Lochie Burke

At COP26’s climate talks we have seen government officials, finance leaders, green activists and corporate icons on show. The world’s auditors and accountants have been underrepresented - And this is a great mistake.

The corporate and government promises coming from the discussions have sometimes sparked just as many questions as answers, but one thing is clear: climate change action is about to put corporate auditors under the uncomfortable — and unaccustomed — glare of the spotlight.

This is because companies are facing rising pressure and requirements to be clear about their emissions and other associated environmental and social impacts. However the sustainability consulting guide for measuring this is still fluid, at the best of times. Ownership now lays with auditors to make judgment calls about ESG issues, these are judgement calls that they didn’t sign up for in their job roles.

In understanding why this matters we can take a look at two announcements in Glasgow this week: ISSB (International Sustainability Standards Board) and Gfanz (or Glasgow Financial Alliance for Net Zero).

Mark Carney, the former Bank of England governor, announced that 450 global financial institutions managing $130 Trillion USD of assets had joined Gfanz, and pledged to use their financial influence to drive decarbonisation and meet net-zero emission targets by 2050.

Now, to be fair many Green activists (correctly) have made light of the fact that this tremendous  $130 Trillion figure likely includes double-counting. As always it is still unclear how much truly meaningful change will be driven in the short term by these long term goals.

Fears of greenwashing are certainly valid, however the announcement shows the speed that corporate finance is changing. As lenders come under pressure to prove their green credentials. 

Remember, just seven months ago, when the Gfanz was started, it only had a measly $5tn assets.

Investors need to understand that this change is flowing onto the lenders and companies.

However, the pressure to take on net zero pledges will surely spread through all sectors. While investor and social pressure has been more highly placed on listed companies it is on the horizon that targets be imposed on private capital and businesses too.

It is still not clear what will happen in the meantime from a reporting, accounting and auditing perspective or whether the US or China will adopt the proposed eventual global framework. 

There is considerable uncertainty/expectation on the future projections of carbon emissions and carbon prices, with some experts expecting 3x increases over the next couple of years..

What we can say is that reducing carbon emissions is the best solution to the growing pressures of climate change in both the environment and economic lenses. Carbon offsetting is not a viable long term strategy for businesses as carbon emissions become carbon liabilities.

Meanwhile you can take a look at the important updates from the COP26 summit here.


CONTINUE READING

Our Latest Articles & Updates

News

COP26 Key Updates

International lawmakers, business leaders and activists convened in Glasgow, U.K. on Tuesday in the final week of the COP26 climate summit.

Learn More
Article

The story of the River Rangers charity and the plans for the future

The River Rangers commenced at the southernmost end of the Hooghly River - a long distributary of the Ganges River when NetNada and Y-East decided to partner in an effort to tackle river sourced ocean pollution.

Learn More
Article

Caroline Pidcock’s deliberations on going to COP26 Glasgow

Caroline Pidcock shares her dilemma in deciding to go to Glasgow #cop26 and some of the things we need to think about as we embrace the future we need.

Learn More
Article

The drinking water of the future

Recycled water for drinking, or “the drinking water of the future” has been in use in multiple countries and cities around the world – Singapore, Namibia, Perth, and San Diego. In San Diego, a simple water treatment system purifies wastewater into water fit for drinking.

Learn More
Article

Bjarke Ingels Group Designs Telosa's Urban Utopia

A plan for the world’s most sustainable city has been designed and is expected to welcome its first residents by 2030. Proposed for construction in an undecided desert location in the United States, the city of Telosa is estimated to cost $400 billion and accommodate a population of 5 million.

Learn More
Article

Air Company Wins NASA CO2 Conversion Challenge

Air company, which was founded by Australian Gregory Constantine has just won a huge award from none other than NASA! Air Company is a technology, engineering and design-based company in New York that participated (and won) NASA’s CO2 Conversion Challenge with a project that converts CO2 into sugars to create new resources on Mars.

Learn More
Article

The COP26 Climate Conference

The highly anticipated U.N. climate conference COP26 is at “high risk of failure,” according to U.N. Secretary-General António Guterres. Planned to take place this November in Glasgow, COP26 intends to bring together global leaders to address the climate crisis.

Learn More
News

Is Carbon Capture the Road to Recovery?

The world’s largest plant designed to suck carbon dioxide out of the air and turn it into rock has started running in Iceland, constructed by Climeworks, when operating at capacity the plant will draw 4,000 tonnes of carbon dioxide out of the air every year.

Learn More
Article

Politicians vs water experts: making Sydney potable water reuse a reality

Vastly differing viewpoints exist between politicians and water practitioners regarding their sense of the likelihood of potable reuse uptake in the next 30 years.

Learn More
Article

Businesses are problem solvers, but can they solve the climate crisis?

Businesses by nature are problem solvers as they respond to supply, demand needs and wants in their markets. From a sole trader in a small coffee shop to the board of directors at Starbucks, each day brings a unique set of challenges and requires necessary changes.

Learn More
Article

Sustainable Business - Where is the ROI

Return on Investment (ROI) is the term that is thrown around to identify if and when a company’s expenditure will return a profit, either monetarily or non-monetarily. This is based on spending, speculation, expectation and forecasting.

Learn More
Article

Organics Recycling in your Business 101: How to Properly Recycle Food Waste

Food waste is the elephant in the room. Actually, it is the million-ton elephant in the room! Millions of tons of food go unused in Australia every year and one-third of all food produced around the world is wasted.

Learn More
Article

What is Greenwashing?

As an attempt to capitalise on the growing demand for environmentally sound products, “greenwashers” aim to make their products or services seem healthier, more natural, less wasteful, recyclable, free of chemicals or made of natural resources.

Learn More
News

IPCC report - Code Red For The Planet

The most crucial report card on climate change has been released and it is a concerning reminder we all need to make some changes.

Learn More
Article

How regenerative farming helps lower carbon emissions

Unconventional techniques can sequester carbon while improving the soil. A look into Canada’s advancements in regenerative farming techniques and their positive impacts.

Learn More