How accountants can help fight climate change ? | Eu-Lin Fang | TEDxESSECAsiaPacific

Summary

Yulin, an accountant turned sustainability expert, discusses the pivotal role of accountants in combating climate change. She traces the history of accounting principles established by Luca Pacioli, which fostered trust in commerce. Yulin emphasizes the urgency of addressing climate change, highlighting the critical levels of CO2 in the atmosphere and the global temperature rise. She introduces the 1.5 and 2-degree Celsius benchmarks, explaining their significance to our future. Yulin points out the challenges in measuring and reducing carbon emissions but expresses optimism in technology, nature-based solutions, and collective action. She argues that accountants, with their expertise in measurement and verification, are uniquely positioned to contribute to climate change mitigation, urging everyone to join the fight for a sustainable future.

Takeaways

• 📚 The principles of accounting, including debits and credits, were established by Luca Pacioli in his book 'Summary of Arithmetic, Geometry, Proportions, and Proportionality', which laid the foundation for trade and commerce development.
• 🌱 Yulin transitioned from a financial auditor to a sustainability and climate change professional, highlighting the relevance of accounting in environmental issues.
• 🔢 The current CO2 concentration in the atmosphere is at 418 parts per million (ppm), which is significantly higher than the natural levels of 200-300 ppm over the past 800,000 years.
• ⚠️ An increase of 1.1 degrees Celsius in global temperature since pre-industrial times is already causing noticeable effects, with scientists warning of more severe impacts at 1.5 and 2 degrees Celsius increases.
• 🌊 The world's coral reefs, wheat production, and overall climate stability are at risk with higher temperature increases, emphasizing the urgency to limit global warming to 1.5 degrees Celsius.
• 🌐 There are approximately 51 gigatons of CO2 in the atmosphere, which is equivalent to 51 billion tons, and scientists advise halving emissions by 2030 to stay within a 1.5-degree scenario.
• 📉 Despite the global slowdown in 2020 due to COVID-19, carbon emissions only decreased by 6-7%, indicating the enormity of the challenge to meet decarbonization targets.
• 💡 Three areas of hope in combating climate change include technology and innovation, nature-based solutions, and community, business, and government collaboration.
• 🌿 Accountants can play a pivotal role in fighting climate change by leveraging their expertise in measurement, disclosure, adding credibility, and driving change in sustainability standards.
• 🌟 The future envisioned by Yulin includes a shift to electric vehicles, renewable energy sources, and a commitment to education and clean air for all, making it a future worth fighting for.

Q & A

What significant event happened in 1494 that influenced accounting?

In 1494, Luca Pacioli, a Franciscan friar and mathematician, published the book 'Summary of Arithmetic, Geometry, Proportions and Proportionality' which helped establish the principles of accounting, particularly around debits and credits.

Why are debits and credits important in accounting?

Debits and credits are fundamental to accounting as they form the basis for recording financial transactions, enabling the maintenance of financial records and the preparation of financial statements that instill trust and accountability among investors and stakeholders.

What is the significance of the number 418 ppm in the context of climate change?

418 ppm refers to the concentration of carbon dioxide in the atmosphere, measured in parts per million. It is significant because it indicates a level that is higher than the natural oscillation range of 200-300 ppm, which has been the norm for approximately 800,000 years.

How does an increase in carbon dioxide levels affect the Earth's temperature?

An increase in carbon dioxide levels leads to more greenhouse gases in the atmosphere, which trap heat and cause the Earth's surface temperature to rise.

What are the potential consequences of the Earth's temperature rising by 1.5 degrees Celsius?

At 1.5 degrees Celsius of warming, scientists predict that 70 to 90 percent of coral reefs will vanish, reproduction in certain species will decrease by seven percent, and there will be a significant reduction in wheat production in the tropics.

What is the difference between the impacts of a 1.5 degrees Celsius and a 2 degrees Celsius temperature rise?

At 2 degrees Celsius of warming, the negative impacts are more severe, with 99 percent of coral reefs expected to vanish, a 16 percent reduction in wheat production in the tropics, and an increased frequency of heatwaves and extreme weather events.

How many gigatons of CO2 are emitted into the atmosphere annually, and what is the goal to limit global warming to 1.5 degrees Celsius?

Currently, approximately 51 gigatons of CO2 are emitted into the atmosphere annually. To limit global warming to 1.5 degrees Celsius, scientists recommend halving these emissions by 2030 and reaching net-zero emissions by 2050.

What was the reduction in global carbon emissions during the COVID-19 pandemic in 2020?

