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GREEN FINANCE

SKILLS: THE GUIDE

March 2023

About ACCA

ACCA (the Association of Chartered Certified Accountants) is the global

professional body for professional accountants.

We’re a thriving global community of 241,000 members and 542,000 future

members based in 178 countries and regions, who work across a wide range of

sectors and industries. We uphold the highest professional and ethical values.

We offer everyone everywhere the opportunity to experience a rewarding

career in accountancy, finance and management. Our qualifications and learning

opportunities develop strategic business leaders, forward-thinking professionals

with the financial, business and digital expertise essential for the creation of

sustainable organisations and flourishing societies.

Since 1904, being a force for public good has been embedded in our purpose.

In December 2020, we made commitments to the UN Sustainable Development

Goals which we are measuring and will report on in our annual integrated report.

We believe that accountancy is a cornerstone profession of society and is vital in

helping economies, organisations and individuals to grow and prosper. It does

this by creating robust trusted financial and business management, combating

corruption, ensuring organisations are managed ethically, driving sustainability,

and providing rewarding career opportunities.

And through our cutting-edge research, we lead the profession by answering

today’s questions and preparing for the future. We’re a not-for-profit organisation.

Find out more at accaglobal.com

GREEN FINANCE

SKILLS: THE GUIDE

If our planet is to avoid climate catastrophe, the world has

to change. As a profession we need to be one of the groups

driving that change by helping organisations adapt to build

a more sustainable future. Sustainability is not a nice-to-have

for enterprises and businesses, it is quite simply a must-have.

Green financing can supply organisations with the funding

needed to make the net-zero transition, but tapping that

financing requires finance professionals with the appropriate

skills, expertise and know-how. To help finance and investment

professionals play this critical role, ACCA has taken practical

steps to upskill its members. Its latest initiatives include jointly

launching a Climate Finance course with CFA Institute.

This report gives voice to the views and perspectives of members

and stakeholders in the ACCA community who have given their time

to explore their ideas in green finance and the net-zero transition.

It is a research report, whose findings on what accountants around

the world think of climate finance are fully outlined in Appendix B.

