Accountancy has a reputation as a backroom – perhaps even a boring – profession. But that’s all changing. Accountants are leading and guiding organisations dealing with the climate crisis, helping to create a better future for us and coming generations.
If the climate crisis calls for a revolution in our economies and societies, our habits of consumption and energy use, in our thinking about the relationship between humans and the natural world, then accountants are leading the charge.
Climate change may potentially cost the Australian economy hundreds of billions of dollars. Conservative estimates from the Intergovernmental Panel on Climate Change (IPCC) indicate that 1 degree warming would cut GDP growth by 0.3 per cent a year.
The Australian Government has demonstrated its commitment to climate change action by pledging to reduce greenhouse gas emissions by 43 per cent below 2005 levels by 2030. This will support Australia’s long-term emission reduction plan to achieve net zero by 2050.
How can accounting professionals assist?
Accountants are accustomed to recording transactions in ledgers and journals, converting these transactions into financial metrics to analyse risks and organisational performance, and creating financial statements to help users make better-informed decisions. These skills of measuring, recording, analysing, and reporting can be extended to green accounting to show us clearly how our activities have quantifiable negative impacts on the environment.
Accurate measurement of greenhouse gas emissions caused by businesses, industries, bureaucracies, and other organisations is vital to the fight against climate change. It demands that organisations tabulate the extent to which emissions caused by their activities and operations are impacting planetary welfare. What’s more, the tools of accounting can help identify the best emission-reduction strategies in particular circumstances.
Transitioning toward a sustainable economy requires transparent measurement and reporting. Accountants have the tools to help us observe the environmental, social, and financial impacts of climate change and, in turn, the impacts of measures taken to mitigate or adapt to it.
Accountancy may seem like a calculus, but it’s a way of observing the relationship between the economy, society and the natural world, leading to the effective management of natural resources with a better future in mind. And that’s hardly a boring backroom activity.
Reports prepared by accountants can be used by organisations to achieve climate-change mitigation and adaptation and integrate climate-change-related risks into their organisational strategies.
The right use of accounting can also help both governments and organisations to protect vulnerable and disadvantaged people from the impacts of climate change. Social inequality – felt acutely by disadvantaged groups that are already facing the adverse impacts of COVID-19 – will only increase as the full effects of climate change are felt. There’s an urgent need for more discussion of the impact of a changing climate on vulnerable and disadvantaged communities, and how we can reduce their suffering. Accountants can help with that process.
The University of Tasmania has also started new courses on business sustainability and climate change with the aim of developing business professionals who can grow and manage a sustainable business by incorporating sustainability into their business strategy.
In this way, we can help businesses and other organisations attend to our civilisation’s core challenge: how to have a healthy planet and a strong and sustainable economy.
Main image: Hydro Tasmania's Hybrid Renewable Energy Power Station.
This story features in the 2023 edition of It's in our nature - a collection of stories that celebrate and highlight the unique work being undertaken by our institution, and the people within it, to deliver a more fair, equitable and sustainable society.
Explore sustainability at the University of Tasmania and how you can get involved.
As we aim to be a global, sustainable and responsible leading institution, our efforts align with the United Nations Sustainable Development Goals.