Despite the significant reduction in global activities during the COVID-19 pandemic in 2020, the decrease in carbon emissions was only around 6 to 7 percent.

What are the three areas of hope mentioned in the transcript for combating climate change?

The three areas of hope mentioned are technology and innovation, nature-based solutions, and community, businesses, and governments setting ambitious targets to confront and fight climate change.

How can accountants contribute to the fight against climate change?

Accountants can contribute by measuring and disclosing greenhouse gas emissions, adding credibility through verification of carbon offsets, and driving change by influencing global governance and reporting standards related to sustainability.

What is the role of accountants in ensuring trust and accountability in the context of ESG (Environmental, Social, and Governance) reporting?

Accountants play a crucial role in ESG reporting by applying their expertise in measurement, disclosure, and verification to ensure the accuracy and reliability of sustainability information, thereby fostering trust and accountability among stakeholders.

Outlines

00:00

🌱 The Pivot to Sustainability

Yulin, an accountant by profession, narrates her transition from financial auditing to sustainability and climate change. She poses a question about the relevance of accountants to climate change, promising to address it later. Yulin takes us back to 1494 during the Italian Renaissance, introducing Luca Pacioli, a mathematician who published 'Summary of Arithmetic, Geometry, Proportions, and Proportionality,' which laid the foundation for modern accounting principles, particularly the use of debits and credits. These principles are crucial for financial transparency and trust, enabling investors and stakeholders to make informed decisions. Yulin emphasizes the historical significance of these principles in fostering trade and commerce.

05:02

🌡️ Climate Change: The Urgent Numbers

Yulin shifts the focus to climate change, presenting the current CO2 levels in the atmosphere at 418 parts per million (ppm), a level significantly higher than the natural oscillation range of 200-300 ppm over the past 800,000 years. She explains the rapid increase in CO2 levels due to industrialization and its impact on global temperatures. Yulin highlights the difference between a 1.5-degree Celsius and a 2-degree Celsius increase in global temperatures, noting the severe consequences of the latter, such as the near-total loss of coral reefs, reduced crop yields, and increased frequency of extreme weather events. She stresses the importance of reducing carbon emissions to stay within a 1.5-degree Celsius increase, pointing out the challenge of halving emissions by 2030 and reaching net-zero by 2050.

10:03

🌟 Hope Through Technology and Action

Despite the daunting challenge of decarbonization, Yulin expresses optimism, citing technology and innovation, nature-based solutions, and collective action as key areas of hope. She mentions the significant advancements in renewable energy and carbon capture technologies. Yulin also discusses the role of forests and mangroves in sequestering CO2. She notes the increasing commitment from businesses and countries to achieve net-zero emissions, with many doubling their commitments in 2020 despite the COVID-19 pandemic. Investors are also showing interest in companies with strong climate and ESG (Environmental, Social, and Governance) resilience, indicating a growing market demand for sustainable practices.

15:06

🔍 The Role of Accountants in Climate Change

Yulin argues for the critical role of accountants in combating climate change. She suggests that accountants' expertise in measurement, disclosure, and verification can be applied to climate-related data, enhancing credibility and trust. She points out the need for standardized sustainability reporting and the potential for accountants to drive change in this area. Yulin also observes a growing interest among young accountants to engage in climate action, using their skills to contribute to a sustainable future. She concludes by envisioning a future with clean energy, clear skies, and equal educational opportunities, emphasizing the importance of fighting for such a future in every professional capacity.

Keywords

💡Accountant

An accountant is a professional who specializes in the measurement, processing, and communication of financial information about economic entities such as businesses and corporations. In the video, the speaker transitions from a financial auditor to working in sustainability and climate change, highlighting how accountants' skills in measurement and disclosure can be applied to environmental issues. The video suggests that accountants have a role to play in ensuring transparency and accountability in climate change mitigation efforts.

💡Sustainability

Sustainability refers to the ability to maintain processes or conditions so that they can continue over time without being depleted or causing significant harm. The video discusses the speaker's shift from traditional accounting to focusing on sustainability, particularly in the context of climate change. It emphasizes the importance of sustainable practices for the long-term health of the planet and its inhabitants.

💡Climate Change

Climate change refers to long-term shifts in temperatures and weather patterns, primarily caused by human activities such as the burning of fossil fuels and deforestation. The video makes climate change the central issue, discussing the role of carbon dioxide emissions and the need to limit global temperature increases to prevent catastrophic effects on ecosystems and human societies.

💡Carbon Dioxide (CO2)

Carbon dioxide is a greenhouse gas that traps heat in the Earth's atmosphere, contributing to global warming and climate change. The video mentions '418 ppm' as the current concentration of CO2 in the atmosphere,远超 natural levels, indicating a significant human impact on the climate system.

