The climate crisis and the year ahead

As we face 2021, Senior Policy Advocate Lydia Tsen CA asks: What could we take away from a year drenched in uncertainty? She says collective action is the only appropriate response to a crisis and climate change is not different.

With the introduction of the pandemic into our lives, New Zealanders were collectively (and almost affectionately) referred to as a ‘team of five million’. We were urged to work together to protect each other and, despite the expected fatigue associated with doing so, life in New Zealand is as normal as it can be – just consider the music festivals held over the last month.

Addressing the climate crisis calls for an ability to pursue activities which may not provide immediate tangible (or individual) benefit but will instead pave the way for long-term growth and prosperity for people, fauna and flora.

This year we have already seen the release of the Climate Change Commission’s draft advice detailing what it recommends the Government do in order to meet its obligations under the Paris Agreement. The draft advice includes three emission budgets covering five-year periods to 2035 and policy and sector-specific recommendations on how to meet both these budgets and obligations under the Paris Agreement. Interwoven throughout the draft advice is recognition of the need for collective action – that equitable and long-lasting change can only take place when everyone works in concert with each other.

Addressing the climate crisis calls for an ability to pursue activities which may not provide immediate tangible (or individual) benefit but will instead pave the way for long-term growth and prosperity for people, fauna and flora.

All efforts will be directed towards ensuring New Zealand meets its Paris Agreement commitments. Hopefully woven throughout these developments will be a commitment to prosperity – not just for us but for the diverse ecosystem we have the privilege of living in.

Addressing the crisis necessitates an approach that encourages investment and innovation in areas such as technology, infrastructure, health and education – policies that are inherently collective in nature. These developments are needed to provide a platform for both mitigating the effects of the current crisis and preventing it from happening again. And, in seeking such an approach, other challenges such as economic inequality, access to healthcare and education, and low productivity are all addressed in turn.

Personal challenge

At an individual level, it can be challenging to determine how best to contribute to positive change and act in concert with everyone else.

But perhaps surprisingly to some, accountants are particularly well placed to ensure organisations play a role in mitigating the climate crisis. Understanding climate-related metrics (and the financials involved) and distilling this for different users – whether internally or externally – will be crucial for everyone to remain on the same page. As will enabling organisations to have the resilience to weather financial shocks as the market adapts to a new way of operating.

Internationally, accountants are also taking direct part in initiatives such as the Natural Capital Coalition, the International Integrated Reporting Council and the Climate Disclosure Standards Board – all bodies that consider the value creation process and information required by the plethora of stakeholders for decision-making.

The Government’s declaration of a climate change emergency in December was a signal that addressing the crisis requires everyone. The tone from the top continues to be one of collective action – that we all have a role to play – both personally and professionally.

Similarly, the release of the Sustainable Finance Forum’s Roadmap to Action (which lays out how we can achieve a sustainable financial system by 2030) illustrates the role that businesses can play in helping address the crisis. And, more importantly, that businesses are no longer willing to stand back as passive observers of the crisis as it unfolds.

Such developments are encouraging. This corporate activism lends itself to a revolution in the way business is conducted, inspiring the development of governance models that consider the interconnected nature of the risks and opportunities present.

Mā pango, mā whero ka oti te mahi – Māori proverb

(With red and black the work will be completed – ie. work will be completed if everyone works together)

Collective action is no longer a lofty goal to aspire to but rather a way of operating that New Zealand has already shown itself to be capable of. Why not then do so with the climate crisis?

This article was first published by Chartered Accountants Australia and New Zealand. You can visit the original page here