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Chartered Accountants can be ‘difference makers’ in the climate change battle

Author: ICAEW Insights

Published: 29 Apr 2021

Young leaders in finance and business have a pivotal role to play in helping organisations understand and tackle the climate-related risks and challenges they face, the Minister for Business, Energy and Clean Growth, Anne-Marie Trevelyan has said.

Speaking at an event hosted by FinBiz2030, a joint initiative between One Young World and Chartered Accountants Worldwide dedicated to achieving the UN Sustainability Development Goals by 2030, Trevelyan – herself an ICAEW-qualified Chartered Accountant – called on members of the profession to be the “difference makers” to galvanise action among the business community.

“Climate change poses risks to companies, financial institutions and individuals alike. The physical and transition risks can have a material impact on the value of companies and their assets,” Trevelyan warned. And as trusted business advisers, it was the role of accountants to help companies understand and communicate the risks and opportunities they face, she added.

Trevelyan, who in November was also appointed as the UK International Champion on Adaptation and Resilience for the COP26 Presidency, called on organisations to join more than a third of the FTSE 100 and the Big Four accountancy firms by signing up to the UN’s Race to Zero campaign

“It means asking businesses to set net zero targets by 2050 at the latest, it means committing to credible short-term action plans that are independently validated and it means taking action to uphold the policies that promise to keep our planet safe,” she said.

A report from the Intergovernmental Panel on Climate Change, says that warming of 1.5 degrees Celsius, increasingly considered by scientists as a climate-stabilizing limit, would nonetheless inflict $54 trillion in damages by the end of the century.

Bearing in mind the growing risk and cost that carbon presented to companies, Trevelyan said disclosure was key to supporting investment decisions and allowing the transition to a low carbon economy.

“As young professionals, you shape this greener future through your work and the wider economy you will be working in. I’m calling on you to take this message far and wide within your firm and with clients. Industry leaders on a pathway to resilient and green growth as we emerge from a pandemic. As the generation who will take this forward, you will provide a unique and persuasive argument for acting today, not waiting until tomorrow.” 

The pace of commitment and action from all parts of the world is continuing to build ahead of COP26, Trevelyan said. Speaking at a virtual Earth Day climate summit, President Biden pledged to reduce US greenhouse gas emissions by at least 50% by 2030. Meanwhile, 43 banks with assets of $28 trillion last week [21 April] formed the Net-Zero Banking Alliance (NZBA) and committed to aligning operational and attributable emissions from their portfolios with pathways to net-zero by 2050.

Also speaking at the FinBiz2030 event, ICAEW CEO Michael Izza called on accountants and the businesses they worked for to be ambitious in achieving net zero targets. “2050 is not good enough,” Izza said. “We need to be bringing that in as a goal and a target and making a hell of a lot of noise. We need to act and we need to bring that date in by decades and not years.” 

As part of its ongoing commitment to sustainability, ICAEW has now created the Sustainability and Climate Change Community. Its purpose is to provide inspiration, insights and collective ambition for professionals delivering on sustainability and acting on climate change. Join for free today.

Are you professionally ready to mitigate the risk and maximise the opportunity of climate change? Find resources, information and inspiration on the ICAEW Climate Hub.