Editorial

Readers will recall that last month’s edition included an article by Professor Russell Picot outlining the escalating impact of sustainability as an issue facing companies and the importance of corporate reporting on it. The 2019 Global Climate-Change talks are currently being held in Madrid. Hosting the talks, the UN’s Secretary-General, Antonio Guterres, has already revealed ¹ that the latest report from the World Meteorological Organisation states that “the last five years have been the hottest ever recorded” and that sea levels are at the “highest in human history”. These two factors are key benchmarks that indicate that “the point of no return is no longer over the horizon. It is in sight and is hurtling towards us”. Mr Guterres said efforts towards limiting the global temperature rise have so far been “utterly inadequate,” but nevertheless he believes it is still possible. He explained that the technologies necessary to achieving it are in place, and public opinion is “waking up” but cautioned that politicians lack the will “to put a price on carbon.” His hope rests in part on Mark Carney, who is about to step down as Governor of the Bank of England, and who will become the UN’s special envoy on climate action and finance, replacing Michael Bloomberg. Mr Carney will be seeking to “galvanise climate action” by financial institutions before the 2020 global climate talks. Mr Guterres described Mr Carney as “a remarkable pioneer in pushing the financial sector to act on climate”, and said he would be “shifting markets and mobilizing private finance” by building “frameworks for financial reporting, risk management and returns in order to bring the impacts of climate change to the mainstream of private financial decision making and to support the transition to a net zero carbon economy.” This sets the global context for one of this month’s articles that focuses on the relevance of IFRS to reporting on climate-change risks. It is also an important theme for Mr Jean-Paul Gauzès, President of EFRAG, who recently gave an interview for WAR in which he reflected on some of the challenges for corporate reporting, both financial and non-financial, in Europe, and the way in which he has forged his role since his appointment over three years ago. It will be interesting to see how future EU initiatives will dovetail with the changes that Mr Carney will be seeking to achieve, and the role that different organisations, including EFRAG, will play.