Climate risks and broader sustainability issues are becoming a core focus for boards and businesses whether through stakeholder pressure or internal factors.
Globally, investors and stakeholders are basing crucial decisions on climate-related risk disclosure. Organisations are facing ever-louder calls to take these risks seriously, integrating them into the risk management and reporting processes.
In Australia and New Zealand, regulation of climate risk disclosure is developing quickly. The pace of change means it's important that practitioners are proactively looking at how they can support businesses as they adapt.
Risk disclosure and opportunity
Investor demand for greater transparency and rigour in disclosures and stakeholder engagement are catalysts for positive change. Accountants are particularly well-placed to advise and support organisations in addressing the risks associated with climate change.
This means practitioners should become familiar with climate-related risks and understand the impacts of these risks on an organisation's business model, operations and strategy. Beyond this, accountants will also support the disclosure and assurance of climate-related information.
The Task Force on Climate-related Financial Disclosures (TCFD) has developed a set of recommendations for voluntary climate-related financial risk disclosures to be made within an entity's financial filings. These recommendations present an opportunity for accountants to support businesses and add significant value. Accountants can use their knowledge and expertise to support businesses in understanding the interconnected nature of the risks and opportunities present, and how to measure and respond to these.
Making a difference
In the face of a climate crisis, collective action can revolutionise the way business is conducted. Chartered Accountants Australia and New Zealand supports a global call to action in response to climate risks and is committed to leading by example and pursuing its own net-zero emissions journey (which you can read about here).
But while mass action is important, change starts with individuals.
To learn more about what you can do for your clients or as part of the finance team, check out the list of resources below.