Good intentions are ‘disconnected from the pace of climate action that is urgently needed’, says new research
Research among 117 accountants and finance professionals across the Middle East reveals that just 14% say their organisations have set targets to be net zero compliant by 2050. However, looking ahead, a significant 69% say their organisation will be willing to invest much more than today in addressing climate change over the next three to five years.
These results are included in ACCA’s report Climate action and the accountancy profession: building a sustainable future, published ahead of the COP26 summit which begins on 31 October 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, says: ‘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.
Fazeela Gopalani, head of ACCA Middle East comments: ‘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.’
Other findings for the Middle East show that:
- Only 24% integrate climate key performance indicators (KPIs) into their business strategy and/or risk frameworks.
- 40% say that climate change considerations play a significant role in financial decision-making in their organisation.
- 49% say the impact will come through physical effects of climate change such as changing weather patterns, extreme heat or flooding.
- 52% believe climate change regulation – in the form of climate pricing or new reporting requirements – will impact their organisation over the next five years.
- 68% say it’s important that their future career involves taking action on climate change.
- 76% 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 (52%) 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 (50%), a lack of support from leadership (39%), poor data to work with (37%), and their own lack of professional skills in the area of expertise (14%) were also seen as barriers.
Fazeela Gopalani concludes: ‘While some of these findings are concerning, there are clear opportunities which our members in the Middle East see ahead. There is 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.