Author

Emmeline Skelton,

Head of Sustainability, ACCA

/44

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GREENFINANCESKILLS:THEGUIDE©2023AssociationofCharteredCertifiedAccountantsMarch2023AboutACCAACCA(theAssociationofCharteredCertifiedAccountants)istheglobalprofessionalbodyforprofessionalaccountants.We’reathrivingglobalcommunityof241,000membersand542,000futuremembersbasedin178countriesandregions,whoworkacrossawiderangeofsectorsandindustries.Weupholdthehighestprofessionalandethicalvalues.Weoffereveryoneeverywheretheopportunitytoexperiencearewardingcareerinaccountancy,financeandmanagement.Ourqualificationsandlearningopportunitiesdevelopstrategicbusinessleaders,forward-thinkingprofessionalswiththefinancial,businessanddigitalexpertiseessentialforthecreationofsustainableorganisationsandflourishingsocieties.Since1904,beingaforceforpublicgoodhasbeenembeddedinourpurpose.InDecember2020,wemadecommitmentstotheUNSustainableDevelopmentGoalswhichwearemeasuringandwillreportoninourannualintegratedreport.Webelievethataccountancyisacornerstoneprofessionofsocietyandisvitalinhelpingeconomies,organisationsandindividualstogrowandprosper.Itdoesthisbycreatingrobusttrustedfinancialandbusinessmanagement,combatingcorruption,ensuringorganisationsaremanagedethically,drivingsustainability,andprovidingrewardingcareeropportunities.Andthroughourcutting-edgeresearch,weleadtheprofessionbyansweringtoday’squestionsandpreparingforthefuture.We’reanot-for-profitorganisation.Findoutmoreataccaglobal.comGREENFINANCESKILLS:THEGUIDEIfourplanetistoavoidclimatecatastrophe,theworldhastochange.Asaprofessionweneedtobeoneofthegroupsdrivingthatchangebyhelpingorganisationsadapttobuildamoresustainablefuture.Sustainabilityisnotanice-to-haveforenterprisesandbusinesses,itisquitesimplyamust-have.Greenfinancingcansupplyorganisationswiththefundingneededtomakethenet-zerotransition,buttappingthatfinancingrequiresfinanceprofessionalswiththeappropriateskills,expertiseandknow-how.Tohelpfinanceandinvestmentprofessionalsplaythiscriticalrole,ACCAhastakenpracticalstepstoupskillitsmembers.ItslatestinitiativesincludejointlylaunchingaClimateFinancecoursewithCFAInstitute.ThisreportgivesvoicetotheviewsandperspectivesofmembersandstakeholdersintheACCAcommunitywhohavegiventheirtimetoexploretheirideasingreenfinanceandthenet-zerotransition.Itisaresearchreport,whosefindingsonwhataccountantsaroundtheworldthinkofclimatefinancearefullyoutlinedinAppendixB.AuthorEmmelineSkelton,HeadofSustainability,ACCAForeword‘Changeordie’hasaveryliteralapplicationwhenitcomestosustainability.Unlesstheworldaddressestheclimatechangechallengesuccessfully,theremaysimplybenohabitableworldleft.Amonumentalmigrationtosustainableeconomiesandbusinessesisrequired,andthatissomethingthatweasaprofessionwanttobe–andcanbe–oneofthegroupsdriving.Theaccountancyandfinanceprofessioncanmakeatellingcontributiontothesustainabilityeffortbybecomingexpertsingreenfinance.It’saperfectmatch–finance,afterall,istheheartofafinanceprofessional’srole.YetmanyACCAmemberssaytheylackthenecessarytechnicalskillstosteerthegreenfinancingactivityneededfororganisationstobuildthesustainablefuturethatrepresentsthebestchanceofanyfuture.It’sanobstaclethathastobeovercome,asACCA’s2021reportClimateActionandtheAccountancyProfessionhighlighted.Tomeetthechallengeproperly,theprofessionneedsupskilling.Thereisasignificantopportunityheretomakefinanceexpertsintegraltothesustainabilitydrive.Asthedemandforsustainableinvestinggrows,financeprofessionalsmustbeabletoserviceitbydevelopingadeeperunderstandingofhowsustainabilityissuesaffectfinance,theirclientsandtheworldatlarge.Thisreporthighlightswhy,ingreenfinancing,subjectknowledgeisnotjustpowerbuttheunderpinningofasustainablefutureforbusinessesofeverytype.JohnLelliottOBEFCCANon-executiveDirectoroftheEnvironmentAgencyandACCASustainabilityGlobalForumChair4ContentsExecutivesummary61.Thetimetoactisnow102.Accesstogreenfinance163.Greenfinanceskills204.Sustainablebusinessmodels,valuechainsandsustainableeconomy26Conclusion:Keytakeawaysandacalltoaction29AppendixA:Glossary31AppendixB:GlobalEconomicConditionsSurveyonClimateFinance34References415Sustainabilitycreateslong-termvalue‘Mayyouliveinexcitingtimes’runstheancientChinesecurse.It’sanaptdescriptionofourvolatileeconomicandpoliticallandscape,whereaccesstocheapercapitalismorevitalthanevertoanorganisation’slong-termsurvival.Withlendersincreasinglyofferingattractive‘greenrates’toorganisationsabletomeetsustainabilityrequirements,greenfinanceisthatcheapcapitalthatcankeepbusinessesinbusiness.Ithelpsthempreparewellinadvancefortheemergingandsystemicrisksbroughtaboutbyclimatechange–afargreaterpotentialdangerthanthemostpowerfulandruthlessofbusinessrivals.Greenfinanceisanengineofcompetitiveadvantage.Byembeddingsustainabilityintoallactivities,youwilldrivevaluecreation.‘Simplyput,sustainabilityisabusinessapproachtocreatinglong-termvaluebytakingintoconsiderationhowagivenorganisationoperatesintheecological,socialandeconomicenvironments.Sustainabilityisbuiltontheassumptionthatdevelopingsuchstrategiesfosterscompanylongevity.Astheexpectationsoncorporateresponsibilityincrease,andastransparencybecomesmoreprevalent,companiesarerecognisingtheneedtoactonsustainability.’