Less than two-thirds of businesses (59 percent) are taking strategic action to move towards net zero carbon emissions, according to a recent survey conducted by the Institute of Chartered Accountants in England and Wales (ICAEW).
The research, which measured responses from across the ICAEW’s network, also found that nearly a third (31 percent) currently have no such initiatives in place.
“Businesses need to make clear strategic plans for how they will work towards reaching net zero greenhouse gas emissions,” said Mark Billington, international managing director at the ICAEW.
“As trusted business advisers, chartered accountants have a duty to assist with this, helping their organisations measure their work and guiding them to make the right decisions to become more green.”
Billington, however, remains optimistic, with the survey results showing that “there is a positive direction of travel globally”.
The survey also examined why action is not being taken within some organisations, with it finding that a lack of “requirements set by public authorities” was the most cited reason (57 percent) by respondents.
However, the situation is set to change as later this month, as world leaders prepare to attend the COP26 climate summit to set new, stronger commitments to ensure net zero targets are achieved by 2050.
In the UK, the release of the Greening Finance report lays out the government’s ambitions to drive green and sustainable investment.
“Putting in place sustainability reporting requirements for companies and investors is essential if we are to tackle the climate crisis and address other pressing social and environmental issues,” said Jessica Fries, executive chairman of the Accounting for Sustainability (A4S) action group.
“Standards have an important role to play in making sure that information is presented in a comparable and consistent way by different organisations.”
Billington largely echoed this view in relation to the ICAEW survey, noting how a lack of net zero action due to low requirements is an unsurprising correlation, and businesses need more of a push in this regard, he argued.
“Businesses alone will not be able to solve all the issues associated with climate change, particularly if they are not given an immediate imperative to change,” he said.
“The government and public authorities will need to play a key role to lead the transition to net zero. We want to see well thought out action from the government and appropriate public policy frameworks.”
The Charted Institute of Internal Auditors (CIIA) has taken a similarly strong public stance on the matter in recent weeks, unveiling a new guide to tackling climate change risks for company directors and audit committees.
Published in partnership with the British Standards Institution (BSI), the guide says that internal auditors are in a “strong and unique” position to drive climate change action within organisations.
“With its unrestricted scope and mandate, internal audit is in a strong position to work with company directors to help drive meaningful action on climate change, ensuring that their organisations are fully prepared for climate-related risks,” said John Wood, chief executive of the CIIA.
Remarks were also made by Sir Jon Thompson, chief executive of the Financial Reporting Council, who argued that that the publication of the guide “could not be more timely”.
“I echo the call for company directors to start taking climate risk more seriously,” he said.
Climate-related financial reporting is set to become mandatory for larger organisations from April 2022. The standards will align with the ‘four pillars’ of the Task Force on Climate-related Financial Disclosures’ (TCFD) recommendations.