It was Welsh coal and iron which powered the Industrial Revolution, and Welsh workers who provided the skill, sweat and sinew which changed the world forever.
We now live in an age when Wales is finding a new role in the world economy, where we are developing and adopting new technologies and building news businesses which are more appropriate to the needs of the 21st century. So from the ironworks of Blaenavon (well worth a visit if you haven’t done so already!) we fast-forward to the semiconductor foundries clustered around Newport.
Alongside technological change, one of the major driving forces behind this need for transformation is, of course, climate change.
It is clear to all but the wilfully obtuse that the indiscriminate burning of fossil fuels warms the planet, melts the polar ice-caps and raises sea levels – with catastrophic consequences which threaten extreme weather events, devastation of habitats and the sustainability of planet Earth as a fit place for human life.
Here in Wales, a climate emergency was declared nearly two years ago by the Welsh Government, and last month the Senedd approved a net zero target for 2050. Net zero means balancing the greenhouse gas emissions with the gases being removed from the atmosphere. Wales also has interim targets for 2030 and 2040 and a series of five-year carbon budgets, with the second, running from 2021-25, targeting an average 37% reduction against the baseline years.
Political parties vying for our votes in May’s Senedd elections have rightly pledged, to varying degrees, to support climate change action and to support the growth of green jobs in Wales – opportunities to rebalance our economy and use clean energy solutions.
These actions and promises of action show the shared commitment to act in the face of this impending threat. That is why the events around global Earth Day last week had more impact than ever.
This year’s Earth Day was themed ‘Restore the Earth’ and ACCA members marked the occasion by focusing on the vital role the accountancy profession plays in climate action.
This has now become a major focus for the COP26 conference in Glasgow later this year, which will bring together governments from all over the world in an attempt to turn the tide.
It will be interesting to see how far the COP26 discussions will make progress on the key issue of financial disclosures and climate change. There is a growing clamour that business should be legally obliged to include environmental impacts in their financial reports. At the moment, most measures are voluntary.
You may be thinking that accountants seem an unlikely group to be at the vanguard of addressing climate change.
However, accountants have a vital role to play in this process because they are in the best position to monitor financial performance and balance it against costs to the planet. Back in September 2020, ACCA participated in Climate Action Week, including co-hosting a global webinar called Creating Value in a Climate Emergency: Recovery, Resilience and the Transition. We were joined by Mark Carney, former governor of the Bank of England and now a UN special envoy on climate action and finance. He told the meeting that the accountancy profession is “absolutely essential” in achieving climate action and building a sustainable recovery. And for that to happen, Mr Carney stated how “every financial decision can take climate change into account.”
This is where the the accountancy profession can bring its expertise into play, with its technical skills and knowledge to measure and report on progress on climate disclosures and the UN Sustainable Development Goals (UNSDGs).
ACCA has a long track record in promoting sustainability reporting. ACCA believes businesses would achieve a more sustainable performance if they embraced transparency and effectively measured their impacts. This is why ACCA was so eager to celebrate Earth Day, and it is why we have made our own commitments to the UNSDGs. These include committing to net zero carbon emissions by 2030, and working in partnership to build an inclusive global profession that supports the development of ethical, sustainable and successful businesses and economies.
As a global body which represents finance professionals in 176 countries, we see it as our duty to put forward a strong case for a new approach to doing business. We believe in a new way of keeping score in business, and measuring success not just on financial results, but also on a business’ contribution to society and its care for a sustainable world – we want to see an integrated approach. At a practical level, we’ve provided practical advice to accountants working within organisations of all sizes and in all sectors as to the steps they can take to make a positive social and environmental impact via our Sustainability Hub.
We believe sustainable development will increasingly lie at the heart of value creation, and businesses which don’t accept that will be left behind. The stakes are too high for us to do anything else.