How is your business adapting to climate change?

Rail beds are sinking. Fires are smoking out tourist destinations. The water crisis is officially a top-10 global threat. Need we go on? Climate change is real and professional accountants are grappling with the business implications.

CPA Canada published its first climate change disclosure paper in 2005, two years after the U.S.-based Investor Network on Climate Risk drew attention to relevant securities regulator’s reporting requirements.

“We were the first accounting body to flag this issue and provide reporting guidance,” says Alan Willis, CPA, CA, one of the paper’s authors and a former member of CPA Canada’s Sustainability Advisory Board.

Fast forward 10 years. Climate change is now recognized as a significant risk management issue. We spoke to several CPAs who attended climate change seminars that were part of CPA Canada’s recently launched multi-year climate change initiative – about the risks and opportunities.

Eitan Dehtiar, CPA, CMA
Strategic Development Consultant and Interim CFO

Climate connection: I have a passion for the Canadian Arctic and have been involved in many projects that focused primarily on the resource, logistics and transportation sectors. Climate change is far more evident, immediate and significant in the Arctic, where changing weather patterns affect marine shipping seasons (and consequently project and community resupply), and traditional hunting and transportation routes.
The challenge: Understanding the risks and opportunities that we’ll face over the next 20-to-50 years and being able to navigate business through them.
Wake-up call: Manitoba’s Port of Churchill is the poster child for climate change. The opportunity: Churchill has Canada’s only deep-water Arctic port and the number of ice-free days in the region has been steadily increasing. The risk: Churchill has no road access and is connected to the rest of Manitoba by a rail bed, which is slowly sinking as the permafrost thaws.
CPA shout-out: Short-term reporting requirements make it very difficult for senior executives to shift their focus to longer-term issues such as climate change adaptation. Increased disclosure requirements will help present climate change as a real and legitimate threat to business continuity, and will help stakeholders understand the impact of climate change.

Sonia Kowalewski, CPA, CA
Senior Consultant, Enterprise Risk

Climate connection: I’ve travelled and lived in many regions, so I see the world as one large interconnected ecosystem. It’s becoming increasingly urgent to understand the rapidly changing global climate and ensure that we’re positioned for long-term success. Professional accountants have the needed skill set to steer organizations and prepare for this shift.
The challenge: One of the greatest challenges in building a business case for a climate change adaptation strategy is the “short-termism” focus. However, as investors begin to use a longer-term lens, businesses will need to identify risks associated with climate change and integrate them into their strategies.
Wake-up call: The World Economic Forum’s Global Risk 2015 report ranked water crisis and failure of climate change adaptation in the top 10 global threats.
CPA shout-out: Professional accountants can play a pivotal role in empowering organizations to make informed decisions in the best interests of the organization and the global ecosystem. By presenting the numbers, we can provide compelling economic reasons for businesses to integrate climate change mitigation and adaptation into their fabric. Professional accountants can help clients and the public develop strategies for long-term resilience. 

Liane Lowe, CPA, CA
Manager, Climate Change and Sustainability Services

Climate connection: I’m interested in how measuring the quantitative effects of climate change can help improve decision making and drive action.
The challenge: I see an opportunity for professional accountants in industry to be a driving force. They can help organizations analyze the impact in a tangible way. Professional accountants in public practice can provide value by helping clients model the financial impact of climate change and the economic outcomes of various adaptation scenarios.
Wake-up call: We are so far behind in the fight to mitigate climate change. Seeing events locally and globally has opened my eyes to how greenhouse gas emissions affect climate change. I understand the importance of focusing on adaptation because these effects will continue.
CPA shout-out: We need a shift in company culture. Thinking about all the issues which affect long-term success will help organizations focus more on climate change. The profession can have an impact by educating members on the ways climate change can affect industries and the potential costs (or financial benefits) to organizations. 

Ruby Lu, CPA, CGA
Instream Energy Systems

Climate connection: Our company works in the renewable energy sector, so we’re part of the solution to climate change.
The challenge: There isn’t just one solution to climate change. How can we work together to make the biggest impact?
Wake-up call: We’re experiencing a water shortage, but at the same time the sea level is rising. Our founder saw an opportunity to be part of the climate change solution. Our technology is suitable for both inland and near-shore tidal marine waterways.
CPA shout-out: For climate change solutions to succeed, we need everyone, not just engineers. We also need CPAs. I’m trying to understand how CPAs can make a difference.

Alea Smaniotto, CPA student

Climate connection: I’m interested in living life sustainably. However, there’s only so much individuals can do. The real change will come from business.
The challenge: CPAs have the risk-assessment and analytical skills needed to tackle this initiative, and are aligned with the core operations and will be key contributors. They can help clients plan for the opportunities as well as the threats.
Wake-up call: The recent fires across British Columbia have affected businesses and industries. Aviation clients have experienced an increase in firefighting work across BC and Alberta this year. However, the fires have smoked out small tourist destinations.
CPA shout-out: While some larger corporations have made strides toward looking at the long term, the short-term view is still prevalent in small to mid-sized companies. Major initiatives don’t need to be undertaken all at once. Small steps can be just as effective.

Other stories on climate change adaptation
New initiative focuses on climate change's challenges and opportunities
Frontiers North Adventures: Adapting to climate change – Case study 1
TransLink: Adapting to climate change — Case study 2
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BC is looking at a new approach to tackling climate change adaptation

How is your business adapting to climate change? Please send us your comments and feedback!

The next issue of Member News will be published on September 8.

Mara Gulens