Will Climate Change keep you in business?

Will the consequences of climate change provide opportunities/pain for accountants?

Didn't find your answer?

I couldn't let today close without some comment about climate change.

Many years ago, when it was predicted that most organisations would have to report their carbon footprint, accountants were seen as the obvious choice to help drive/monitor the regulations. Being that way inclined, I had a go at measuing my own (carbon footprint) and published the firm's on its website.  

That was in my naive "surely everyone is concerned by this" period and, of course, government and regulators did nothing, preferring instead to carry on regardless and wait for someone, or something, else to do/happen.

Today climate change is trending again and so, assuming someone out there is prepared to stick their neck out and do something about reversing current heating policies and legislate for heat reducing behaviour, how do you see yourself as getting involved?

For those who have not a clue about what I'm getting at, think about the imposition of Money Laundering regs, the FRS or GDPR and imagine how the imposition of carbon reporting and enviro. behaviour legislation would impact on you and your clients and how you'd respond. 

Having messed about with all this in that prior period my imaginings included turning up to a client in my diesel and, taking them out for lunch where they ordered  steak.

 

Replies (35)

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RLI
By lionofludesch
08th Oct 2018 18:21

It's not all that long since an Ice Age was the likely scenario for the future.

And diesel was the future five years ago. As demonstrated by the spikes in the taxation of electric company cars.

Where's all this electricity going to come from ?

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Replying to lionofludesch:
Teignmouth
By Paul Scholes
09th Oct 2018 10:30

OK..there are answers and opinions on all that on Google, so what about my question? Are you saying there will be no consequences on you or your clients that will require your guidance?

How about if accounts and/or tax returns end up with sections for the individual/business emissions and tax incentives or costs? Or, similar to AML regs, you have to report clients who you suspect of falsifying their submissions or causing more CO2 equivalents, waste or pollution than is permitted?

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By Tim Vane
08th Oct 2018 19:03

The other day I sat in my garden late into the evening and supped beer. We are growing grapes on the patio. I'm loving this climate change malarkey. Bring it on.

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Replying to Tim Vane:
Teignmouth
By Paul Scholes
09th Oct 2018 10:33

And what, you spent February in Australia?

Again, how about my question?

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By andy.partridge
08th Oct 2018 22:16

UK Population of 65m versus world population of 7.7bn suggests to me measures are futile.

We could sacrifice ourselves and lead the way but I’m reminded that we aren’t the influencers in the world we used to be.

When China, India and Brazil take this seriously it might be time for UK to join in.

So, sorry Paul, I won’t be joining this particular bandwagon. Humans are greedy, selfish and stupid when it comes to the bigger picture. I’m only human.

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Replying to andy.partridge:
RLI
By lionofludesch
09th Oct 2018 07:31

Are we human or are we dancer ?

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Replying to andy.partridge:
Teignmouth
By Paul Scholes
09th Oct 2018 10:54

So what, on that "I'm insignificant" criteria, you don't vote or recycle and chuck litter on the ground?

Per capita the UK emits about the same CO2 as China and 2-3 times as much as India and Brazil. Economically we are significant and our scientific innovation can be way up there but, unless we get on the bandwagon, as you call it, China, India et al will reap the benefits of low carbon/waste technology.

Anyway, again (he repeats) are you saying the government are going to do nothing to incentivise or penalise in order to make the new targets?

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Replying to Paul Scholes:
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By andy.partridge
09th Oct 2018 11:59

I don't chuck litter. Not because I am environmentally conscious, but because I was properly brought up. It's simple good manners.

I vote because I have an opinion and I am, within the limited parameters of the game, permitted to express it. It is highly unlikely I would ever vote Green.

I do a half-hearted recycle but understand that there is a chance it will all go to the same landfill so I am not confident it is a good use of my time.

Shall we agree that implementing any significant change will be a huge struggle. I am not a campaigner or activist. I leave that to people who already have too much money or those that wish to exist on the fringes of normal society.

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paddle steamer
By DJKL
09th Oct 2018 01:04

I am broadly supportive of Paul's wish for climate change to be taken more seriously, but sadly am not convinced that "accounting " measurement is going to become that meaningful any time soon, certainly not at a national level.

