25 September 2019

IFAC: Climate action in a climate emergency

Climate change is serious. IFAC and its members encourage professional accountants to contribute to organizational efforts to integrate climate change risk into strategy, finance, operations, and communications.

Professional accountants are becoming a more powerful force for sustainability. This is thanks in part to the shift to responsibly managing and reporting on all of an organization’s resources, including its environmental resources—not just its finances.

IFAC’s members can influence policy and regulatory action for a transition to a low-carbon society. They can support market-based policy initiatives and incentives, consistent and well-considered regulation, and more useful disclosure. CPA Australia’s white paper on “business and the environment” is an admirable example of a member taking action, as is CPA Canada’s series of briefs and case studies.

As market-based climate action, such as carbon pricing, gains traction with the support of IFAC and its members, the pressure on all organizations to adapt to the climate emergency will grow. The Institute of Chartered Accountants in England and Wales has responded well by creating an online “climate hub” for information on the climate emergency.

The world has to act together. International agreements are an important step. IFAC strongly supported the Paris Agreement. It gives a clear framework for international action. It also set the tone for investment and innovation in climate action which, to date, has been woefully inadequate.

Built into the Paris Agreement is “a robust transparency and accounting system to provide clarity on action.” There is little use in an agreement without assessment, and there can be no assessment without measurement and disclosure. That’s where professional accountants come in, at the highest level: developing high-quality information and insights. IFAC is essential to this fight.

Climate risk reporting is also promoted by the recommendations of the Financial Stability Board Task Force on Climate-related Financial Disclosures. Integrated Reporting is also a foundation for better-informed decision-making by investors and lenders. The results of their adoption will be not only more sustainable environmental practices, but also greater long-term value creation.

Full article on IFAC

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