💡ppm (Parts Per Million)

ppm stands for 'parts per million' and is a unit of measurement used to describe the concentration of a substance in a mixture. In the context of the video, ppm is used to quantify the levels of carbon dioxide in the atmosphere, with the speaker highlighting the current concentration of 418 ppm as a concerning figure for climate stability.

💡Decarbonization

Decarbonization is the process of reducing the amount of carbon, particularly carbon dioxide emissions, in the atmosphere. The video discusses the need for significant decarbonization to limit global temperature increases and mentions the target of reducing emissions by 11.7% annually to achieve a 1.5-degree Celsius scenario.

💡ESG

ESG stands for Environmental, Social, and Governance criteria, which are used to evaluate the sustainability and ethical impact of an investment in a company or business. The video touches on the growing interest of investors in companies that are resilient in terms of ESG factors, particularly in the context of climate change.

💡Coral Reefs

Coral reefs are ecosystems consisting of underwater colonies of corals. They are sensitive to changes in water temperature and acidity, which are affected by climate change. The video mentions the potential loss of 70 to 90 percent of coral reefs in a 1.5-degree Celsius warmer world, illustrating the vulnerability of these ecosystems to climate change.

💡Renewable Energy

Renewable energy refers to energy sources that are naturally replenished on a human timescale, such as sunlight, wind, and water. The video identifies renewable energy as a key area of technological innovation and hope in the fight against climate change, as it provides an alternative to fossil fuels that contribute to CO2 emissions.

💡Carbon Offsets

Carbon offsets are reductions in emissions of carbon dioxide or other greenhouse gases made to compensate for emissions made elsewhere. The video suggests that accountants can play a role in verifying the quality and quantity of carbon offsets, ensuring that they are a credible means of reducing net carbon emissions.

💡Global Governance

Global governance refers to the mechanisms, processes, and institutions through which actors cooperate to address global problems. The video mentions the International Financial Reporting Standards (IFRS) Foundation's role in potentially harmonizing sustainability reporting standards, indicating a move towards more standardized and accountable global governance in the area of climate change.

Highlights

Yulin, an accountant, transitioned to sustainability and climate change, showcasing a career pivot from financial auditing.

Luca Pacioli, a Franciscan friar and mathematician, published 'Summary of Arithmetic, Geometry, Proportions, and Proportionality', establishing foundational accounting principles.

Accounting principles of debits and credits are crucial for trade and commerce development, fostering trust and accountability among investors and stakeholders.

The speaker emphasizes the importance of financial information in making investment decisions, highlighting the balance between trust and accountability.

Carbon dioxide levels in the atmosphere have reached 418 parts per million, a significant increase from pre-industrial levels.

Pre-industrial levels of carbon dioxide were stable between 200-300 ppm for over 800,000 years, with changes occurring over long time frames.

The increase in CO2 levels post-industrialization has led to a rise in Earth's surface temperature, with current levels at 1.1 degrees Celsius above pre-industrial times.

Scientists warn of drastic environmental changes at 1.5 and 2 degrees Celsius increases in global temperature, including coral reef loss and reduced agricultural yields.

The current atmospheric CO2 is equivalent to 51 gigatons or 51 billion tons, requiring significant reduction to meet climate goals.

To stay within a 1.5-degree Celsius increase, emissions need to be halved by 2030 and reach zero by 2050.

Despite the COVID-19 pandemic and reduced activities in 2020, carbon emissions only decreased by 6-7 percent, indicating the scale of the challenge ahead.

Three areas of hope in combating climate change include technology and innovation, nature-based solutions, and community, business, and government action.

The number of companies and countries committing to net-zero emissions doubled from 2019 to 2020, showing growing commitment despite global challenges.

Investors are increasingly interested in companies with strong climate and ESG (Environmental, Social, and Governance) resilience.

Accountants can play a pivotal role in the fight against climate change through measurement, disclosure, adding credibility, and driving change.

The future envisioned by the speaker includes a shift from fossil fuels to renewable energy sources and a world with clear blue skies and accessible education.

Every individual, regardless of their role, has a part to play in fighting climate change, emphasizing collective responsibility and action.

