CA ANZ’s recent Navigating Climate Risks and Opportunities online event showed one thing is clear: climate change is a collective challenge that requires a collective response if we’re to reach net zero carbon emissions by 2050.

The 25 November event, hosted by CA ANZ and facilitated by G100 chair and REA Group CFO Janelle Hopkins FCA, explored the outcomes of the COP26 talks in Glasgow and the accounting profession’s role in supporting the journey to net zero and a just transition..

On the panel were New Zealand’s Minister of Climate Change, Hon James Shaw, Qantas Group CFO Vanessa Hudson, professional director Bella Takiari-Brame CA and Australian economist Professor Ross Garnaut AC.

COP26 was, naturally, a conversation starter.

Accountants’ role in countering climate change

“There’s been a lot of media about COP26 having either been a huge success, or a complete failure, and the answer of course is that it’s actually a bit of both,” said Shaw, who attended the event in Glasgow.

“The focus really will change from writing the rulebook, to what we’re going to do about it. The flowthrough effects into the private sector, and the signal that sends to the private markets, is enormous.”

Shaw agreed that now was the time for the accounting profession to lend its skill set to the collective climate response.

It was a sentiment supported by the more than 1,300 chartered accountants in the online audience. In a pre-event survey, 84% indicated that professional accountants have a role to play in supporting organisations to address the risks and opportunities associated with climate change.

Qantas Group CFO Vanessa Hudson spelled out more about what this role could be.

“If I think about Qantas’ role in reaching net zero by 2050, we’re going to have to invest in new capital and a revamped industry, and a CFO needs to be taking a long-term planning view of this,” she said.

“I think it’s a dangerous place to not get on a long-term journey for fear of short-term profitability."

She added that if you’re having the right conversations with the right stakeholders, “there’s no reason why you will have material impact to profitability.”

Why not joining net zero is a business risk

Hudson also outlined the risks of not joining this collective effort. “If you don’t think like that you will lose customers,” she said. “You will struggle to access employment markets, because people want to work for a company with high ambitions around sustainability targets. Your competitors will be moving, and investors and debt markets will keep you accountable.”

Bella Takiari-Brame CA, a director at New Zealand’s Crown Infrastructure Partners, with experience in oil, gas and utilities, as well as deep connections to Ngāti Maniapoto and Waikato Tainui, reiterated this point for small to medium sized enterprises.

“When we look at our SMEs coming out of COVID, there are two types of businesses: those that no longer exist, and those that have been able to adjust accordingly, whether engaging online or reimagining their work,” she said.

“As trusted advisers it’s paramount that we encourage SMEs to take a step back and think about the long term and what’s important for their values, because I think that’s what will make a difference in encouraging sustainability in everything they do.

“It’s paramount that we encourage SMEs to take a step back and think about the long term and what’s important for their values.” Bella Takiari-Brame CA

“SMEs take contracts from larger businesses and if [those larger businesses] are prioritising sustainability, then SME competitors who also prioritise sustainability will get those contracts instead,” she added.

“You have to appeal to the workforce. Millennials and Gen Z are selective about who they work for and you can’t deny that. If you’re clear on your purpose and incorporate sustainability you will benefit in that regard.”

Takiari-Brame’s comments chime with a new playbook released by CA ANZ, How SMEs can create a more sustainable world, that provides a variety of tools, resources and practical steps for embedding sustainable practices within SMEs.

Domestic opportunities from global action

Respected economist Ross Garnaut AC also emphasised the role accountants must play on the path to net zero. His comments highlighted both the cost of failure on international cooperation on climate change and the opportunities from full participation in successful climate change action.

“The game of investment and trade in zero emissions goods and services is all about certification,” Garnaut said. “If the reductions in emissions are going to come through the decisions of private businesses, whether the pressures are mandatory compliance with the law or voluntary, investors and consumers want to know they’re buying low-emissions products.

“If a business is telling consumers and investors ‘we are zero emissions’, an accountant has to certify that they are.”

“If a business is telling consumers and investors ‘we are zero emissions’, an accountant has to certify that they are.” Ross Garnaut AC

Garnaut expressed the significant domestic opportunities for our nations in joining a collective response to combat global warming.

“Australia has a massive interest in the success of global action to contain climate change. It is the country most vulnerable to climate change. It is the country with the renewable energy and land [that would] prosper most from successful movement to a zero emissions economy.

“And Australia and New Zealand would both be damaged immensely by the regional political disorder – in the South Pacific, South-East Asia and South Asia – that would accompany failure of climate change mitigation.”

He added that: “Australia is the odd country out in the developed democratic world on the crucial commitments to action over the next decade. We need to join other developed democracies, including New Zealand, on a strong 2030 target and methane and coal reductions.

“Phasing out coal is harder for us than New Zealand, of course. But if we joined the US in committing to zero emissions in power generation by 2035, and managed it well, we would have cheaper, more secure, and more reliable power,” he said.

In closing, CA ANZ President Dr Nives Botica Redmayne FCA delivered a call to action for all those in attendance.

“We are well known for charting the best course of action, for making a difference, so shaping a sustainable future is a task fit for us as chartered accountants,” she said.

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