LAHORE: As world leaders gather for COP28, ACCA (the Association of Chartered Accountants), IFAC (the International Federation of Accountants) and professional services firm PwC released a new report: The role of the CFO and finance function in the climate transition: driving value and sustainability, based on a survey of 1,000 senior finance professionals around the world.

The research reveals 47% of respondents in the Asia Pacific region have yet to produce a plan for reducing their carbon emissions. Alarmingly, 69% of those respondents without an emissions plan say they currently have no intention of developing one. This compares with global figures of 46% of respondents who have yet to prepare an emissions plan and 70% of those say they currently have no intention of developing one.

The report also says that that involving CFOs and finance teams in the emissions reduction planning is likely to accelerate progress. They should embrace this because, although they may not always be the ‘owner’ of the sustainability agenda, CFOs can embed climate transition priorities into business planning and resource allocation, and enable high-quality sustainability reporting internally and externally.

The research recommends that finance teams need to develop the right skills and expertise to continue increasing their contribution to a climate transition. For CFOs, balancing the short-term operational priorities of the finance team whilst simultaneously upskilling and equipping the team to support the wider organisation’s net zero initiatives longer term must now be a critical imperative.

Helen Brand, chief executive of ACCA said: “The accountancy and finance profession can enable organisations to achieve their net-zero ambitions in a fair and inclusive way. They can also support the just transition to a low-carbon economy by helping their organisations to seize the associated business benefits. As COP28 begins, this report is a call to action for professional accountants everywhere to play their part in helping their organisations to reduce their carbon emissions and support the climate transition.”

Asmaa Resmouki, president of IFAC, commented: “The expertise of accounting and finance professionals in combating climate change is absolutely essential if we are to make the progress the planet so desperately needs.”

“This report corroborates IFAC’s prior research into corporate disclosures on emissions targets and transition plans for achieving them. Companies need to improve the decision-usefulness of their transition plans and how they communicate them to stakeholders.”

David Russell, finance transformation leader, PwC, added: “This report highlights a critical gap where some businesses lack a clear roadmap to meet their emissions targets and the ability to measure and report progress against their goals. It’s imperative for finance leaders not just to drive the change towards sustainability but also to build trust in the reporting of progress towards sustainability goals. CFOs can play a pivotal role in integrating environmental considerations into strategy, planning and reporting – ensuring that businesses not only contribute positively to the climate agenda but also adapt and thrive in a rapidly changing economic landscape.”

Copyright Business Recorder, 2023

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