Transcripts

[Music]

hello everyone

my name is yulin and i'm an accountant

for a good proportion of my

professional career i was a financial

auditor

but a few years ago i pivoted to

something else

so nowadays when people ask me yulin

what is it that you do

that's it i'm in sustainability and

climate change

then they ask me how is it that you can

become

from accountant to become in climate

change

then also they asked me this question

what do

accountants have to do with climate

change

well i'll answer that question in a bit

but first

i wanted to take you to this year about

500 years ago

1494. now this year is pretty special

it was the period of the italian

renaissance

so there was art and also commerce

booming

in italy and there was a man

a franciscan friar a mathematician

called luca pacioli

so luca pacholi was a mathematician

and he created and published this very

important book

called the summary of arithmetic

geometry

proportions and proportionality it's a

bit of a mouthful but it's actually a

very important book

it's so important because it actually

helped to establish

the principles of accounting

particularly around

debits and credits many people have said

that it's because of these principles

that trade

commerce continued to develop

so maybe let me give you an example why

are these principles so important

say you are an investor okay you want to

have a look

at a company on whether or not to invest

and you say

let me have a look at those financial

information the financial statements

so you get the financial statements and

you turn to the balance sheet and you

say

hmm pretty healthy balance sheet return

to the p

l and say lots of profits as well i'll

invest in this company

so these financial information actually

engenders

trust and accountability

and it's these principles that have been

used by accountants

that have been actually also relied on

by investors

and also stakeholders that engendered

trust and accountability

now i want to move on to another topic

something that is i think close to

everybody's heart

in this audience today something that

affects all of us

your families your future families

investors companies as well

and something that i feel now that i'm

in this space we haven't properly

accounted for

and we also haven't been felt

accountable to

and guess what that that the issue is

climate change i want to now

dish out three numbers and also three

letters

418 ppm what is 418 ppm

so firstly ppm stands for parts per

million

and that's a measure of the

concentration in carbon dioxide

in the atmosphere 418 is the level

of the carbon dioxide in the atmosphere

and

it's not a good level let me tell you

why

so as far as we could actually record

the amount of carbon dioxide in the

atmosphere and we could go back pretty

long time and quite surprised

800 000 years the carbon dioxide is

always

oscillated between 200 and 300 parts per

million

never above 300 and the changes

in the oscillation of carbon dioxide

over 200 to 300 ppm

it occurred over tens and thousands of

years

so very long time frames and the earth

could adapt accordingly

naturally but something happened

about 100 plus years ago

pre-industrialization happened

and our parts per million managed to

actually go through the

300 ppm level and smash

through 400 ppm so

we are here at 418 ppm

and some might ask like what's the big

deal

it's just a number some of you may know

that greenhouse gas emissions actually

traps

heat in the atmosphere greenhouse gases

like

carbon dioxide that increases

the surface temperature of earth so some

ask me so

exactly how much has the temperature

increased from pre-industrial levels

i'll show you a number

1.1 degree celsius from pre-industrial

levels

people always ask me actually that is

quite trivial

what's the big deal about 1.1 degrees

celsius

actually people are already feeling the

effects of climate change

even at this level i'll share with you

two other numbers

1.5 and 2 degrees celsius

scientists always talk about these two

numbers 1.5 and 2.

