Calling for Better Accounting Procedures and Standards to Improve Corporate Carbon Emissions Disclosure: Dr. Abu-Ghazaleh Addresses the International Federation of Accountants to Confront Global Sustainability Challenges
AMMAN – HE Dr. Talal Abu-Ghazaleh, founder and chairman of Talal Abu-Ghazaleh Global (TAG.Global), has addressed the International Federation of Accountants (IFAC), in an open letter calling for working together to face climate change challenges and stressing the need for the accounting profession to play its role in confronting sustainability challenges.
In his letter, Dr. Abu-Ghazaleh indicated that the world is experiencing unprecedented climate changes, the repercussions of which can be seen on the ground, especially with the increased number of natural disasters across the globe and the other countless manifestations, including hurricanes, floods, severe drought, rising sea levels and melting polar ice caps. The resulting impact could be estimated in billions of dollars. He noted that this only is the terrifying start of an existential crisis that we cannot ignore.
He further pointed to the UN Secretary-General António Guterres’s warnings that the world is facing a "climate catastrophe" and “we are digging our own graves”. He referred to the most recent report issued by the United Nations in April 2022 stating that “the time is now or never to seriously limit carbon emissions that are polluting our atmosphere, as we are heading to a world that will become uninhabitable.”
In the same context, Dr. Abu-Ghazaleh stated that the accounting profession plays a key role in protecting the public interest and in implementing environmental accounting to inform investors and stakeholders about climate risks and opportunities. He further pointed that the issue of environmental accountability can be achieved by proper accounting practices that allow better monitoring and control, as such impacts can’t be managed unless measured.
He therefore stressed the need for improving the accounting procedures to increase corporate disclosure which is essential for the effective management of carbon emissions, as the polluters manage to escape accountablity for their actions that negatively affect the climate. He also indicated that businessmen and investors have become particularly interested in this issue due to the potential impacts of environmental repercussions on corporate financial health which includes several elements such as costs related to environmental damage, cleaning operations, property, waste disposal, fines, penalties, and other environmental responsibilities.
Dr. Abu-Ghazaleh had previously dealt with issues related to environmental accounting as early as 1999 when he led the production of a detailed report with international experts called “Accounting and Financial Reporting for Environmental Costs and Liabilities”. This was done under the supervision of the International Arab Society of Certified Accounting (IASCA) which he had been chairing since 1984, in cooperation with the United Nations and the International Standards of Accounting and Reporting (UNISAR) which he also chaired, under the instructions of the then UN Secretary-General, Mr. Kofi Annan.
Dr. Abu-Ghazaleh praised the efforts of Michael R. Bloomberg Task Force on Climate-related Financial Disclosures (TCFD) within the framework of the Financial Stability Board (FSB) of the Bank for International Settlements (BIS). He noted that this is considered an important step to focus the attention of the global accounting profession on climate change, as the accounting profession includes the greatest minds which play a vital role in highlighting climate challenges and proposing innovative solutions that would assist the business world to reduce carbon emissions.
In the open letter, Dr. Abu-Ghazaleh called on all IFAC members to join him in this endeavor based on uniting the entire accounting world under a common umbrella to combat one of the greatest challenges the world is experiencing in a professional, wise and determined manner, expressing his readiness to engage in joint action with IFAC in this vital challenge. This call comes as Dr. Abu-Ghazaleh has previously participated in drafting a number of international professional standards as a member of the IFAC Board in 1992.
Dr. Abu-Ghazaleh also stated that such solidarity would increase the possibility of further development and adoption of accounting standards, as well as supporting efforts to combat climate change and help create a sustainable world.
He also referred to the 21st World Congress of Accountants to be convened in Mumbai, India, November 18-21 2022, which will be held concurrently with the annual Council Meetings of the IFAC. He pointed out that this will be a shift toward a new era of implementation and action on climate and sustainable development, where he will propose a global declaration and urge its adoption by the UN General Assembly. He expressed his readiness to personally lead any follow up efforts.
Dr. Abu Ghazaleh noted that history would remember us in the future by actions we take today, calling for a legacy to be left that future generations will be proud of, by doing everything in our power to alleviate this crisis.
It is worth mentioning that Mr. Jamal Milhem, an International Arab Society of Certified Accountants - IASCA’s board member, and TAGI the Executive Director, will attend the activities of the 2022 World Congress of Accountants on behalf of Dr. Abu-Ghazaleh which is scheduled to be held in mid-November, in addition to representing His Excellency Dr. Abu-Ghazaleh and IASCA in the official IFAC Council Meetings.
The International Federation of Accountants (IFAC) is a worldwide organization for the accountancy profession. Founded in 1977, the organization is comprised of 185 members and associates in 130 countries. The World Congress of Accountants is the most important global event for the accounting profession, organized every four years in the presence of thousands of professionals, pioneers of the profession, and professional standards setters. It discusses all professional and global issues related to the accounting profession, in addition to its role in facing global challenges.
The International Arab Society of Certified Accountants (IASCA) is a non-profit professional accounting association that operates in all Middle Eastern countries with its regional office located in Amman, Jordan. It has been a member of the International Federation of Accountants since 1988 and seeks to raise professional competence in accounting in the Arab region. It plays an active role at the regional and international levels in all professional accounting issues.