KARACHI: Pakistan in recent years has been facing extreme climate conditions and more than ever before climate or rather managing climate and its connected maladies that pose a threat, time is ripe for the government climate and industrial departments to take appropriate measure to combat the situation, industrial and financial professionals were of the view.
A lot of the environmental, social and governance costs needed for managing climate change are ‘off balance sheet’.
With game changing strategic investments like China Pakistan Economic Corridor around the corner, the cost to Pakistan of not investing in environmental, social and governance in the short, medium and long term might be a price too great.
The industrial and social sector have seconded the professional accountants, playing an important role in helping companies to manage and report climate-related risks more effectively. This is particularly clear in light of recent European Union’s adoption of non-binding guidelines for non-financial information reporting, which is another example of the global momentum towards better-informed capital markets and companies fit for the challenges of today’s world.
Arif Masud Mirza, regional head of policy, Association of Chartered Certified Accountants (ACCA) has welcomed the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD) as an important step towards the better allocation of capital, by incorporating the effect of climate change in investment decisions. Prime export-oriented industrial people Agha Saddain, Ghulam Rabbani, Sanaullah Khan, Ibrahim Qureshi, Shakeel Ahmad besides social sector persons Qamar Qureshi and others have opined that particular, climate-related risks could affect the carrying value of assets and goodwill and in some cases the going concern status of the business.
Yen-pei Chen, Subject Manager-Corporate Reporting at ACCA said, “Four thematic areas of TCFD’s recommendations-governance, strategy, risk management and metrics and targets provide a useful framework for disclosure”.
Accounting standard setters such as IASB should be giving greater priority to closing the long-standing gap that exists in reporting the effect of pollutant pricing or emissions trading systems.
Published in Daily Times, July 15th , 2017.