Accounting | Sustainability

Think the environment doesn’t affect you as an accountant? Think again

It can be hard to see how climate issues relate to our professional lives. But there’s a big connection—and here’s what you can do about it.

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Blue bin floating on water during floodingCPAs can play a valuable role in dealing with the changes that will inevitably come due to more extreme weather patterns and rising average global temperatures (Shutterstock/Marc Bruxelle)

Jennifer Ash, CPA, CMA, is vice-president of finance and operations at Frontiers North Adventures, a small tourism company that offers polar bear spotting excursions. One fall morning a few years ago, the company learned the sea ice would start forming a few days later than the year before, continuing a trend that had started some 30 years earlier. For Ash, that could mean only one thing: with no sea ice, there would be no polar bears—and no customers. Ash ended up taking part in scenario planning for a new kind of tour based on summer exploring. 

For many CPAs, it’s hard to see the link between climate change and their day-to-day work lives. Yet as Ash’s experience shows, CPAs can play a valuable role in dealing with the changes that will inevitably come with more extreme weather patterns and rising average global temperatures. That’s why it’s a good time to evaluate how professional accountants can bring climate issues into the office. 

1) International pressure is growing. Ever since the Paris Agreement was signed in 2015, there has been an increasing demand for climate change reporting from company stakeholders. Professional accountancy practices worldwide are being asked to help organizations integrate sustainability, including climate change, into their strategies, operations and reporting.

2) CPAs are a natural for assessing climate-related issues. You can play a role at every stage of adaptation—from risk assessment to reporting. For example, as Sarah Keyes, CPA, CA, and principal, sustainability at CPA Canada, points out, the first step in dealing with climate change is understanding the potential risks the organization faces and deciding which are most material. 

“Accountants are really good at risk identification,” she says. “But they are also good at assessing impact and likelihood.” 

3) Climate change is a business issue. When an extreme weather event occurs, it can translate into office closures, operational disruptions, absent employees, unavailable resources, and more. When an unexpected cold spell or heat wave occurs, it can bring higher energy costs than expected. When drought causes a cotton crop to fail in India, it can affect product lines at a clothing company in Canada. 

4) The business world is adapting. Some companies are working hard to reduce the greenhouse gases that contribute to climate change. For example, as Celine Bak, president of Analytica Advisors, pointed out this past fall at the Foresight roundtable on the future of the accounting profession, L’Oréal has already committed to reducing its emissions to zero by 2030, including its full supply chain, all its operations, all the energy it buys and the energy used by its supply chain. 

“There are now almost 500 companies that have made those kinds of commitments across eight different sectors,” she says. Meanwhile, other companies are adapting to the effects of the changing environment. For example, Whistler Blackcomb adapted to milder winters and a shorter skiing season by diversifying into year-round tourism and found new revenue sources. [See below: Mitigation vs. adaptation: what’s the difference?]

5) This is your chance as a CPA to make a difference. If you are already in a leadership position, you can work with the management team to build climate issues into strategy and build accountability. If you are just beginning your career or looking to make a switch, you have a prime opportunity get in on the ground floor of a service area that can only continue to grow. 

“In the future, it’s going to be hard to find an organization that isn’t affected by climate change,” says Keyes. “And who is better positioned to help navigate this whole new world than accountants? This is huge opportunity for CPAs to continue to add value to the companies they work in and serve—and it only enhances their relevance as this becomes one of the defining issues of the 21st century.”

LEARN ABOUT CLIMATE CHANGE

Expand your knowledge and how you can use your skills to help businesses with CPA Canada’s resources, including: Climate change and Canadian business: The good, the bad and the realistic, Four ways climate change is affecting your organization...and what you can do, and Climate change adaptation and accountants’ roles. 

For more, go to CPAs enable climate adaptation and resilience, which features real-life examples of how Canadian companies are adapting in a variety of sectors from tourism, and retail to transit, municipalities, and beyond.

Mitigation and adaptation: What's the difference?

Mitigation has to do with taking action to slow climate change by reducing greenhouse emissions. For organizations, this means reducing the greenhouse gas emissions that can be attributed to their operations, products or service.

Adaptation means taking action to respond to the effects of climate changes. For organizations, this means minimizing and responding to the effects of climate change on the organization.

See A Primer on Climate Change Mitigation and Adaptation for more.