INTHEBLACK February 2022 - Magazine - Page 8
GET SMART
// C PA A U S T R A L I A P O L I C Y
AT A G L A N C E
FEBRUARY
UPDATE
Dr John Purcell FCPA,
CPA Australia’s former policy
adviser for environmental, social
and corporate governance.
One of the goals set out in
the 2015 Paris Agreement
is to achieve net-zero
emissions in the second
half of this century.
This commitment to netzero emissions ties in
with the goal to limit
global warming to 1.5°C,
for which rapid and farreaching transitions are
required across sectors.
ZERO
COMMITMENT
THE NOTION OF NET-ZERO HAS GAINED SIGNIFICANT MOMENTUM
AND CURRENCY IN HOW BUSINESSES ARE POSITIONING
THEMSELVES IN A CARBON-CONSTRAINED WORLD.
CLICK HERE
TO READ
CPA Australia’s
statement of
commitment to
net-zero emissions
CLICK HERE
TO ACCESS
an INTHEBLACK
article on climate
change and
decarbonisation
8 ITB February 2022
I
n October 2021, CPA Australia, along with nine of the
world’s largest professional accounting organisations,
committed to achieving net-zero greenhouse gas
(GHG) emissions in their operations and to report
annually on progress towards this goal.
What is the background to such an initiative, and
what are the key considerations in making such a
commitment?
Through the 2015 Paris Agreement, 188 parties have
agreed to hold the increase in the global average
temperature to well below 2°C above pre-industrial
levels, pursue efforts to limit the temperature increase
to 1.5°C, and achieve net-zero emissions in the second
half of this century. In pursuit of these goals, and as part
of an ambitious cycle, countries are required to
progressively strengthen their targets – nationally
determined contributions, or NDCs – every five years.
The net-zero emission imperative is further
emphasised in the Intergovernmental Panel on Climate
Change (IPCC) special report on global warming of
1.5°C , in which it warns that rapid and far-reaching
transitions are needed across economic sectors and
industrial systems to limit global warming to 1.5°C.
According to the report, limiting warming will
require carbon dioxide emissions to reach net-zero
by about 2050, followed by neutrality for all other
greenhouse gases.
The coalescing around the net-zero imperative is
evident in the activities of institutional investors. For
example, Climate Action 100+ is an investor-led initiative
that seeks to systematically engage with GHG emitters
and companies that have significant opportunities to
drive the clean energy transition. The initiative has more
than 615 investors responsible for more than US$55 trillion
(A$74 trillion) of assets under management and is
coordinated by regional investor networks. The investment
coverage amounts to more than 80 per cent of global
industrial emissions.
“Real economy” firms are increasingly cognisant of
the impact that climate change will have on their
operations, their suppliers and customers, and are thus
responding either directly to the Paris Agreement or to
instruments that have an alignment to climate changedriven mitigation and adaptation measures, again
centred around the goal of net-zero.
For all organisations, the making of such
commitments should not be taken lightly. More than
lapsing into the old trap of “greenwashing”, which has
often plagued confidence in sustainability reporting,
shortcomings around net-zero statements potentially