people always tell me what's the big

deal what's the difference

and i say actually there's a world of

difference

scientists say that in the 1.5 degrees

celsius world

70 to 90 percent of our coral reefs will

vanish

and in a two degree celsius bowl 99

and another case in point in the 1.5

degrees celsius bowl

we talked about reproduction decreasing

by seven percent

and in the two degrees celsius well that

will increase to

16 reduction in wheat production in the

tropics

scientists are also saying that in a two

degree celsius world

there will be more heat waves and

extreme weather events as well

so scientists are saying please try to

keep it

at 1.5 degrees celsius

now that we understand why it is

important

to cap that increase to 1.5 degrees

celsius

people often ask me so how much of this

carbon dioxide is there in the

atmosphere

how much of it and i said to understand

this let me show you this picture

so this picture here is a orange ball

but it's a very special orange ball it's

actually a very big orange ball

probably larger than this or taller than

the stage

it's two stories high and it represents

one ton

of co2 people ask me

so how much of these orange balls if it

represents one ton of co2

are there in the atmosphere i'll give

you another number

51 gigatons which actually translates to

51 billion of these balls in the

atmosphere

being emitted every year scientists say

if you want to keep within a 1.5 degree

scenario you can

but you need to half those emissions by

a time frame

20 30 which is eight to nine years time

and then

you need to get it to zero by twenty

fifty

you might think so is this very tough or

what

well based on the study by pwc

of the g20 countries which is the

largest countries in

the world you need to decarbonize by

11.7 percent a year

to get to that 1.5 degree scenario

so you say actually quite doable maybe

we can get there

but i'll give you a reference point

last year 2020 was the year

where covet was raging

lots of business stopped we had the

circuit breaker

we had lockdowns activities decreased

planes or airports shut down hazard a

guess

about the decrease of carbon emissions

during the year of 2020 has it a guess

close not close sorry it was

unfortunately only seven percent

some sources even say six percent

when i saw this number i said to myself

oh my goodness despite

all this reduction in terms of

activities

we only decrease our carbon emissions

around the world

by to six to seven percent

how are we going to decarbonize the

whole world henceforth

but you know something there are three

areas that actually give me hope

let me share with you the first area

is technology and innovation my first

ball of hope

including innovation in sustainable

finance

and there's a really great innovation

that's happening

with renewable energy and even in

geoengineering

like carbon capture

the next area of hope i think is

nature-based solutions

using inland forests and mangroves to

sequester

the carbon dioxide in the atmosphere and

last but not least

the third one which i think is us

the community businesses governments

individuals setting ambitious targets

coming together to confront and to fight

climate change you know

during 2020 i thought there was

a lot of issues in the world kovit was

raging

and i thought you know i think climate

change would be in the back burner

but i was very surprised in 2020

the number of companies and also the

number of countries

that actually committed to net zero had

doubled

from 2019. you had

japan new zealand south korea

china all saying that it would be carbon

neutral

and then just this year you have the u.s

that's it they will slash their carbon

emissions

by half by 2030.

i think this is good news we also talked

about investors

investors as well are very interested in

companies who are climate and esg

resilient

so the ambition is there i think there's

lots of work to do

so how is it that we can keep companies

organizations accountable

and decrease the carbon emissions

just now i talked about financial

information

actually the financial information world

is actually a very well

[Music]

taken and also a very clear path very

well traveled path

however in the esg area or the climate

area

the path is less well traveled

and also it's foggy let me explain why

well firstly there are quite a number of

sustainability

and climate related standards around

so people will use different different

organizations would use to some

standards

this actually makes it very difficult

for stakeholders and also

investors to cast and compare it can be

confusing

the next area is about carbon

footprinting or carbon measurement

well to be honest i don't think all

companies actually know what's their

carbon footprint

and even if they're measuring the carbon

footprint

they're not measuring it completely

there are no complete boundaries there's

also no complete measurement of their

scopes

as well so how do you actually then

baseline your carbon emissions

set meaningful targets to actually

decarbonize

you can't do it it just surprises me

that in an area where trust and

accountability is most needed

in the climate and esg area that

there's not much of it

so when people ask me

you len who do you think can help in

this

what do you think we can do and i say

actually i think accountants can help in

this i think

accountants are able to fight climate

change they can save the world

and then people say you learn you're mad

i say yeah i think accountants can be

mad

i think accountants can be mad for

climate change and let me tell you why

firstly measurement and disclosure

accountants have been doing this for

hundreds of years

they have been great at measurement and

accounting

and also disclosures this is going to be

a very natural adjacency

for accountants actually if you look at

the greenhouse gas protocol

it does have quite a number of

accounting principles hidden within as

well

the next area is adding credibility

accountants like auditors have been

verifying

financial and non-financial information

for the longest time too

say for example you wanted to buy some

high quality carbon offsets a quantity

of it

wouldn't you want to know that the

amount that you bought is indeed

high quality carbon offsets accountants

can play a part

in that too and last

but not least is driving change and

accountants already doing so

in the world of global governance the

international financial reporting

standards

or ifrs the trustees have come out to

say

that they will make a start in making

a combine or harmonize reporting

standards of sustainability

so you see accountants can play a part

they can drive change and on an everyday

basis

i'm also seeing accountants putting up

their hand

young accountants putting up their hand

and say i want to join this fight

i want to join this fight against

climate change and i will use my skills

and experience

to fight this so i guess

to answer that question there's some

ways

the accountants can help to fight

climate change

you know i think our world can be very

different in the future

in the future we might not hear the

roaring sounds

of internal combustion engines but

we will hear the humming sounds of

electric vehicles

in the future we won't see forest fires

red skies but we'll see clear blue skies

with air that we can breathe in the

future

our energy sources won't be reliant on

fossil fuels

those things need to be kept in the

ground where they belong

instead our energy sources will come

from the sun it will come from the wind

and it will come from gushing waters

in the future everybody will have a

right

to a good education from the start

so that they can realize their dreams

so isn't this a future worth fighting

for

isn't this a future worth fighting for

in every role that we undertake

whether or not we are an educator

whether or not we are a young person

whether or not we are mother a ceo

a chief sustainability officer a banker

whether or not we are a accountant

thank you very much