- HRH the Prince of Wales had a special message for accountants at WCOA 2018 on their purpose
- Ban Ki-Moon encouraged accountants to hold their leaders accountable for action on climate change
- Governor Carney had important messages on the link between climate change and financial stability
Ban Ki-Moon and HRH The Prince of Wales at WCOA
High-profile speakers, including former UN Secretary-General Ban Ki-Moon, His Royal Highness, the Prince of Wales and Mark Carney, Governor of the Bank of England, have put climate change, and the role of accountants, front and centre.
You are unlikely to have missed that last month, Chartered Accountants Australia and New Zealand hosted the World Congress of Accountants (WCOA) in Sydney.
One of the most anticipated sessions of the week was the shared panel that featured former UN Secretary-General Ban Ki-Moon. Moderated by renowned Australian journalist Tony Jones, and panellists Yanis Varoufakis, Alison Martin, Keren Elazari and Ki-Moon discussed the 2018 World Economic Forum Global Risks report, the threat of climate change and what being a global citizen really means in the 21st century.
"Getting climate disclosure right will mean that investment flows to firms which are managing the risks and seizing the opportunities."
The session opened with a surprise video address to WCOA from His Royal Highness, the Prince of Wales. HRH centered his comments on why 'purpose', a key theme for WCOA, is so important to accountants. In particular he noted the role of accountants in contributing to the achievement of the Sustainable Development Goals (SDGs) and that the time to act, in the public interest to create a sustainable future, is now.
Ban Ki-Moon began with strong support for the IPCC's recent report looking at the different impacts of both 1.5 degrees and 2 degrees of temperature rise.
"Climate change is happening much faster than what people may think." He specifically commented on the poor ranking of Australia in its action around climate change and sustainable development compared to other OECD nations. "Australia should lead by example."
Ban Ki-Moon ended the session with a special message for the room of 'world-class accountants': "Make sure you hold your government, your creative leaders and world leaders accountable!"
HRH speech to A4S summit
Chartered Accountants ANZ were represented at Accounting for Sustainability's (A4S) Annual Forum at St. James Palace in London. We are foundation members of A4S's Accounting Bodies Network of A4S, which celebrated its 10 year anniversary at this year's forum.
HRH the Prince of Wales was also celebrating a significant milestone of his own, turning 70 the week before the forum. In his speech, His Royal Highness commented that his birthday provided him the opportunity to reflect on how much the world has changed over the last seven decades and how much progress we have made in many areas. He noted that it has also underlined just how much social and economic progress has been at the expense of the environment.
He went on to comment that those organisations who adopt more sustainable business models will uncover new opportunities and reduce their risks. These companies are going to require ever more robust data on which to base decisions. "Who is better placed than accountants to provide them with this information?" he said.
"A4S helped to inspire the creation of the Task Force on Climate-related Financial Disclosures, which I understand is now having a significant impact on the disclosure of risks and opportunities to the market," he said after referring to the IPCC's report.
His Royal Highness noted that the transition to a sustainable future will not be easy, but is utterly essential for the ultimate viability of life as we know it. "We simply have to ensure that our economy is in harmony with nature's own economy. So it will require every one of us to work together to future-proof our economy, our organisations and, ultimately, our very survival. So ladies and gentlemen, the time for action is right now."
Mark Carney, Governor of the Bank of England
HRH the Prince of Wales speech was followed by an address by Mark Carney, Governor of the Bank of England. Governor Carney noted the role of the HRH four years ago, asking what regulators were doing about climate-related risks and their serious financial impacts.
Governor Carney commented that the longer meaningful adjustment is delayed, the more transition risks will rise. To deliver on the Paris Agreement commitments and limit temperatures to 1.5°C, he said carbon emissions would have to decline by about 45% from 2010 levels to 2030 to reach net zero around 2050. "Even if this happens smoothly, it will have major implications for most sectors of our economies. If the transition is delayed and then happens abruptly, financial stability risks will rise considerably."
Governor Carney noted that, "given this combination of immediate physical risks and prospective transition risks, the Bank of England has become increasingly active consistent with our financial stability and prudential mandates."
He commented that the Bank of England's latest report found that the majority of banks are starting to treat the risks from climate change like other financial risks - rather than viewing them simply as a corporate social responsibility issue. He also noted that these risks are beginning to be thought about at the board level. Banks have also begun considering the most immediate physical risks to their business models – from the exposure of mortgage books to flood risk, to the impact of extreme weather events on sovereign risk.
Governor Carney also reflected that the transition to a low-carbon economy will bring unparalleled opportunities for those companies minded to seize them. There is an estimated US$90 trillion of low-carbon infrastructure investment expected between 2015 and 2030, therefore smart decisions now can make sure that investment is both financially sound and environmentally sustainable.
By getting climate disclosure right, Governor Carney noted that investment will flow to those firms which are managing the risks and seizing the opportunities.
During the opening session of the A4S summit, CFOs of leading organisation's including Salesforce, Brookfield Asset Management and SSE plc, discussed the important role of business in delivering the SDGs and why sustainability needs to be embedded into decision making. Mark Hawkins, CFO Salesforce, concluded by noting that 'the single biggest challenge is mindset.'
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