Accounting Groups Seek Global Financial Reporting Standards on Emissions

Universal accounting standards on financial information related to climate change are the goal of the American Institute of Certified Public Accountants (AICPA) and other global accounting organizations.

In association with The Prince of Wales Accounting for Sustainability Project, the groups sent an open letter to political leaders worldwide calling for such standards.

Also in the world of accounting and climate change, forest-rich nations want any global climate treaty to allow forest carbon offsets to “hide” a portion of their own emissions from fossil fuels, The New York Times reports.

AICPA President and CEO Barry Melancon said that universal corporate accounting standards would reduce complexity and allow businesses and investors to make better decisions about reporting their climate change data, according to a press release (PDF).

The accounting organizations seek an independent, stakeholder-led body to develop and adopt the required accounting standards, in conjunction with government authorities.

“Collaboration with other major accounting bodies in international groups like the Accounting for Sustainability Project is essential to success in providing thought leadership and influence in this emerging area,” said AICPA Senior Vice President for Member Competency and Development Arleen Thomas.

Earlier this year, global accounting groups signed on to The Prince of Wale’s Accounting for Sustainability Project’s principles, which would require so-called “connected reporting,” or reporting that connects an organization’s sustainability impacts and initiatives with its financial performance.

The Prince of Wale’s Accounting for Sustainability Project developed a report that focused not only on how to “embed” sustainability considerations into general corporate thinking, but also on how to report these efforts. View the case study here (PDF).

The report noted that benefits of a move towards sustainability were reduced risk (”very” or “somewhat” likely to produce benefits at 78 percent of companies), enhanced brand and reputation (77 percent), customer retention (72 percent), and improved employee health and productivity (68 percent).

Many corporations are already reporting emissions and other climate change-related information to the Carbon Disclosure Project.

CDP’s Carbon Disclosure Standards Board has developed a draft framework that is unveiled Dec. 10 in conjunction with the Copenhagen climate talks.

The 15 accounting bodies that signed the open letter are:

– Institute of Chartered Accountants in England and Wales (ICAEW)

– The Prince’s Accounting for Sustainability Project

– The Climate Disclosure Standards Board

–  American Institute of Certified Public Accountants

– Association of Chartered Certified Accountants

–  Canadian Institute of Chartered Accountants

– Chartered Accountants Ireland

– Chartered Institute of Management Accountants

– Chartered Institute of Public Finance and Accountancy

– CPA Australia

– Hong Kong Institute of Certified Public Accountants

– Institute of Chartered Accountants in Australia

– Institute of Chartered Accountants of Scotland

– Japanese Institute of Certified Public Accountants

– South African Institute of Chartered Accountants