Only 18% of the world’s businesses have a greenhouse gas emissions target in place, while a further 18% are in the process of developing one, according to ACCA research.
However, 42% of respondents to ACCA’s latest quarterly Global Economic Conditions survey revealed they have no target at all in place, despite global ambitions, such as the Paris Agreement, to limit the impact of climate change.
These targets and legislative deadlines should have engendered a sense of urgency among organisations to take steps towards reducing their carbon footprint and transitioning to a more sustainable and low-carbon future. Setting a net-zero target is a major milestone on that road.
Businesses in Western Europe are the most likely to have emissions targets in place.
Over 50% of respondents with emissions targets have publicly disclosed those targets; 32% have not. All of the 21% of respondents in the Caribbean with an emissions target said that target has been publicly disclosed.
Three-quarters of respondents have a plan in place for transitioning to net zero. Organisations in North America and Central and Eastern Europe perform best here.
Some countries have local initiatives in place, such as the UK’s Transition Plan Taskforce (TPT) to support climate transition plans in the private sector. The TPT is informing and building on international disclosure standards.
Professional accountants can help organisations in their transition planning by doing the following:
- Consider setting specific, measurable and achievable targets for emissions reductions and renewable energy use. Make sure they are aligned with international climate agreements and industry best practices.
- Assess current emissions and energy use. The analysis should include a detailed inventory of greenhouse gas emissions, energy use and other sources of emissions, which will form the baseline for your transition plan and be used to track progress over time.
- Identify opportunities for emissions reduction. Consider the use of renewable energy and energy-efficient technologies and measures.
- Based on the opportunities you have identified, develop strategies and action plans for reducing emissions and transitioning to net zero. These need to be realistic, achievable and aligned with the organisation’s goals and targets.
- Implement the strategies and actions in the organisation’s transition plan. Monitor emissions and energy use over time to ensure your organisation is on track. Regular reporting and communication will help to keep stakeholders informed and engaged.
- Regularly review and update the transition plan to keep it relevant and effective. Consider new technologies and approaches that may become available, and make changes as needed to ensure the organisation will achieve its transition goals.
What will it cost?
Responses to ACCA’s survey indicate that many organisations are still unaware of the costs of achieving emissions plans and hitting targets. This can be a complex process, as it will depend on a variety of factors, such as the size and scope of the organisation, the specific goals and targets, and the technologies and measures used to reduce emissions and transition to net zero.
Here are some of the steps professional accountants can take to estimate the cost of an organisation’s transition plan:
- Identify the measures and technologies that will be used to reduce emissions and transition to net zero. This may include the use of renewable energy and energy-efficient technologies.
- Estimate the cost of each measure and technology that will be used. This may involve working with suppliers and experts, as well as considering the costs of installation, maintenance and operation.
- Consider the cost of financing these measures and technologies. This may include the cost of borrowing, as well as any incentives or subsidies to help offset the cost of the transition.
- Consider the benefits of reducing emissions and transitioning to net zero, including to the environment, public health and to the organisation’s financial performance and reputation. This can help to justify the cost of the transition plan and ensure it is seen as a strategic investment.
Find more resources and insights at ACCA’s sustainability hub