I have the background of having been exposed to a fair bit of literature re COP21 et al as I have a daughter who spent four years getting an MA in Sustainable Development from St Andrews ,and I ended up doing a bit of reading, around her dissertation area, when she was brainstorming to narrow a definite question which her dissertation could address.

She ended up commenting and critiquing" Revising the Design and Review Frameworks re INDCs" and to take her 11,000 words down to a summary, and not to mince words, concluded current mechanisms re same were pretty weak.

National measurement of commitments and outcomes appears to need more rigour, until there is a far more rigid, rules based, generally accepted measurement basis at the macro level, countries will, despite headline agreements, continue to pay lip service to their commitments.

To give some comfort there does appear to be a generational impetus to changed behaviour, younger people do appear to take the potential and current issues far more seriously than older ones, over time attitudes will change and with that hopefully behaviours.

Anyway she is now embarked on an Msc in Planning so maybe, in years to come, a more than lip service approach (Insert your sustainability platitudes within your planning framework submission documents to tick the Environmental Impact part of the process) will spring out of the expansion of our cities, and far more emphasis will be placed on designing where and how we live, transport links,facilities etc, a combined , more joined up, sustainable planning approach will emerge.

We can then stop just playing at the edges ,as to me often appears the case re planning submissions I have read, merely considering materials used, plant a few trees and a wind turbine to give our developments their "green" credentials and that is enough; sustainable living and design is far more than merely the current fad of the month.

So my input, I have given the UK (and paid for, St Andrews is expensive) an SD graduate with an interest in housing policy.

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Replying to DJKL:
Teignmouth
By Paul Scholes
09th Oct 2018 11:18

Thanks DJKL - I think you've about summed up where I stand on this.

In anything that competes with the status quo economics of the day, most governments will do the bare minimum to give the impression they mean business or announce emission reduction targets with one tongue whilst announcing fracking, airport expansion and the removal of feed-in tariffs with the other.

In recent years however I have been heartened by how commerce, individual states/communities and, as you say, the young, have taken the lead in committing themselves to changed and new behaviours, including, most recently, the fashion for Veganism which, in the big scheme of environmental damage, probably provides the biggest benefit.

Andy sees this as a sacrifice, a loss of something, whereas it's quite the opposite.

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Replying to Paul Scholes:
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By andy.partridge
09th Oct 2018 12:00

Paul Scholes wrote:

Andy sees this as a sacrifice, a loss of something, whereas it's quite the opposite.

All change involves sacrifice. Why else is it so hard to achieve?

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Replying to andy.partridge:
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By keithas
10th Oct 2018 11:36

I think it's more a case of all change involves the perception of sacrifice. I find that, whenever I change something, I usually wish I'd just done it sooner.
Now, if I can just stop smoking and sacrifice the cost, the shortness of breath and the foreshortening of my life expectancy . . .

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Replying to keithas:
Teignmouth
By Paul Scholes
10th Oct 2018 12:52

Yep - "change" by definition, indicates the loss of something and the gain of something else, whereas, unless you enjoy being slaughtered, or have nothing to live for, "sacrifice" indicates just the former.

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Locutus of Borg
By Locutus
09th Oct 2018 10:22

“Will climate change keep you in business”. Maybe there will be a market for us at some stage in the future, but if such reporting became mandatory for SMEs in the distant future, I suspect that specialists who have never been accountants would dominate the market.

This country is progressively de-carbonising, which is a good thing in my view. We have had the capability for decades to generate all of our electricity from nuclear or renewables, but have chosen not to. In the coming couple of decades, maybe we will reach 80%. Virtually all UK land vehicle transport will also be electric or electricfied over that period, as we are currently at the start of a transport revolution. Developments in battery technology may even allow air journeys of a few hundred miles to be battery powered.

But, as Andy Partridge says, the huge problem for carbon emissions is over population, particularly in the developing world. It is relatively easy to build dozens of nuclear power stations or thousands of winds turbines, but much harder to try to restrict a billion women having fewer babies, particularly where the culture is to have 4, 5 or 6.

