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When Chartered Accountants Save the World

Adair Turner: The mistakes we’ve made on climate, and where to focus now

Author: ICAEW Insights

Published: 11 Nov 2021

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The inaugural chair of the Climate Change Committee explains how the climate crisis breaks down into two distinct problems and discusses our chances of resolving them.

As well as being the first chair of the UK’s Climate Change Committee – a statutory body established under the 2008 Climate Change Act – Lord Turner has been chair of the UK’s Financial Services Authority and is now chair of the Energy Transitions Commission, a group of CEOs and other senior executives in the energy sector collaborating on ways to reach net-zero emissions by 2050. 

He argues that the climate crisis can be divided into two major challenges. The first is decarbonising the world’s energy system; removing carbon emissions from anything to do with generating, storing or using power. He says he’s “optimistic that by mid century we’ll have technologies available which will enable people throughout the world to enjoy prosperous living standards in a completely green, low carbon fashion.”

But despite this rare beacon of hope among all the doom-laden predictions, he’s careful to caveat his optimism. Although with the right investment and decision-making, we’ll solve this problem by 2050, “we’ve left it too late,” and so we will have to change our lives – what we eat, how much we travel, what we consume etc – until we establish this new energy system.

He is also far less optimistic about the second challenge posed by the climate crisis. This is “the impact of our food and fibre systems, everything that depends on photosynthesis … and the climate change impacts of that.” There is clearly yet no technology yet that can help us meet the demands we make on the planet to feed and clothe ourselves without continuing to destroy carbon sinks, such as the Brazilian rainforests, and producing more greenhouse gases, particularly the methane that comes from cows used to produce beef and dairy products.

Given there is no technology yet to solve this problem, this will also undoubtedly require changes to what we eat and what we consume.

Beyond this, companies and governments must set and report progress on highly specific, realistic targets, so that when people say, ‘My emissions are this, and I will reduce them by 15% this year’ then that is as close as possible to a fact.

This verifiable, auditable information should drive decisions and the allocation of capital, and chartered accountants have a key role to play here. As Turner says, partly this auditable information depends upon “good information at the next level down. If every company to which every bank in the world has good auditable information on what its CO2, and methane and other greenhouse gas, and biodiversity footprint is, and whether its got plans to reduce it, and whether it’s reducing it.” Understanding all this, and making decisions based on it, is where “the really big challenges come,” he says.