Rishi Sunak’s speech at COP26 set in motion further developments to support meeting net-zero targets, which are likely to have significant impact on businesses in the future.
Understanding that transitioning to greener operations requires significant investment, further financial support and incentives were announced to encourage organisations to double down. The plans aim to mobilise the private sector, recognising its ability to act as crucial catalyst for change and requiring efforts to be led from the top. And with increasing pressure from investors and consumers alike, ESG is likely to take centre stage in organisations, driving strategy and change – rather than being just a nice to have.
As a result of metrics being unreliable and incomparable, and loopholes exposed to enable green washing practices, the IFRS Foundation also launched the International Sustainability Standards Board (ISSB) to create greater transparency and accountability in ESG reporting. This much needed global reporting framework aims to measure the right sustainability metrics, enabling investors and other stakeholders to make sound decisions – driving greener strategic decisions and actions.
As for talent, this represents a significant opportunity to operate – particularly within accountancy frameworks. Professionals that have dedicated experience in climate risk and sustainable finance will continue to be in high demand, whilst others will be looking to expand their remits and upskill to meet ESG targets. Consulting firms will also play a crucial role in helping organisations to transform, in order to meet the sustainability targets set by the government during COP26. With the Chancellor of the Exchequer saying the UK would become “the world’s first ever net-zero-aligned financial centre”, there are plenty of changes to be working through.