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Replying to Locutus:
Teignmouth
By Paul Scholes
09th Oct 2018 11:58

Thanks Locutus - I take your point about specialists and would expand that to AI apps. As happened though (in my practice) I do remember a flurry of activity when tax carrots & sticks were brought in for low energy kit and BIKs for cars based on their CO2 emissions, and anticipate more of this soon but, these days I suppose, IT will deal with it.

As far as reporting is concerned, I can't see the current government going anywhere near this for SMEs, let's face it, 20 years of joined-up reporting for the few thousand largest companies has pretty much come to nothing.

On the wider topic of population growth, on one hand, with my morbid hat on, with the likely scenario of a 4-6 degree increase in temperature by the end of the century, the planet will take care of this for us.

With my less morbid hat on the problem to overcome is the desire of increasing populations in developing countries to follow our (developed?) lead on energy and food consumption, waste and pollution.

"We" started this and so it's for us to reduce our damage and to, if necessary, compensate others for not striving to live as we have over the past couple of centuries.

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Replying to Paul Scholes:
Red Leader
By Red Leader
09th Oct 2018 12:48

I believe that there tends to be an inverse relationship between family size and GDP per capita. Therefore as less developed countries become more well off, family size reduces.

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Replying to Locutus:
By coops456
11th Oct 2018 10:43

Locutus wrote:

...but much harder to try to restrict a billion women having fewer babies, particularly where the culture is to have 4, 5 or 6.

Try restricting men then. Most women in developing countries have few or no reproductive rights. As for the "culture" of large families, that's due to the latter, plus a high rate of child mortality will always result in more births. Victorian Britons had more kids to ensure at least some survived to adulthood.

Emancipation of women is the key to family size. There is a proven correlation between keeping girls in education and falling fertility rates. UNESCO http://www.unesco.org/education/tlsf/mods/theme_c/popups/mod13t01s005.html

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Replying to coops456:
paddle steamer
By DJKL
11th Oct 2018 12:38

The alternative " Modest Proposal" for western countries is to somehow restrict the activities of the medical professions.

In effect consider medical provision as giving full cover to age x, 75% cover to age y, 50% cover to age Z then you are on your own with just pain relief to help your passing.

Catch is that this in effect creates a society where the rich can purchase longer and longer lives (albeit its quality may not be that hot).

The alternative approach is preserving life on a set of tests based on likely life quality, but this has some pretty nasty echoes from WWII.

Whilst birth rates are going to be part of the future problems,continual extensions of life expectancy, with bodies outlasting minds, is going to be another part, and as it is reasonable to expect life expectancies to keep increasing throughout the whole world the issue is unlikely to go away any time soon.

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By Mr_awol
09th Oct 2018 11:51

Im not sure I see accountants as being involved in any kind of reporting. Other than an analytical mind, what do we bring to the party? Depending on the client, it might be that engineers, surveyors, electricians or others would be much better placed than us to advise on carbon footprint.

I'd suggest that if reporting becomes compulsory then it might open up an entirely new market for consultancy/advisory services and maybe some accountants will join with suitably knowledgeable professionals to provide a service but we wont be anywhere near the forefront of it.

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Glenn Martin
By Glenn Martin
09th Oct 2018 15:43

Paul there was ESOS reporting where all companies with more than 250 staff have to report there company energy use or you get fined.

I am assuming that is start that if it does not reduce over time then you will get fined, or name and shamed like the do with gender pay gap.

The problem with green energy is that other been green it doesn't really work as its too expensive.

It only works when there is loads of government grants around. For me every roof should have solar panels on it as there is nothing more sure than daylight, but once the tariffs were reduced no one seems to bother with it now.

Its the same with wind turbines etc cost a fortune, look terrible on landscape and only work when windy, but not too windy otherwise they get switched off.

As someone who spends a lot of my time on the coast and fishing I have been appalled at the amount of crap there is on our beaches which no one has done anything about for years until David Attenborough showed a picture of a dolphin with a Tesco bag on its flipper now everyone is all over it.

We can do our bit, but unless China and the US get involved it will be like p*ssing in the wind.

My next car may well be electric or hybrid as I see Audi are now all over it.

