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COP26: Accounting for the climate crisis

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Ahead of his appearance at our AccountingWEB Live Expo this 1-2 December, Makbul Patel explores how management accountants can do their bit for the climate crisis.

24th Nov 2021
Principle Accountant Bolton at Home
Columnist
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Something is happening at the beginning of December that has got me excited.

AccountingWEB (AWEB to you and I) are putting on an accountancy expo in Coventry: the AccountingWEB Live Expo. You’ve heard of Comic-con, art exhibitions and motor shows, but now we have a chance to celebrate all things accounting and finance. We can all dress up as our favourite accountant, go armed with our superpowers of a well reconciled spreadsheet, and revel in the nirvana of positive variances to budget.

I will be appearing at the Expo occupying a place within some interesting discussions on key topics that matter to the profession. There will also be food as I am chipping in with a cooking demonstration. Who says accountancy is boring?

Registration is free and only takes a moment - click here to secure your spot now. Be there or be square.

Expos are there to serve a purpose (besides getting a free bag and pen). They bring a community of like-minded people together to share ideas, solve problems and take comfort in the fact that we as human beings share very similar aspirations. We have more in common than our differences.

Management accountancy deserves to be showcased in a big arena such as the AWEB expo. It deserves to demonstrate that it is more than just a costing tool or a means for working out our budgets at the end of the year. Management accountancy can be used as a force for good that benefits society and the future of our communities.

COP26

Unless you’ve been living on Mars, you’ll know we recently had the climate conference in Glasgow: COP26. At first I thought it was a conference for police reform. However, it has the more underwhelming meaning of Conference of Parties (that’s the COP bit) getting together for the 26th time. They were working overtime in the acronym department that day. Think of COP26 as the AccountingWEB Live Expo, but with more jute bags.

On a more serious note, it is commendable that nations can get together like this and work in harmony to achieve a more sustainable, less polluted world for the future. It impacts everyone on the planet.

Lo and behold, the management accountant also has a role to play in achieving this utopia. What good can I bring to battle against the evils of climate apocalypse?

Real change starts at the top. The organisation needs to demonstrate that it has the welfare of the planet as one of its main priorities, not because it puts a shine on their public image but because we all have a responsibility to support our planet, regardless of how small our contribution.

Climate change initiatives

On the ground though, a recent survey revealed the motives behind organisations implementing ‘climate change initiatives’.

Climate change initiatives
Makbul Patel

Source: Cimaglobal.com

Firms truly believe that embracing a more positive attitude to climate change initiatives will give them a true advantage over their competitors. Those that don’t will only rue their strategies.

At the risk of sounding bandwaggony (I’ll copyright that word), management accounting has to incorporate a more diverse range of data and produce a greater level of information that reports on a softer side of the organisation.

There is an undeniable fact that in the last 100 years or so we have witnessed a catastrophic change in the world we live in - droughts, floods, fires, icebergs going off on lonely trips to more exotic locations and turtles wearing carrier bags as neckties in the South Pacific. It’s alarming.

One area in which management accountants can make a real contribution is through reporting on wastage within their organisation.

When faced with a budget that runs into the millions, it is very easy for those in charge to get frivolous in the utilisation of resources resulting in wastage - wastage of manpower, fuel and materials.

The impetus, though, is on the top tier of the organisation to shift the culture, making everyone responsible in this drive towards a more holistic approach to environmental sustainability.

Global energy sources

To put things into perspective, the following pie chart demonstrates where we stand in terms of global energy use.

Climate change
Makbul Patel

Source: OECD Climate change in figures

We still have a long way to go in the shift from our dependency on fossil fuels that have an adverse effect on the environment. Nations can work together and approach this in a less selfish way which will benefit our planet and everyone on it. Organisations can pool together to share ideas and work towards a more sustainable working practice.

The pandemic has shown us that we are beholden to nature and not the other way around. It has also forced companies to rethink the way they work. When faced with adversity, we are very resilient.

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