COP26 highlighted the many ways that professional accountants can play an important role in tackling climate change (Getty Images / KDP)

To truly realize how closely linked accounting, finance and climate action are, look no further than the 26th United Nations Climate Change Conference (COP26), which concluded in Glasgow, Scotland. , last month.

“We have found that climate change issues are highly interconnected and that climate action must include strategies to address the broad societal, economic and environmental implications,” said Davinder Valeri, director of strategy, risk and of performance at CPA Canada.

Below are the key results of climate finance that CPAs should take note of, as they will all impact businesses in the future.


The International Sustainability Standards Board (ISSB) was formally established by the IFRS Foundation to develop indispensable global standards for reporting on environmental, social and governance (ESG) issues, with emphasis in a first time on climate change. CPA Canada was among the private and public institutions publicly supporting Canada’s bid to host the world office.

Those supporting the Canadian bid were thrilled when it was announced that the Montreal and Frankfurt, Germany offices (the seat of the board of directors and the office of the president) would be responsible for key functions supporting the new board of directors. ‘administration.

“This is an exciting time for Canada to be selected as the core ISSB office,” said CPA Rosemary McGuire, Director of External Reports and Capital Markets at CPA Canada. “Strong disclosure plays an important role in ensuring an efficient allocation of capital and enabling financial markets to properly assess risk. International sustainability reporting standards will give businesses, investors and donors greater confidence that their activities and investments support the transition to a low-carbon economy. ”

Ryan Riordan, professor of finance and research director at the Institute for Sustainable Finance at Queen’s University, who attended COP26, hopes that the creation of the ISSB and Canada’s hosting of an office in Montreal will improve the quality of sustainability reporting.

“This will make it much more likely that these standards take into account the important perspectives of our large emitters and our sectors in transition,” he said.


An economy-wide transition is needed to meet the Paris Agreement target of limiting global temperature rise to 1.5 ° C above pre-industrial levels. To help achieve this goal and accelerate the transition to a net zero emissions economy, the Glasgow Financial Alliance for Net Zero (GFANZ), led by Mark Carney, was created to bring the financial sector together.

“A total of 450 companies have collectively committed $ 130 trillion in private capital to transition to a net zero emissions economy,” said Valeri. “There is still work to be done to ensure that appropriate transition pathways are in place and to avoid greenwashing, but this is an important step in the right direction. ”


The UK will become the first financial center aligned with net zero, which means the government will require all financial companies to publish their plans to decarbonise and meet the net zero targets. The UK government will also put in place strict oversight to ensure financial flows move with precision to support net zero.

“This will require asset managers, owners of regulated assets and listed companies to publish transition plans or provide an explanation if they haven’t,” said Valeri.

The government will set up a task force to develop a “gold standard” for transition plans and measures to help tackle greenwashing.

Experts see it as an example, with the hope that other nations will follow suit. “In Canada, this is where this transitional taxonomy (tools to help investors and businesses make evidence-based decisions about sustainable economic activities) is going to be important,” says Riordan, adding that the position of the United Kingdom is somewhat advanced since they decarbonized a large part of their economy in the 90s.


One of the major achievements of COP26 is the agreement reached on Article 6. Although this agreement on carbon markets has its origins in the Paris Climate Agreement, the pact was only finalized. ‘in Glasgow, when nearly 200 countries signed this agreement, which sets the rules around international trade to reduce emissions.

The importance of this article is the governance of how countries work together to create cheaper GHG reductions. It defines how countries should approve the transfer of carbon from one country to another and adjust the GHG inventory to show that the emission reduction is credited to another country.

Article 6 is complemented by the commitment to phase out coal-fired electricity, with 46 countries recognizing that coal-fired electricity is the main cause of the global temperature rise. These countries recognize the need to quickly implement clean energy and move this transition forward, as evidenced by the signing of the Declaration to Transition from Global Coal to Clean Energy.

While not perfect, “the pledge is said to ‘keep 1.5 ° C alive’,” Valeri said, adding that the pledge does not include Russia, China or India. , some of the biggest consumers of coal. “However, scientists believe it could help the world avoid a 0.3 ° C warming by 2040. And when every increment counts, it could have a real impact.”

Riordan considers this important step to be one of the most important results of COP26. “Coal, after methane, is the most important part of the fight against emissions,” he says. “It is an extremely low energy density compared to the amount of CO2 it emits, [so] finding ways to replace coal with other types of fuels is an extremely important achievement.

Continuing their commitments to reduce GHG emissions, more than 100 countries have signed a global partnership between the US and the EU to reduce GHG methane emissions by 2030. The Global Methane Pledge will limit methane emissions by 30% from 2020 levels.


More than 100 world leaders have pledged $ 19.2 billion to end deforestation by 2030. “Making the commitment to action will be critical, with both business and finance having a role to play in making it happen. response, ”says Valeri.

Several countries have also committed $ 1.7 billion in funding to go directly to indigenous peoples and communities as part of a broader commitment to deforestation, in recognition of their role in protecting forests and land. .

The commitment to stop deforestation by 2030 is reinforced by the commitment to increase reforestation after 2030. “There are many creative funding opportunities around reforestation,” says Riordan, explaining the positive financial implications of doing this. may have. “We can set up innovative financing vehicles to support the end of deforestation and [initiate] reforestation, ”he says, for example by using forests as an asset in a bond or an asset-backed loan.


Climate finance initiatives and their implications were highlighted at this year’s conference, but the human rights implications of this climate crisis cannot be ignored, Valeri said.

“We have seen with our own eyes how social inequalities are exacerbated by climate change,” she says. “There is a need to ensure that no one is left behind in the transition to net zero economies, especially those working in sectors, cities and regions dependent on carbon-intensive industries and productions. . ”

At this point, the ‘Just Transition Declaration’ has been signed by Canada and over 30 other countries, committing to adopt strategies that ensure that ‘workers, businesses and communities are supported as countries move forward. greener economies, ”she says.


CPA Canada has been at the forefront of understanding climate change as a business issue. Watch this exclusive interview with Mark Carney as he talks about the future of business and saving the planet. Check out these climate change resources for accountants and find out why the sustainability manager position is growing in popularity.