INTHEBLACK December 2021 - Magazine - Page 23
AS PA R T I E S T O T H E 2015 PA R I S C L I M AT E A G R E E M E N T L O O K T O
R E N E W T H E I R C O M M I T M E N T T O R E D U C I N G G R E E N H O U S E G AS
E M I S S I O N S , T H E F O C U S H AS S H I F T E D T O T H E E S T I M AT E D
70 P E R C E N T O F C A R B O N E M I S S I O N S G E N E R AT E D BY T H E P R I VAT E
A N D I N D U S T R I A L S E C T O R S . W H AT PA R T C A N A C C O U N TA N T S A N D
F I N A N C E P R O F E S S I O N A L S P L AY T O H E L P R E S O LV E T H I S ?
STORY PRUE MOODIE
I
n May 2021, a tremor ran around the
business world with the news that Royal
Dutch Shell had been ordered by a bottom
tier court in the Netherlands to drastically
cut its global carbon emissions targets.
The climate campaigners who brought
the action claimed the company, through its
worldwide emissions, was violating human rights
in the Netherlands because of the impact of rising
sea levels on the country’s coastline.
The twist in the ruling was that it extended
to Shell’s global Scope 2 and 3 emissions. The
ruling’s requirements on those emissions were
not strict, but ordering even a “significant bestefforts” reduction in Scope 2 and 3 emissions is
tantamount to asking a company to change its
sources of energy and its product line.
Greenhouse gas reduction commitments are
signed by national governments. In contrast, the
entities generating the emissions are companies.
They’re not bound by such commitments, although
many are taking it upon themselves to pledge to
net zero emissions within their own operations.
The obvious way for a country to reconcile
its international commitments with domestic
economic activity is through government
regulation to constrain greenhouse gas emissions
by companies, or, otherwise, incentivise them
embarking on this transformation.
Other forces are at work, too. They include
consumer choice, investor pressure and,
increasingly, climate litigation.
WHERE THE DEBATE IS NOW
In September this year, CPA Australia brought
together experts from across Asia-Pacific for a
roundtable discussion on climate change and
decarbonisation.
The discussion highlighted the growing acceptance
by the region’s governments that they needed to rise
to the challenges set by the Paris Agreement.
Additionally, there is a groundswell of public
support for measures to safeguard the biodiversity
of the region’s natural environment.
Data from Statista shows the carbon emissions
curve has flattened across all geographic areas over
the past several years, including in Asia-Pacific.
If this trend extends beyond the pandemic, it
might be a sign that the multiple pressures on
companies to cut carbon emissions are starting
to work.
However, flattening the trajectory of carbon
emissions is not enough to achieve the global
goal of limiting temperature rises. Greenhouse
gas emissions in all jurisdictions have to drop,
and quickly, to achieve this; hence this year’s
alarming assessment from the Intergovernmental
Panel on Climate Change.
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