Mark this Earth Day by investing in green finance skills
This year’s Earth Day on Saturday should serve as an urgent call to action for businesses. As a community, we must rapidly reduce our greenhouse gas emissions and help our society adapt to human-caused climate change.
If businesses are to deliver on their sustainability strategies and fund essential innovation, they also need access to well-priced capital – crucial in an era of rising interest rates. Recent research by ACCA, Green finance skills: the guide, highlights that lenders are increasingly offering attractive “green rates” to organisations that meet their sustainability requirements.
The green transition demands long-term financing, which is why products such as green bonds and sustainability-linked loans will be critical to enabling us to reach net zero by 2050.
Green finance is potentially a super-weapon in the battle for net zero. It will provide the funding that enables carbon-intensive industries and companies to reduce their emissions. Green skills will empower businesses to turn their good intentions on climate change into genuine progress.
With financial institutions under pressure from governments, regulators, and other stakeholders to support the sustainability transition going forward, the trend towards green finance will only grow in importance.
Green finance is an engine of competitive advantage and a great way for businesses to fund themselves more cost-effectively. So, it’s concerning that the majority of businesses say they lack information on climate finance opportunities and climate risk management. Our surveys of finance professionals across the world indicate that the majority of businesses are not so far considering using green finance products – a huge missed opportunity.
In search of skills
Another challenge is that many businesses lack the skills and expertise to develop, implement and manage robust environmental, social and governance (ESG) strategies.
To achieve the transition to net zero, we need to upskill the global workforce – at speed and at scale. Upskilling on sustainability is vital for many professions.
But it is particularly important for finance and accountancy professionals who must be able to analyse the impact of climate and nature-related trends on their organisation, source and manage green finance products, and inform, drive, and embed their organisation’s sustainability strategy. They can also help to train other staff and develop the talent who will enable transformation.
How ACCA is playing its part
At ACCA, we believe strongly in the need for a better, fairer world that works for everyone. We also believe that the accountancy profession is in a unique position to drive change and help reset the global economy for more sustainable growth.
Recognising that accountants need in-depth knowledge of the sustainability agenda, we are supporting our members in all sorts of ways, including a global webinar for our members around the world earlier this week. The webinar aimed to help them understand which green finance and sustainability skills they need to support the sustainability transition.
We have also worked with CFA Institute to jointly launch a Climate Finance course, a practical course designed to support business and finance professionals on climate-related finance matters.
We’ll be stepping up this support with the wider adoption sustainability disclosure standards across many countries. The recently-formed International Sustainability Standards Board will soon be issuing its first two reporting standards, which will be a significant step forward.
Route to net zero
No one wants to leave an uninhabitable planet to our descendants. That’s why we must do as much as possible, as soon as possible, to achieve net zero – the state when the addition of greenhouse gases to the atmosphere is balanced by their removal from it. Green finance and wider sustainability skills and knowledge will be critical to success in this endeavour.
It will also help them prepare well in advance for the emerging and systemic risks brought about by climate change – a far greater potential danger than the most powerful and ruthless of business rivals.
A focus on green skills can also have a positive social impact by generating jobs for disadvantaged and underrepresented communities.
With access to green finance and green skills, and with the support of knowledgeable finance professionals, businesses will be able to develop environmentally friendly products and services, appeal to new types of customer, and build sustainable business models.
They will then be well-placed to seize what Mark Carney, the United Nations special envoy on climate action and finance, has described as “the greatest commercial opportunity of our age”.
To learn more about the ACCA research, visit www.accaglobal.com/greenfinanceskills