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The outlook for our planet is concerning. In October, the Intergovernmental Panel on Climate Change published a report showing that many ecosystems have already changed due to global warming. Climate change will have a marked impact on human health, food security, water supply, human security, and economic growth. The scientific consensus is that time is running out.
Climate change has already caused immeasurable human cost, which is only expected to increase. But as a financial community, as businesses and as individuals, we have many economic, political, local and global concerns. Where should climate fit in?
In the whirlwind of the lives we lead, I find that children act as a good barometer in identifying what really matters. My children keep asking why we are failing to do more on climate. They worry at the simple projection that in ten years most of the coral reefs will be lost, and with them the stunning and diverse sea life they support. And of course, climate change for them is not just about pretty corals and fish. They realise that floods will wipe out fertile deltas, and rising sea levels will mean the loss of low-lying islands and cities. They Googled the map of what the world would look like. And all will be because we, humanity, have allowed it to happen.
So for me this is no longer just a nicely coined phrase by Mr Carney of the ‘tragedy of horizons’. It’s not just a scientific report, or another worthy charitable cause. For me, this is now real and it is personal.
Business can and should be a powerful platform for change. If governments will not act, business should. I have always been a strong believer that market forces are the best driver for change. And indeed market forces have made us think about sustainable value creation and Sustainable Development Goals, responsible capitalism, social licence to operate, integrated thinking and even integrated reporting. The market-driven process is that the brave and the best will lead, consensus will emerge, and the laggards will eventually be forced to comply through regulation. But we don’t have time for this process. Climate change is urgent.
So how do we accelerate change? The answer has to be through regulation. And to regulate in a way that is focused and achievable in the short term.
The A4S Report Financing our Future made recommendations to securities market regulators that I strongly agree with. We need to follow these recommendations, create expectations for global organisations and follow this with hard regulation.
My call is for joined-up standard-setting and joined-up oversight. We don’t have time to rework our existing regulatory structures to respond to the urgent challenge of climate change. So we need our mainstream reporting to incorporate the latest thinking and recommendations. The case for this is overwhelming and the urgency is obvious. We need to measure and report what matters about climate now, to enable business to be the powerful platform for change that it can and should be.
Veronica Poole is one of the judges for the Finance for the Future Awards, which are open for entries until 17 May 2019. This year there is an additional Judges' Award to be presented, recognising Climate Leadership, which will be selected from the finalists from across all the categories.
Veronica Poole is a vice chair of Deloitte UK, Global IFRS and Corporate Reporting leader and NSE Head of Accounting and Corporate Reporting. She leads Deloitte’s contributions to the WEF IBC Stakeholder Capitalism Metrics, and has facilitated the work of the leading sustainability standard-setters to develop a prototype climate standard, helped launch the UK Directors’ Climate Forum—Chapter Zero, and spearheaded Deloitte’s partnership with the A4S Finance for the Future Awards.