Green accountants to the rescue!
The climate emergency is real. According to research from the Intergovernmental Panel on Climate Change, the global community requires urgent action to avoid the worst impacts of climate change.
In the TV series, when the Planeteers cannot resolve a situation alone, they combine their powers to summon Captain Planet. It showed that a diverse group of people can work together to enable someone like Captain Planet to become a champion for the environment. Today, stakeholders have united in their call to CFOs and their teams to connect diverse groups, internally and externally, to tackle environmental and social issues.
Accountants must play three distinct roles:
1. Net-zero-budget ninjas: As businesses step up their ESG efforts, they need a more evidence-based approach that measures, monitors, and reports their impact objectively. This imperative underlines the need for accountants to own their company's carbon budgets and be real climate warriors.
As more global businesses commit to achieving a net-zero impact – which they can deliver by reducing their carbon footprints or offsetting carbon – accountants play an indispensable role in tracking progress and holding stakeholders to account. And because carbon emissions and carbon-credit accounting regulations differ across geographies, industries, and the size and nature of operations, green accounting calls for specialized skills. To develop these capabilities, many leading organizations are collaborating with institutes and strategy consulting organizations for reskilling and training
2. Rightful owners of the 'books of impact accounts': We're at the cusp of adopting a new approach by which businesses measure, monitor, and evaluate transactions in monetary terms as well as by their impact on the environment and society. As accountants have a view of both sides of their companies' net-zero equations – the positive and negative impact on the environment – they are best positioned to balance the organization's environmental profit and loss through carbon accounting principles and guidelines. This calls for organizations to maintain a new book of accounts and deliver investor-grade information on ESG measures, backed by verifiable data gathered through well-defined processes. To gather this data, organizations must embed sustainability metrics across business processes in key functions including finance, operations, and supply chain. This requires green accountants to possess advanced collaboration and communication skills to engage with internal and external stakeholders and provide a complete view of a company's performance that informs both operational and strategic decisions.
3. Evangelists for sustainable governance: In the absence of standardized reporting frameworks, organizations find it a challenge to collect verifiable and comparable ESG information, making it difficult to distinguish real performance from greenwashing. The good news is that the global regulatory environment is moving swiftly to agree on reporting rules and standards that better serve enterprises and investors.
CFOs and their teams must incorporate rapidly evolving ESG reporting requirements into their regulatory frameworks and operations at speed and scale. In addition to keeping a close eye on disclosure metrics, accountants need to support their teams in balancing financial and ESG materiality, incorporating anticompetitive practices, improving ESG risk management, and engaging with regulators