Research from ACCA (the Association of Chartered Certified Accountants) among 87 accountants and finance professionals in Trinidad and Tobago reveals that just four per cent of the organisations they work for have set targets to be net zero compliant by 2050.
But the good news is that 78 per cent in TT say their organisation will be willing to invest much more than today in addressing climate change over the next three to five years – compared to just 38 per cent globally.
These startling facts in ACCA’s new report Climate action and the accountancy profession: building a sustainable future come ahead of the COP26 summit which begins on October 31 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, said: "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.
Shelly-Ann Mohammed, head of ACCA Caribbean, added: "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."
For TT, the report reveals that:
• 16 per cent integrate climate key performance indicators (KPIs) into their business strategy and/or risk frameworks.
• 15 per cent say that climate change considerations play a significant role in financial decision-making in their organisation.
• 75 per cent say the impact will come through physical effects of climate change such as changing weather patterns, extreme heat or flooding.
• 40 per cent believe climate change regulation – in the form of climate pricing or new reporting requirements – will impact their organisation over the next five years.
• 72 per cent say it’s important that their future career involves taking action on climate change.
• 76 per cent 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 (59 per cent) 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 (34 per cent), a lack of support from leadership (47 per cent), poor data to work with (28 per cent), and their own lack of professional skills in the area of expertise (16 per cent) were also seen as barriers. Only 12 per cent said there were no barriers.
Mohammed concluded: "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.