Accountants Urge Investment in Environmental Matters
According to a new position paper from the Association of Chartered Certified Accountants (ACCA), global economic instability could lead to a decline in direct environmental investments and reduce the rigor of future climate change legislation.
The report includes recommendations for governments, policy makers and businesses ahead of December's Conference of the Parties (COP15) U.N. Climate Change Conference 2009 in Copenhagen, Denmark.
"The dual challenges of climate and the economy have led to a unique opportunity to rebuild the global markets with systems sympathetic to climate change," said Helen Brand, chief executive, ACCA. "The trillion-dollar bailouts of the banking sector prove that governments and businesses around the world can work together quickly to avert disaster."
ACCA's report recommends that governments should respond to the economic conditions by implementing measures that will encourage environmental investments and a more sustainable approach from business.
"Businesses have a massive role to play here in how they communicate their commitment to a low-carbon economy," Brand said. "ACCA champions the extension of corporate reporting to include the social and environmental aspects of a business and has launched awards for sustainability reporting in Australia, New Zealand, Hong Kong, Malaysia, Pakistan, Singapore, South Africa, Sri Lanka, Canada and the U.S."
The recommendations include:
- A new agreement must consist of a shared vision and contain a clear regulatory framework that is valid, ideally until 2030 or 2050.
- Business has a key role to play in tackling climate change; governments and supranational bodies should take steps to support them by developing a portfolio of fiscal instruments designed to internalize sustainability impacts in international trade treaties and reviewing the incentives provided by small and medium enterprise corporate taxation systems to increase the propensity of this sector to invest in cleaner technology.
- The level of effort and commitment from developing countries will need to reflect their national circumstances, but they too will need to take action with appropriate support from developed countries, to put themselves on track to a low carbon economy. Also, for Kyoto's successor to succeed, both the US and China have to sign up to it.
- The European Union Emission Trading Scheme (ETS) must only be linked with systems that are robust, in order to avoid undermining the integrity of the scheme.
- A global carbon market must be completely measurable and verifiable, with clear requirements for monitoring and reporting as per the Bali Roadmap, including the production of regular emissions inventories by both developed and developing countries. An effective compliance system must be developed to enable transparent and verifiable comparison of the climate change efforts of the different countries.
- Governments should continue to urge organizations of all sizes to produce appropriately structured carbon reports. Supranational bodies should recommend public carbon reporting, based on the GRI guidelines.
- As part of their wider Corporate Social Responsibility (CSR) program, environmental regulators should work with international accounting standard setters to develop a universally applicable climate change reporting standard for organizations of all sizes.
- Governments should review the incentives provided by small and medium enterprise corporate taxation systems to increase the propensity of the sector to invest in cleaner technology and should produce guidance to help it measure key environmental and social impacts. "ACCA is concerned that without a coordinated strategy to tackle the financial crisis with sustainable efforts, the possibility still exists that stimulus and recovery packages may lock us into the root causes of climate change," Brand said. "If we follow the model of the banking bailout, we can achieve a sustainable, low-carbon, climate resilient future."
Taking place from Dec. 7-18, COP15 is a major convening of 192 international governments to discuss international protocol on climate change.