Climate risks on the globe such as

Climate change and global warming pose major risks on the globe such as glacier shrinking, ice on lakes and river melting down earlier, more intense heat waves and so on.  Intergovernmental Panel on Climate Change (IPCC), which incorporates more than 1,300 researchers from the United States and different nations, predicts a temperature increase of 2.5 to 10 degrees Fahrenheit throughout the following century. Thus, right steps from all nations must be taken to save the world for the future generations. There are various issues of accounting for the climate change and global warming from the side of organization and nation. Some of the issues that business organization and specially the finance and accounting team face are described here.

First, the finance/account team don’t have adequate time to get engaged with environmental change activities. It is difficult for the same staffs to look after both business’s financial reporting and outside climate change connection in terms of monetary factors. It may not have spare resources such as employees who can work as a bridge between the climate change initiatives and organization.

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Second, there might be lack of special knowledge and skills to bolster basic leadership around environmental change. For instance, they may not know how carbon pricing may influence decision making at the upper level. The businesses do not hire someone who has special learning about climate change and global warming.

Third, the climate change and global warming are long-term issues while the finance and account department of an organization looks for the short-term. They are focused on meeting short-term organizational and financial goals and plans are made to meet the short-term targets because they get the budgets for the same term.

Moreover, finance team might find their role unfit for the environmental changes. Finance team and department do not set a budget for the environmental protection. Their intention and orientation are not directed toward the climate change. Organizations are driven by cost and they try to reduce the cost as much as possible. Creating a plan and putting into work about climate change is an addition to the cost and staffs. Thus, they are reluctant to work for climate change.

It is difficult to quantify the exact effect the specific organization is making in environmental changes. It is more difficult to convert the effect in monetary value. There is lack of uniform major of this measurement and conversion which creates trouble for an organization to decide and prepare for the how much they are going to spend for climate change. This ultimately leads to a budget deficiency for an organization as they could not quantify the effect while preparing the budget.

To summarize, there are many internal and external (Anon., n.d.) issues of accounting for climate change and global warming. As the environmental changes is rapid and majors to account and reduce the global warming are necessary for making the earth livable for generations to come. There should be made common consensus from governing bodies of all nations to keep the planet safe.

References

·         Chartered Institute of Management Accountants 2010, Accounting for climate change, viewed 22 January 2018. https://www.cimaglobal.com/Documents/Thought_leadership_docs/cid_accounting_for_climate_change_feb10.pdf

·         The National Aeronautics and Space Administration (NASA) 2018, The consequences of climate change, viewed 22 January 2018. https://climate.nasa.gov/effects/