If the reporting of carbon footprint became a thing I am sure there will be loads of ambulance chasers who pop to do it for you, but having done 1 gender pay gap report for a client that's enough for me.

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Replying to Glennzy:
Teignmouth
By Paul Scholes
09th Oct 2018 17:15

Hi Glenn - yes to the ESOS reporting. I read somewhere that Europe is about to review reporting again but do I care?

We have the expertise and technology to be completely self sufficient in renewable energy and funds are already in place to advance our battery technology with predictions of 300 mile range and 10 minutes recharge in 3-5 years.

I had solar panels fitted a couple of months ago and paid £9K including house battery and a dedicated car charger. On a smaller roof, with fewers panels. no battery and no car charger I was quoted £16K 5 years ago.

The supplier is flat out and has been all year and actually anticipates a higher uptake next year, when the generation & feed-in tariffs go, as he says that with such small sums now they just add to the complication of explaining it all and people are put off.

I disagree with you over the look of wind turbines but, regardless of this, the UK is in one of the best parts of the planet to use this technology and, with the conservatives having banned land turbines, offshore is expanding rapidly and, until I got the panels, all of my household electricity has been via them for several years now.

We also have the technology for smart energy production to even out the vagaries of wind and sunshine, in fact, over the last year, turbines had to be stopped as they were producing electricity we couldn't use.

For example, my car has a battery 10 times the capacity of house battery (and that's now smaller than average). The idea is that you keep your car plugged in and the grid uses it (or part of it) as extra storage when surplus renewable energy is being generated and demands it back at peak times when generation can't meet it.

Why wait for China and the USA (and Canada and Australia)? China is already the world's biggest producer of solar panels and about number 3 in using them, they have seen the writing on the wall and will surprise everyone at how quickly they dump coal, if nothing else, they can't be happy relying so much on Indonesia, Australia, Russia and the USA for imports of the stuff.

Then there's the meat and dairy industries, but that's another story.

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RLI
By lionofludesch
09th Oct 2018 16:06

How are these carbon footprints to be measured and defined ?

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Replying to lionofludesch:
Teignmouth
By Paul Scholes
09th Oct 2018 16:40

Even when I did it 10 years ago Google helped , did you not look, there's loads of help these days.

I used the Carbon Trust one but WWF looks easier.

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Replying to Paul Scholes:
RLI
By lionofludesch
09th Oct 2018 16:57

No - it seemed a lot of fuss.

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Replying to Paul Scholes:
paddle steamer
By DJKL
09th Oct 2018 17:03

But, do they say do whole of life costs rather than just running costs?

Building a car has a fair amount of emissions so for someone like myself, a low mileage driver, it may be better for the environment if I drive my older, less fuel efficient car, for more years rather than change my car every three years to a more energy efficient model.

My house is 150 years old next year, it may not be that energy efficient (sash and case wooden windows etc) re running costs, circa £1,800 H & L a year, but the original energy expended cutting the sandstone, quarrying the slate etc, is spread over its life (and there is certainly no reason why it cannot manage another 100 years) making the energy re its creation per annum very low when compared with its modern competitors- if you look at how modern flats are built they may be far more energy efficient on a running basis but how many years will they remain standing , maybe only 100?

I am of the view that environmental measurement metrics are still in their infancy, you need a modern day Pacioli to devise far more robust "envionmental accounting" measurement, and whole of life calculations are critical re such an appraisal.

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Replying to DJKL:
RLI
By lionofludesch
09th Oct 2018 17:58

I have a chimney sweep client who can leave substantial carbon footprints if he comes straight from work.

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Replying to lionofludesch:
paddle steamer
By DJKL
09th Oct 2018 18:34

Scarce species, the size 12. Sweeps are not that common either.

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Replying to DJKL:
RLI
By lionofludesch
10th Oct 2018 12:09

You'd be surprised how much woodburning goes on these days.

He has a little sideline as a Lucky Chimney Sweep, too.

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Replying to lionofludesch:
paddle steamer
By DJKL
10th Oct 2018 12:38

I do a lot of it myself at the property in my picture, but that is sunny Sweden where no holiday is complete without working through 1-2m^3 of birch lengths with the chainsaw and the log splitter before stacking in the stage one log store (I have two log stores- stage one newly cut and split for drying out, stage 2 those that are dried and are ready for the fire)

In fact come this Saturday (school October holiday up here this Friday) I will be sitting over there in front of the open fire likely burning a large basket of logs each day we are there.

