As we’ve seen from COP27, governments are at the forefront of the response to climate change. Over 70 countries, covering three-quarters of global emissions, have made commitments to achieving net zero. These emissions-reduction targets now need to be translated into funded and measurable actions.
For countries to achieve these targets, sustained effort will be required. The impact of every organisation’s activities on climate change needs to be understood and then mitigated. Finance professionals can provide leadership and expertise as organisations implement plans for climate action.
Finance professionals can provide leadership to put climate action in the mainstream of every public sector organisation
What is green budgeting?
Green budgeting has been described by the OECD as ‘a compass for achieving our environmental objectives’. It is an approach that enables organisations to use their existing budget process to consider the impact their organisation’s activities have on their environmental objectives. It can be used to align budgets more closely with climate change and sustainability goals.
Budgets demonstrate the priorities of public sector organisations and are a powerful tool for both raising awareness of an organisation’s environmental objectives and operationalising them. Within public sector organisations, whether large or small, finance professionals are central to the budgeting process.
ACCA’s green budgeting toolkit identifies how finance professionals working in the public sector can implement green budgeting approaches:
- ‘Understanding green budgeting’ outlines the definition of green budgeting and identifies four key motivations for public sector organisations adopting green budgeting
- ‘Getting started’ highlights three overarching principles to consider at the outset.
- ‘Making green budgeting a success’ focuses on the implementation process, summarising two of the main green budgeting tools that the public sector can adopt and highlighting the five principal factors needed to build an effective approach.
- ‘Learning from others’, the appendix, provides five examples of different public sector organisations across the world that are adopting green budgeting approaches.
Over time, green budgeting should enable organisations to move from activities and investments with damaging impacts on the environment towards more sustainable and even ‘climate positive’ actions. Professional accountants in the public sector will be essential to this task; they can provide leadership and expertise to put climate action in the mainstream of every public sector organisation.
More information
See ACCA’s CPD module on green finance
Read the AB article Sustainability accounting will support governments
