It is high time for businesses to take a far greater role in building capacity to tackle climate change.
Accountants can play a key role by including the financial risks of climate change in their companies’ reports. Reporting on the firm’s activities, risks, opportunities and prospects and highlighting the potential business value at risk due to climate change is of crucial importance to enhance stakeholder decision-making.
Stakeholders’ expectations have been increasing. Companies are now more likely to proactively manage these expectations and factor in carbon emission issues in their investments and strategic decisions.
The economic benefits that can accrue from tackling climate change include cost savings due to energy efficiency and increased markets for greener products. This in turn will push the firms up the competitive ladder.
There are a number of measures that can be considered, including:
nSetting numerical targets to improve energy efficiency;
nMoving away from antagonistic viewpoints that visualise humankind and the environment as isolated towards a more environmental-friendly way of operating;
nEmploying greener technology in the conduct of business; and
nForging better cooperation with major universities and resource institutions to develop low-carbon technologies and cleaner energy.
In summary, to address climate change, firms need to act accountably in a more holistic manner by transparently reporting their corporate social responsibility action and future plans. Firms that are positive about meeting these huge challenges would become more resilient to change.
Raja Adzrin Raja Ahma
The Star (Kuala Lumpur)/ANN