Global Response to Climate Change by the Accounting Profession: Insights for Ghana
As a matter of urgency, the Institute of Chartered Accountants - Ghana (ICAG) should lead the way for its members in responding to climate change.
The finance function of leading organisations consists of accountants who are involved in the measurement and reporting of corporate events. The accounting profession has a total of over 2.5 million professionals working across industries and sectors. They are also deeply involved in strategic decision making in these organisations, a reason for their involvement in the global fight against climate change. The accounting profession through a statement signd by a total of 13 Chief Executives  (representing 14 leading accounting bodies) has expressed commitment towards addressing climate change. This initiative has come at the back of various research outputs produced by the different regulatory bodies. Accountants are needed to turn the knob in the boardroom in addressing climate-related issues. The joint decision to act on climate change aims to send signals to practicing accountants, bodies of professional accountants and national regulators to be committed to addressing the threat that climate change poses.
The aim of this clarion call is to increase commitment to the fight against climate change by:
(1) integrating climate change risk into organisational strategy, finance, operations, and communications;
(2) supporting sustainable decision-making; and
(3) providing sound advice and services.
This article points out some essential areas that accountants are expected to act in their roles to address climate change and its risks. It also provides some actions that the Institute of Chartered Accountants - Ghana (ICAG) as the national regulator and a member of International Federation of Accountants has to take relating to this clarion call to take action.
Accountants Can Help Organisations to Improve Climate Transparency
Accountants can enhance how transparent organisations are in measuring, recording and reporting on climate actions. As their role is, following the requisite professional requirements would ensure that values or narratives churned out by organisations on their efforts in combating climate change are trusted. Apart from the preparation aspect, the accountants (as auditors) are also involved in auditing of the climate-related aspects of the corporate report which increase trust among corporate information users. Moreover, accountants are involved in developing accounting systems and decisions on what frameworks to use could be influenced by accountants. If accountants are committed to the global clarion call, we should see an advancement of the reporting frameworks by the use of global frameworks like the Global Reporting Initiative (GRI) Standard which has climate change as an indicator.
Accountants Can Help Organisations to Develop and Implement Climate Finance Policies
The global commitment for the fight against climate change comes with financial commitments from the public sector, private sector and other alternative sources. These funds are usually meant to support climate change mitigation and/or adaptation initiatives which has to be accounted for. Moreover, the corporate finance decisions and public finance decisions taken need to factor climate risk as a key component. There are two key climate-related risks] to critically consider. The first is stranded assets which could be damaged or devalued due to change in regulations or climate-related disasters (e.g. fossil fuel reserves). The second is transition risk which could affect market demands and reputations of companies as society demands transition to a low carbon economy. Accountants in Ghana should take steps to influence their organisations to develop relevant climate finance policies to serve as a corporate guide.
Accounting Departments in Tertiary Schools Can Help in Capacity Building
Accounting education globally (especially in the professional institutions) has been going through relevant changes which are aimed at placing the accountant at the boardroom in making relevant decisions. Thus, as this is happening elsewhere, it is expected for accounting departments in tertiary institutions in Ghana to also respond by adapting the course contents to meet current issues in practice. If this requires a re-evaluation of the course contents, it should be done. Currently, there are various sustainability researchers in these departments and multidisciplinary collaborations should be promoted to inculcate climate-related training in a way that would make the students competitive.
ICAG Has to Lead Its Members
The ICAG has a leading role to play in Ghana to promote climate action among accountants which would affect organisations nationwide. One way to do so is to produce a corporate annual report in the fashion of a  ustainability report which touches on climate change issues. This will show the institute’s commitment to climate change and would be an example to members. In addition, Continuous Professional Development (CPD) courses should address the climate issues and guide the accountants on how to inculcate issues in the accounting systems at their organisations and in decision making.
The regulators across the industries should be concerned about reporting of climate-related information in corporate reports. As of the time this article was being sent to press, only 2 organisations in Ghana have been included in the GRI’s database – Access Bank Ghana (2016-2018 reports) and Puma Energy Ghana Limited (2017-2018 reports). These reports only cited the GRI standard but did not fully comply with the requirements. This could be compared with Kenya (12 companies) or South Africa (17 companies) with some reports having full compliance. Although sustainability reports are voluntary in nature, the low numbers in Ghana points to the notion that regulators have more role to play.
The call to action for accountants to join the fight against climate change is a notable one. Yet, the importance in some few years’ time would be felt only in countries where the national regulatory supervisory body has taken the action to lead the way for its members. As a matter of urgency, the ICAG should lead the way for its members in Ghana.
 A4S (2020, February) "Call to Action in Response to Climate Change" Accounting for Sustainability, https://www.accountingforsustainability.org/abn-climate-action.html (Accessed 27th February 2020).
 See Tho, Alexis (2019, November) "Finance’s role in accounting for climate change", Financial Management, https://www.fm-magazine.com/news/2019/nov/accounting-for-climate-change-201922405.html(Accessed 27th February 2020).
The author is a member of Chartered Institute of Management Accountants (CIMA-UK) and a finalist with the Association of Chartered Certified Accountants (ACCA-UK). He has presented research papers at international conferences in Europe and Africa. He does policy and practice-based research consultancy. He has completed certificate courses on climate change and financial management by Climate Disclosure Standards Board. He holds a blockchain-based certificate in Digital Currencies from University of Nicosia, Cyprus and is currently a postgraduate student at the University of Ghana Business School. His research has a transdisciplinary focus situated within the “Economics of Accounting” track. He has published in International Journal of Banking, Accounting and Finance, International Journal of Managerial Finance, Asian Journal of Accounting Research, Modern Economy, Journal of Economic Studies and Athens Journal of Business and Economics.
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