LESLEY JOHN, marketing and media relations manager, ACCA
Climate change has rapidly become one of the world’s greatest challenges. Everyone from government to business is taking action to tackle its effects and reduce greenhouse gas emissions that result from the burning of fossil fuels.
The urgency is steadily intensifying as environmental experts around the world are seeing the effect of intensifying weather events. Record rainfall, drier droughts, and longer periods of life-threatening heat are just some of the weather patterns that are having a devastating impact on countries around the world in recent decades.
This past September, Jamaica’s prime minister, Andrew Holness addressed world leaders at the 73rd United Nations General Assembly on climate change and the need to achieve sustainable economic growth; key for small island developing states. Since the global financial crisis in 2008, there have been improvements to global growth and levels of unemployment have fallen. However, in many developing economies like those spread out across the Caribbean, there has been uneven growth. For Jamaica in particular, economic growth has encountered challenges, including those linked to climate change and extreme weather events.
Hurricane Irma caused catastrophic damage across the Caribbean in 2017. It was the most powerful Atlantic hurricane in ever recorded, causing one of the largest humanitarian catastrophes in history. Holness remarked that the devastation wreaked on Dominica by this hurricane could be compared to a nuclear event. The global cost of climate-related disasters was $320 billion last year.
In the public sector, many government departments work together in a disaster response to save and sustain lives and protect livelihoods. The consequences of not being able to recover from a natural disaster in a timely manner can include loss of reputation in the eyes of public and other government departments, inability to provide timely reporting and the loss of public confidence.
Trinidad and Tobago is by no means immune to climate change and the Ministry of Planning and Development has committed to several initiatives to address the issue including “Undertaking climate change vulnerability and risk assessments in order to provide a comprehensive picture of projected climate change impacts in Trinidad and Tobago in terms of economic cost, impact on lives and finding out which geographic areas and groups are most vulnerable.”
Organisations need to have a robust disaster risk management plan in place. This includes asset and threat identification, quantifying the potential losses, assessment of vulnerabilities, and evaluation of counter measures. It should also include definition of incidents and crisis assessment criteria, escalation procedure; and crisis management team roles and responsibilities. Without effective plans in place, businesses can find it difficult to respond immediately. But it’s important to remember that a plan only works as a safety net to mitigate the impact of a disaster.
The world has come a long way to secure widespread recognition that climate change is one of the biggest risks facing our economies and societies, and even further to have policymakers around the world seeing that it can also be an engine of economic dynamism, replete with opportunities for economic renewal and transformation.
The role for the accountancy profession here is clear: we need to provide leadership and clarity on the economic opportunities to ensure the much-needed transformation away from fossil fuels happens with or without the US.
ACCA and its members will continue to support companies and governments around the world as they finance new opportunities, enhance corporate monitoring and reporting of environmental and social outcomes, and mitigate emerging climate-related risks. The increased severity and frequency of extreme weather events prevents people from recovering before facing the next event, making them more vulnerable to disasters. Accountants will play a strategic role in ensuring investments are made in risk-reduction activities.