Why should accountants care about Climate Change?
Friday 5th June 2020, is World Environment Day. It’s a day when we “learn how all living things on Earth are connected in the web of life and how we can act for nature.”
There hasn’t been a time in recent history when we have been more connected in the world than in 2020! The global pandemic has made us acutely aware of the fragility of life, how much stronger we are as human beings when we unite and just how fast how nature can heal when we pause for a moment and give the earth some time to breathe…
It’s very clear that taking care of the environment is hugely important to us all as individuals. But does climate change matter to accountancy? And if so, how can our industry take some responsibility, seize the opportunities and support World Environment Day?
Accountants ‘intrinsic’ to addressing climate change
In a book published this year by Dr Roland Kupers, the subject of climate change and the role of accountants is key in addressing the value of the earth’s assets. Kupers says:
“Every year the management of every firm is called upon by their accountants to state the value of their assets. The accountants ask questions, audit, and then certify the logic with which the assets were valued.
But what is the remaining value of a coal plant? Basically, it is determined by how much money it will make over its remaining useful life. But how long is its useful life? Under any realistic climate scenario, coal plants will either be closed in a more or less congenial way today, or more brutally in the future as the urgency further grows.
Either way, there is a huge range of uncertainty over the value of these plants.
“Climate change matters to accountancy. It matters both directly through the adoption of new rules and regulations that impact companies and their accounts, but also indirectly through the great uncertainties generated from the very lack of adequate rules and regulations.”
In simple terms, sustainability needs to be measured, reported and assured. That’s the job of the accountant. And in turn, business needs to modify its behaviour on the information provided.
So, as accountants, not only are we fundamental to providing accurate information but also steering business towards a sustainable future.
Which is why Dr Kupers insists that “the accountant is intrinsic to addressing climate change.”
Prosperous and sustainable results for accountants
First, we must ask ourselves, what is sustainability? The ICAEW says ‘sustainability describes a world where resources are at least maintained and which does not live by eating into its capital, whether natural, economic, social or human.’
Many believe that the responsibility of the legislation on this issue, has moved beyond Government. And in fact, it is our job as accountants to implement efficiency measures, formulate corporate responsibility policies, design information systems, and assure supply chain processes and procedures.
Clearly, sustainability presents some key challenges and opportunities for accountants. But throughout history, it is our profession which responds to new market opportunities and emerging demands resulting from change.
Garry Howling of Public Practice Recruitment Ltd says:
“When performing company audits, accountants can use their skills to put climate change at the top of the agenda, help prepare for risk and adopt green policies.
It is ultimately the accountancy profession which is in the unique position to ensure companies deliver prosperous and sustainable results for clients and the environment as a whole.”
Public Practice Recruitment Ltd works with a wide range of employers, from the top ten accountancy firms and mid-tier practices, through to independent boutique firms and regional players.
The bespoke recruitment solutions we provide include permanent and interim recruitment, retained search services, and a fully outsourced recruitment option.