The global movement for environmentally responsible and ethical business has been progressing steadily over the past decade, especially with growing concerns about the climate crisis. Some key developments include:
- Over two thousand companies committing to climate targets in line with the Paris Agreement through the UN-supported Science Based Targets initiative.
- The UN’s initiation of the ‘Decade of Action’ on Sustainable Development Goals.
- Several hundred companies signing a new corporate Climate Pledge.
- Major countries like China and the UK making net-zero carbon commitments.
- Corporations facing increasing pressure from various stakeholders to minimize their social and environmental impact. For instance, a civil court in the Netherlands ordered Shell to cut its carbon emissions by 45% of 2019 levels by 2030.
How Accountants are Making a Difference
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Effective Measuring and Reporting: Transitioning to a sustainable economy requires data, measurement, financial planning, and transparent reporting. Corporate Social Responsibility (CSR), environmental costs and risks, and sustainability progress all need accounting. Various frameworks and organizations set the benchmark for sustainability reporting:
- The Global Reporting Initiative (GRI) is widely adopted, with 75% of the world’s largest 250 companies using GRI standards.
- The Sustainable Development Goals measure environmental and social progress in Australia and worldwide.
- The Equator Principles and the SEEA Ecosystem Accounting (SEEA EA) are other notable frameworks.
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Shaping Investments in the Ethical Finance Sector: Over 1,500 global investor groups announced plans to divest $39.2 trillion away from fossil fuels. Ethical finance has seen a boom with organizations like Australian Ethical Investment and the Investor Group on Climate Change emphasizing environmental, social, and governance (ESG) performance. ESG investments are projected to exceed $53 trillion by 2025.
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Supporting Green Start-ups: Green tech companies, social enterprises, and renewable energy start-ups are crucial for a sustainable future. Accountants can assist these start-ups with measurement, reporting, business modeling, and navigating taxation and auditing obligations.
CPA Australia’s Stance: CPA Australia recognizes the scientific evidence of climate change and emphasizes the role of the accounting profession in shaping environmentally sensitive business and economic policies.
In conclusion, the accounting profession plays a pivotal role in driving sustainability, especially in Australia. Whether it’s through effective reporting, ethical investments, or supporting green initiatives, accountants have the tools and knowledge to make a significant impact.
Looking to Integrate Sustainability into Your Business Strategy? At Quinlan Tax, our team of expert tax accountants is well-versed in sustainable business practices. We can guide you in maximizing tax incentives, ensuring compliance, and integrating eco-friendly practices into your business strategy. Contact us today to embark on your journey towards a greener future.