Accountants should take the lead in fighting climate change
- Wits University
Incorporating climate change accountability into integrated reporting can trigger a global change in climate change thinking.
A recent report suggested that climate change promises by many countries at the Global Climate Change Summit of 2021 have been put on the backburner in the face of other national and international crises.
While many climate change initiatives are often confined to well-meaning groups that are truly passionate, they lack financial muscle or strategic plans. The accounting profession in South Africa, led by institutions like the South African Institute of Chartered Accountants (SAICA) and the Independent Regulatory Board for Auditors (IRBA) can take the lead in demonstrating exactly how a strategic, sustainable climate change project can be initiated and executed.
The clock is ticking as the impact of climate change mounts in floods, drought and/or famine. A recent Reuters report, for instance, illustrated that deforestation in the Brazilian Amazon in February 2022 had reached an all-time high.
Sadly, reporting and focus on climate change issues are transient and other crises like the Russia-Ukraine standoff or the Covid-19 pandemic often and easily distracts the world’s focus to what has been called one of the biggest risks the world faces in the not too distant future.
It is for this reason, that I – as a 73-year-old professor in accountancy at the University of the Witwatersrand (Wits University), will undertake a 1100km paddle down one of the world’s most iconic rivers – the Rio Madeira, which is a southern tributary of the Amazon River. By recreating the trip that I undertook 50 years ago, I hope that this initiative will spark a long-term climate change project for accountancy SA.
While situated in distant South America, the Amazon Rainforest can be seen as the world’s lungs, contributing to regulating the global climate. If it is destroyed, the rest of the planet cannot breathe. Since paddling down the Rio Madeira in 1972, the region has changed dramatically. Large-scale deforestation has destroyed thousands of acres of rainforest. What used to be virgin forest on the banks of the river have been completely stripped. By undertaking this journey, me and my fellow adventurists, are hoping to highlight the changes that have occurred in this region in the 50 years and try to commit corporate SA to funding a reforestation project in the Brazilian Amazon.
Our commitment goes far beyond paddling down a river to fund a climate change project, however. This project provides a unique opportunity for the accountancy profession in South Africa to initiate a global climate change initiative. It is important for the corporate world to fully understand that climate change has no geographic borders. What happens in South America, will undoubtably be felt in South Africa – and this will happen sooner than any of us thinks.
Accountancy SA is a world leader in the development of accounting standards, which corporate South Africa must comply to when they develop their annual reports. These integrated reports are designed to include a focus on the corporate social responsibility they bear as the captains of industry.
This responsibility extends to the environment and its natural resources and how they manage these in a responsible manner. Accountancy SA has a unique opportunity to persuade its members to expand this reporting to cover their role to address climate change beyond just their use of natural resources.
In other words members should be asked to account for what they are doing that adversely affects climate change and what they are doing about it. And that especially goes for a global context.
In the words of the famous naturalist, Sir David Attenborough, it is the duty of mankind to save our planet and its diverse fauna and flora. It is even more incumbent on the corporate world to take the lead because they have both the skills and the finances to initiate long term sustainable climate change projects.
Although this project may not evoke the same emotion as an ardent naturalist addressing a crowd with the annual Norwegian seal hunt taking place in the background, it has the possibility to be far more successful. Over time, the enormous cumulative impact of corporate focus in their reporting on climate change will translate into visible progress.
To make this happen, however, the accountancy profession must take the lead. To encourage this, they can push the integration of climate change and corporate risk in their reporting, as well as ensure that corporate social responsibility indexes include climate change as part of the weighting that determines company rankings.
By taking these small, practical steps, Accounting SA can trigger a global change in climate change thinking that has the corporate world and the accountancy profession at its center.
Professor Kurt Sartorius is a Professor in Accounting at Wits University.