Now I do have a sweep in Sweden but I have never met him (or her) so cannot really comment on his/her carbon footprint.

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Replying to DJKL:
Teignmouth
By Paul Scholes
10th Oct 2018 13:36

I disagree that environmental measurement is in its infancy, environmentalists have been doing and refining it for decades, it's more the case that the public have been kept ignorant and/or have had no interest in knowing about it.

I agree that, for you & me, it is complex but, as you dig & dig into its complexity, you find that every added element only adds 0.00x% to the result that you get from the key elements.

With regard to your car and house examples, if you only ever buy second hand, you are not involved in generating new production of greenhouse gasses and pollution however, considering that the pollution from the making of your existing assets took place some time ago, and so there's nothing now you can do about it, it really is a case of looking at the damage you do today and tomorrow etc etc and weighing that up against the initial hit, and lower running damage, from replacing them with something newer.

So, for my car, there was no way I could justify buying
another litre of diesel and so I switched to an electric model but went for one that is probably one of the least damaging, in terms of its manufacture and recyclability.

Similarly, when I came to move home I was determined to find somewhere with a much better energy rating than my old 100 year old property, plus one that faced the right way to pick up optimal solar, and last month I had, for the first time a £0 gas bill and a £12 electricity bill, relating entirely to wind generation.

In Andy's terms, I admit I am not "normal" (normal is hardly the spice of life), and so have been fortunate in being able to do all of this in the space of 18 months but, as I found ten years ago, when I unearthed the mysteries of energy, greenhouse gasses, food production etc etc, it became blindingly obvious that, with hardly any expense in £s, time & effort, I could make significant changes to my impact on the environment.

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Replying to Paul Scholes:
By coops456
11th Oct 2018 10:57

Paul your experience is very interesting and encouraging.

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Replying to Paul Scholes:
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By andy.partridge
15th Oct 2018 15:08

If you are happy making the changes you have made that is fine, but I would guess that left to humanity's own devices we are doomed as a species.

We can not rely on governments whose focus is generally limited to being re-elected. That leaves the planet's human inhabitants to drive change. They need to be convinced that:
a) There is climate change
b) The change is largely man-made
c) The change can be stabilised and reversed by a shift in habits.
That is a tall order for educated savvy people because it requires 'faith'. Imagine how much more difficult for the majority of the global population who have not had the benefit of Western 'privilege'.

PS. I have a hybrid vehicle.

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Replying to andy.partridge:
Teignmouth
By Paul Scholes
15th Oct 2018 16:10

Extending that conundrum:

The people most likely to want to drive change are those who are the most, and soonest, affected, eg populations in India and Bangladesh but they are not only some of the lowest contributors to climate breakdown but also the least able to "drive" anything globally.

Ironically though, if interviews are to be believed, they are some of the most "savvy" people, as far as acceptance and understanding of climate breakdown is concerned, and they rightly look to the 15%-20% who live in the developed countries to compensate them and start to do something about the mess they(we) have made of it.

With regard to your three criteria, a) seems to have been accepted for many years and, now that people like Nigel Lawson have been put back in their box, b) is rarely ever mentioned these days in the UK and even Trump seems to be backtracking (apparently it's no longer a Chinese hoax).

Until last week, with 95%+ of the world's scientists confirming a), b) & c) I had no problem having "faith", but this week my faith in c) being possible in the next 12 years has pretty much gone.

This doesn't mean the end of the World, ie humans will still be around in 100 years, it's just that most are likely to be in Siberia and Canada, after invasion by China and America. So if Scotland gets independence, it could be short-lived!

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Replying to Paul Scholes:
RLI
By lionofludesch
15th Oct 2018 16:30

MTD will bring the world to an end in a lot less than 12 years.

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Replying to lionofludesch:
Teignmouth
By Paul Scholes
15th Oct 2018 16:47

I'll leave that one to you lot, I'm calling it a day next April.

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