40% of UK businesses and organisations have no plan in place to reduce business related carbon emissions despite the climate emergency, as revealed in a new report from leading financial professional bodies.
As world leaders gather for COP28, ACCA (the Association of Chartered Certified Accountants), IFAC (the International Federation of Accountants) and professional services firm PwC (Pricewaterhouse Coopers) have released a new report: The role of the CFO and finance function in the climate transition: Driving value and sustainability.
In the recent survey, research reveals that almost half of UK respondents (40%) have yet to produce a plan for reducing their carbon emissions that result from business activity. Alarmingly, nearly 70% of those respondents without an emissions plan say they currently have no intention of developing one.
The survey data indicates that there is a need among businesses to educate and implement when it comes to emissions plans which should form part of a wider sustainability-first approach to business. While finance teams may not always be the ‘owner’ of the sustainability agenda, in many organisations this role is increasingly falling to the CFO. Ensuring they are equipped with the right tools to evaluate and implement effective sustainability strategies for their business is vital to the long-term economic success if businesses are to thrive in a world of climate change.
Lloyd Powell, head of ACCA Cymru Wales, said:
“The survey data revealed in this report perhaps suggests challenges in awareness of the importance of transition planning, rather than a deliberate choice not to engage with sustainable planning. Finance professionals can play a vital role in supporting sustainability plans through their reporting functions, and in helping make sound decisions for future investment in green business decisions.
“In a week when the Welsh Economy Minister announced just transition and green prosperity as one of the four priorities for the Welsh economy, this report highlights the work to be done in engaging finance professionals in all sectors to understand the role they can play in this process which can make a huge difference in green decisions for the future.”
Helen Brand OBE, chief executive of ACCA, said:
“The accountancy and finance profession can enable organisations to achieve their net zero ambitions in a fair and inclusive way. They can also support the just transition to a low-carbon economy by helping their organisations to seize the associated business benefits. As COP28 begins, this report is a call to action for professional accountants everywhere to play their part in helping their organisations to reduce their carbon emissions and support the climate transition.”
Asmaa Resmouki, president of IFAC, commented:
“The expertise of accounting and finance professionals in combatting climate change is absolutely essential if we are to make the progress the planet so desperately needs.
“This report corroborates IFAC’s prior research into corporate disclosures on emissions targets and transition plans for achieving them. Companies need to improve the decision-usefulness of their transition plans and how they communicate them to stakeholders.”
David Russell, finance transformation leader, PwC, added:
“This report highlights a critical gap where some businesses lack a clear roadmap to meet their emissions targets and the ability to measure and report progress against their goals. It’s imperative for finance leaders not just to drive the change towards sustainability but also to build trust in the reporting of progress towards sustainability goals.
“CFOs can play a pivotal role in integrating environmental considerations into strategy, planning and reporting – ensuring that businesses not only contribute positively to the climate agenda but also adapt and thrive in a rapidly changing economic landscape.”
For CFOs themselves, balancing the short-term operational priorities of the finance team whilst simultaneously upskilling and equipping the team to support the wider organisation’s net zero initiatives must now be a critical imperative. The research recommends that finance teams need to develop the right skills and expertise in this area of green finance and sustainability reporting for clarity and insight into a business’ green transition plans.
Visit ACCA's website for more information.
