action. They have the skills to help companies understand their climate impacts, reduce their greenhouse gas emissions, report their emissions, manage climate risk, and make their business models more environmentally sustainable.

An ACCA survey reveals that that 75% of accountancy and finance professionals believe that it is important for members of their profession to be actively involved in supporting their organisation’s climate action. Yet, only 15% say their organisations have set Net Zero targets and 29% say that climate change plays an important role in financial decision-making. Here is how accountancy and finance professionals can help drive change.

Eu-Lin Fang, who leads PwC Singapore’s Sustainability and Climate Change practice, argues that accountants play a crucial role in combating climate change by going M.A.D.:

  • Measurement and disclosure: Measuring and disclosing greenhouse gas emissions (aka carbon accounting) is not so different from measuring and disclosing financial activities, and constitutes a natural adjacency for accountants. Indeed, the GHG Protocol includes numerous accounting and reporting principles.
  • Add credibility: Accountants and auditors have been verifying financial and non-financial information for a long time. This can also be done in the area of climate change - for example, ensuring that carbon offsets are delivering on the carbon savings they promise. Independent assurance over climate reporting lends credibility to the organisation’s reporting and climate action.
  • Driving change: The IFRS Foundation Trustees are developing harmonised sustainability reporting standards. The accountancy profession is thus removing a major barrier to climate accountability.

When it comes to driving change, ACCA identifies seven steps accountancy and finance professionals can take to advance the climate agenda:

  1. Get executive level buy-in; put climate risk on the board meeting agenda
  2. Support boards and executive leadership in Net Zero transition plans
  3. Place ESG and Net Zero at the heart of organisational strategy, by expanding strategic considerations beyond financial returns and competitive advantage and pricing climate risks into the strategy
  4. Take a holistic approach to decision making: integrate ESG, climate KPIs and risk considerations into decision-making, and identify and source ‘decision relevant’ data
  5. Report meaningfully on financial and non-financial information, ensuring that both are connected and integrated within a clear narrative
  6. Foster integrity and trust to minimise greenwashing
  7. Increase awareness and education, by expanding understanding of ‘in-scope’ issues

It is clear that accountancy and finance professionals want their organisations to take climate action. They are in a strong position to provide climate leadership, so all that remains to be done is to use that position.

By Gala Anania, Climate Evangelist at myFootprint