Posted: 09 Apr. 2019 5 min. read

Climate change

The case for business regulation

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.

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Veronica Poole

Veronica Poole

Partner

Veronica Poole is a partner at Deloitte, DTTL Global IFRS Leader and Head of Accounting and Corporate Reporting for Deloitte North and South Europe. As the Global IFRS leader and the Senior Technical Partner she is responsible for IFRS accounting quality and is the leading voice of the global Deloitte network, both internally and externally, on IFRS and corporate reporting matters. She chairs Deloitte’s Global IFRS Leadership team and is a member of the Deloitte Global Audit Quality Board. Her external appointments include: member of the UK FRC’s Corporate Reporting Council, member of the International Integrated Reporting Council, Chair of the Advisory Group to the ICAEW Financial Reporting Faculty, advisory member to the Hundred Group Financial Reporting Committee and a former member of the Financial Reporting Advisory Board to HM Treasury. She leads Deloitte’s relationship with The Prince's Accounting for Sustainability Project (A4S) and the UK Chapter Zero, The Directors’ Climate Forum. Her current priorities include influencing and driving change in the accounting and corporate reporting and in the accounting profession, including reporting of ESG and climate-related financial and business risks. She works with standard-setters, policy makers, regulators and professional bodies to advance the goal of better corporate reporting.