Organisations urgently need to set net zero targets and the pathways to achieve them
Global research among 3,000 accountants and finance professionals
reveals that just 15% say their organisations have set targets to be net
zero compliant by 2050 – and only 38% say their organisation will be
willing to invest much more than today in addressing climate change over
the next three to five years.
These illuminating facts in ACCA’s report Climate action and the accountancy profession: building a sustainable future come ahead of the COP26 summit which begins on 31 October in Glasgow, Scotland.
The key findings and the opinions from participants from both the
public and private sectors, in organisations large and small, reveal the
gap between the good intentions of organisations, and the urgent and
speedy need for climate action.
Helen Brand OBE, chief executive of ACCA, says: ‘There’s a critical
need for leaders, whether in governments, the private or public sectors,
to grasp the scale of this challenge and to respond to it. The
accountancy profession has a critical role to play in this, both to lead
long-term value creation in sustainable economies, and to champion
responsible practices for the public good.’
The report highlights that accountancy and finance professionals can
bring an integrated approach that places sustainability at the heart of
organisational decision making, rather than it being an additional
consideration. This approach links strategy and governance to
data-driven decision making and rigorous measurement of performance
using science-based targets, coherent reporting and trustworthy
assurance of information used by stakeholders.
Narayanan Vaidyanathan, head of business insights at ACCA, comments:
‘Very few organisations are progressing at the pace and scale needed to
counter the devastating and world-altering threats climate change is
posing. Organisations must leverage the expertise of accountancy and
finance professionals to increase the pace of climate action. This is
needed to future proof their organisations and to deliver value while
coexisting with natural ecosystems.’
The report reveals that:
· Only 23% integrate climate key performance indicators (KPIs) into their business strategy and/or risk frameworks.
· Only 29% say that climate change considerations play a
significant role in financial decision-making in their organisation.
· 48% say the impact will come through physical effects of
climate change such as changing weather patterns, extreme heat or
flooding.
· 52% believe climate change regulation - in the form of
climate pricing or new reporting requirements - will impact their
organisation over the next five years.
· 73% say it’s important that their future career involves taking action on climate change.
· 75% say it’s important that accountancy and finance teams
are involved in supporting their organisations to tackle climate change.
Despite the appetite of finance teams to support their organisations,
they also feel that there are barriers to be overcome – the most cited
one (54%) being an internal organisational perception that climate
action was not viewed as the responsibility of the finance team. Lack of
commercial incentive around climate action (36%), a lack of support
from leadership (32%), poor data to work with (28%), and their own lack
of professional skills in the area of expertise (23%) were also seen as
barriers.
Narayanan Vaidyanathan concludes: ‘While some of these findings are
concerning, there are clear opportunities. We see ahead a new purpose
for organisations, a new way for them to operate, and an opportunity for
accountancy and finance professionals to provide leadership. Their
ability to drive strategy and decision making by connecting financial
and non-financial information into a coherent narrative, ethical lens,
and trustworthy assurance of information will play a key role. Our
report includes practical tips and guidance on reshaping organisations
for a post-fossil fuel economy and the skills and mindset needed for
this.’
As part of its commitment to the UN SDGs ACCA aims to become net zero by 2030. It will report on progress in its annual integrated report. As a member of the A4S Accounting Bodies Network (ABN),
ACCA has also joined 12 other accountancy bodies to commit to achieve
net zero greenhouse gas (GHG) emissions within their own organisations,
as well as provide an enabling environment for their membership to do
the same.
The report can be downloaded here: https://www.accaglobal.com/gb/en/professional-insights/pro-accountants-the-future/climate-action-accountancy-profession.html
ACCA
© ACCA - Association of Chartered Certified Accountants
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