Chartered accountants can play a role in the fight against climate change. In fact, the Chartered Professional Accountants Canada (CPA Canada) organization, like other associations around the world, has invited its 217,000 members across the country to support their enterprise in mitigating climate change by assessing its potential impact on performance.
CPA Canada believes that accountants can create, foster and maintain sustainable value and present information on that value to ensure that the organization’s adaptation actions are profitable. Accountants can achieve this in five steps.
Incite action
CPAs define the risks and prepare a business case for taking action. According to Peter Vallieres, CPA, CA, Director, Financial Information and Accounting, at Horizon Utilities Corporation, this analysis treats climate change as a disaster risk.
“All established risks are prioritized using a detailed matrix that takes into account both the likelihood of an event happening and its impact on the organization,” he notes.
Prepare an action plan
CPAs estimate the costs and benefits of various solutions and find ways to finance them. They must take climate change considerations into account when budgeting for tangible capital assets that may be affected.
Implement the plan
At this stage, organizations implement the recommended solutions with the help of technical experts in engineering or biology. The role of CPAs is to participate in managing and financing the plan.
Assess performance
CPAs specify indicators and design systems for managing data, processes and controls. They help set goals and evaluate results.
“Accountants are called upon to generate or approve a wide range of key performance indicators and risks. These indicators are needed to spot trends and risks early on,” says Bill Murphy, CPA, FCA, National Leader, Climate Change and Sustainability Group, at KPMG.
Respond to the market
Finally, CPAs prepare reports on the risks for the company associated with climate change, the measures taken to mitigate these risks and the results of these measures. Reports are prepared on a voluntary basis or are, in listed companies, mandatory, like management reports.