40% of UK organisations ready to increase investment into tackling climate change
Research among ACCA UK accountants and finance professionals reveals that almost half (44%) say their organisations have no set targets to be net zero compliant by 2050.
Of these, a third (31%) also say that they have no plans to put any targets in place. Only a fifth (21%) of UK organisations have set targets already in place to reach this climate action goal, however, it is positive to see that this is 6% above the global average (15%).
These startling facts in Climate action and the accountancy profession: building a sustainable future come ahead of the COP26 summit which begins on 31 October in Glasgow, Scotland. The key findings and the opinions from participants from both the public and private sectors, in organisations large and small in the UK, reveal the gap between the good intentions of organisations, and the urgent and speedy need for climate action.
Positively, 40% of respondents say their organisations will be willing to invest much more than today in addressing climate change over the next three to five years – up 2% from the global average (38%). However, 15% say they will be keeping their investment the same and 5% will even be investing less over the coming years, despite the urgency of action against climate change.
An overwhelming majority (76%) agree it is important that accountancy and finance teams are involved in supporting their organisations to tackle climate change, but they see barriers holding them back such as the internal organisational perception that climate action is not viewed as the responsibility of the finance team (54%), lack of commercial incentive (36%), lack of support from leadership (24%) and poor data (23%).
Globally, 66% believe that helping their organisation to tackle climate change will be part of their job to ‘some extent’ or ‘significant extent’ over the next five years Worryingly, this drops by nearly 10% to 57% when looking specifically at UK-based accounting and finance professionals. Moreover, 15% of UK professionals believe they won’t be involved in this process at all, 4% higher than the global average (11%).
Claire Bennison, head of ACCA UK, said, “Whilst it’s clear that UK organisations’ hearts are in the right place with four in ten committing to investing more to tackling climate change, they do not currently have the framework in place to provide the support needed or track impact.
Organisations and leadership teams in the UK need to understand that accountancy and finance professionals are critical to bringing an integrated approach that places sustainability at the heart of organisational decision making. Action against climate change cannot be put on the back burner – critical steps forward need to be taken now to implement data-driven decision making and rigorous measurement of performance using science-based targets, coherent reporting and trustworthy assurance of information used by stakeholders.”
Further UK findings include:
- Only 29% say that climate change considerations play a significant role in financial decision making in their organisation – 11% say that it does not factor in at all.
- There is minimal integration of climate key performance indicators (KPIs) into business strategy and/or risk frameworks, with only 21% of respondents revealing their organisation already has this reporting structure in place. Over a third (36%) also say they do not have plans to put this in place in the future.
- 61% believe climate change regulation – in the form of climate pricing or new reporting requirements – will impact their organisation over the next five years, while 35% say the impact will come through physical effects of climate changes such as weather patterns, extreme heat or flooding.
Narayanan Vaidyanathan, head of business insights at ACCA, comments: ‘Very few organisations are progressing at the pace and scale needed to counter the devastating and world-altering threats climate change is posing. Organisations must leverage the expertise of accountancy and finance professionals to increase the pace of climate action. This is needed to future proof their organisations and to deliver value while coexisting with natural ecosystems.’
As part of its commitment to the UN SDGs ACCA aims to become net zero by 2030. It will report on progress in its annual integrated report. As a member of the A4S Accounting Bodies Network (ABN), ACCA has also joined 12 other accountancy bodies to commit to achieve net zero greenhouse gas (GHG) emissions within their own organisations, as well as provide an enabling environment for their membership to do the same.