Only 15% of accountancy firms have net zero targets
Only 15% of accountancy firms have set specific targets to be net zero compliant by 2050, finds research by the Association of Chartered Certified Accountants (ACCA)
The global survey asked 3,000 accountants and finance professionals about their firm’s net-zero plans and found that only 38% stated that their organisation will be willing to invest more to address climate change over the next five years.
According to ACCA’s report, Climate action and the accountancy profession: building a sustainable future, 73% of firms conclude it is important to take action on climate change, with 75% saying it is important that accountancy and finance teams are involved in tackling climate change.
However, ACCA states that the findings and opinions show ‘just how disconnected the good intentions of organisations are from the pace of climate action that is urgently needed’.
Only 23% of firms integrate climate key performance indicators (KPIs) into their business strategy or risk frameworks, with 29% saying that climate change considerations play a significant role in financial decision-making in their organisation.
Narayanan Vaidyanathan, head of business insights at ACCA, said: ‘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.’
ACCA highlights that even though many of the respondents want to support their firm in their climate actions many also feel that there are ‘significant barriers’ in doing so.
The most listed barrier at 54% was that it was not viewed as the responsibility of the finance team. Other reasons cited were a lack of commercial incentive around climate action, absence of support from leadership, poor data to work with, and their own lack of professional skills in the area of expertise.
Vaidyanathan added: ‘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.’
ACCA states that the key findings from participants from both the public and private sectors, in organisations large and small, reveal the ‘urgent and speedy need for climate action’.
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.
In its report, ACCA includes guidance for the next steps firms should take in their net-zero plans with the first recommendation being that accountants should work in playing the ‘lead role’ in pushing and supporting their organisation’s boards to implement a net-zero plan which includes key targets that would need to be achieved by 2030.
It also suggests that accountants should also work to incorporate climate risk, net-zero and, environmental, social, and governance (ESG) into the heart of the organisation.
ACCA also recommends that firms ensure that financial and non-financial reporting is connected and integrated within a ‘clear narrative’ and should foster integrity and trust in sustainability-related information to avoid greenwashing.
Firms should also expand their understanding of ‘in-scope’ issues to get involved with and increase the awareness of them by providing education to their entire organisation.