(InternationalInstituteforManagementDevelopment,May2022).Keytothisdefinitionisthelong-termnatureofsustainabilityattheintersectionofsocialequity,economicviabilityandenvironmentalprotection(FigureE1).ExecutivesummaryGREENFINANCESKILLS:THEGUIDEEXECUTIVESUMMARYResources,includingbothhumanandnaturalcapitals,needtobeconsideredinaneconomicallyviablemanner.Butratherthanthetraditionalfocuspurelyontheeconomicelements,professionalaccountantsmustnowconsidertheenvironmentalandsocialelementstoo.Theprofessionisentirelyathomediscussingeconomicviabilityandbeginningtogetcomfortablewithenvironmentalprotection,butthethirddimensionofsocialequityisjustascrucial.Thesocialagendaisafundamentalpartofthejusttransitionthatisrequiredfororganisationstobesustainable.ResearchfortheGlobalEconomicConditionsSurvey(GECS)inQ22022byACCAandIMA(InstituteofManagementAccountants)foundthatorganisationsaroundtheworldareattachingmoreimportancetoenvironmentalfactors,withtheirleadersanticipatingsignificantchangeinbusinesspracticestomeetnet-zerotargets.Understandably,theyneedmoresupportfromtheirfinanceprofessionalstoincreasetheiraccessto–andawarenessandknowledgeof–thegreenfinanceproducts(seeChapter2)thatwillunderpinthetransitiontonet-zero.Businessestoldourresearcherstheyareunderinformedonclimatefinanceopportunitiesandclimateriskmanagement.Lackingtheskillsandexpertiserequiredtodevelop,implementandmanageESG(environmental,socialandgovernance)strategiesrobustly,manyareupskillingexistingstafforrecruitingexternallyfromahighlycompetitivemarketwithasmallpoolofexperts.Ourprofession’sabilitytounderstandthegreenfinanceoptionsneededforthetransitiontonet-zeroiskeytoequippingorganisationswiththisexpertise.Havingtheskillstoconsidernon-financialaswellasfinancialbusinessdriverswillalsoleavetheprofessionwellplacedtoleadintrainingstaffanddevelopingthetalentneededforenablingtransformationandembeddingsustainability.FIGUREE1:Thetriplebottomline–sustainability’sthreedomainsSustainabilitySocialequityEnvironmentalprotectionEconomicviabilityTHEPROFESSIONISENTIRELYATHOMEDISCUSSINGECONOMICVIABILITYANDBEGINNINGTOGETCOMFORTABLEWITHENVIRONMENTALPROTECTION,BUTTHETHIRDDIMENSIONOFSOCIALEQUITYISJUSTASCRUCIAL.6GREENFINANCESKILLS:THEGUIDEEXECUTIVESUMMARYKnowledgeplusskillsTheACCAplatformiscrucialinsupportingfinanceprofessionalsintheirroleofhelpingorganisationstodevelopwell-structuredandderiskedsustainabledevelopmentinitiativesandportfoliosofgreenerassets.TheupskillingrequirementforaccountingandfinanceprofessionalsiscoveredfullyinChapter3.Inshort,theyneedtobeableto:nassessbusinesssustainabilityandESGrequirementsnanalyseimpactsndevelopstrategicactionplansnconsidertheevolvingglobalfinancialmarketslandscapensourceandmanagegreenfinanceproductsnunderstandandrespondtoemergingglobalsustainabilitydisclosurerequirementssuchasthosefromtheInternationalSustainabilityStandardsBoard(ISSB),theTaskForceonClimate-relatedFinancialDisclosures(TCFD)andtheTaskforceonNature-relatedFinancialDisclosures(TNFD).ThesustainabilityjourneyClimatechangeandthejourneytonet-zerowillhaveafinancialimpactonorganisations’position,performanceandfutureoutlook.Thesustainabilityjourney(FigureE2)thatorganisationsneedtoembarkoninvolvesdefiningnet-zerostrategiesandsettingtime-boundtargetsrelevanttothevaluechain.Sustainabilityisdrivenbyfactorsexternaltoorganisationssuchastheincreasinginterestofregulatorsandthedevelopmentofreportingstandards(suchastheproposedIFRSS1andS2)thatrequiredisclosuresaroundsustainability.Internally,organisationsneedtodefinehowtheirstrategyaddressesthesustainabilityagenda:whatarethegoalsanddesiredoutcomes?Thisstrategycanbetranslatedintomeasurableobjectivesthatformpartofinternalperformancemanagementprocesses.Theseactivitiesmaybenon-financial,butfinanceplaysastrong,ifnotintegral,roleinthem.Astheguardianofreporteddataacrossanorganisation,financeneedstobeinvolvedintheend-to-endprocessestocollectandanalysethedata.Withplanningnowrequiringintegrated,cross-functionalactivityratherthanafinance-onlyfocus,thesiloedfinancefunctionisobsolete.Chapter1ofthisreportexplainshowtoestablishpolicies,procedures,methodsandpracticestocollectESGdatainsightsrelevanttoassessingandreportingonstrategy.Chapter2setsouthowtoenhanceawarenessofgreenfinanceproducts.Chapter3coverstakingaleadroleindrivingthegreenfinanceagendaandthenet-zerojourney.AndChapter4explainshowtodevelopaclimatefinancestrategyandoperatingmodel,andasustainableinvestment/financingapproach.FIGUREE2:Thesustainabilityjourney1.EstablishESGstrategy3.5.7.9.2.4.6.8.SettargetsDefinetransitionfinancerequirementsEnableESGdatamanagementEstablishESGprotocolsandcontrolsDevelopanet-zerostrategyCreateatransitionplanAdoptgreenfinanceproductsDevelopasustainablefinanceframeworkTHESUSTAINABILITYJOURNEYTHATORGANISATIONSNEEDTOEMBARKONINVOLVESDEFININGNET-ZEROSTRATEGIESANDSETTINGTIME-BOUNDTARGETSRELEVANTTOTHEVALUECHAIN.7GREENFINANCESKILLS:THEGUIDEEXECUTIVESUMMARYAmongourGECSQ22022respondents,25%thinktheywillhavetoextendtheirtimelinetoreachnet-zero,while51%thinkcostinflationwillforcethemtochangetheirstrategyforreachingnet-zero(FigureE3).Thegreentransitiondemandslong-termfinancing.Greenbonds,carbonpricingandsustainability-linkedloanswillallplayanimportantroleifwearetoreachnet-zeroby2050.Yet59%oftheGECSrespondentssaidtheyarenotconsideringusinggreenfinanceproducts:thisisanopportunitythatneedstobeaddressed.Greenfinanceandnet-zeroambitionsTheprecisecostsofclimatechangeandthenet-zerojourney–nottomentionhowthosecostswillbeallocatedbetweenandwithincountries–arehighlyuncertain,butitisonlytooclearthatalleconomiesandorganisationswillfeelaheftyimpactoverthecomingdecades.Whilethevalueandimportanceofnet-zerotargetsarewidelyunderstood,organisationsarestillfirefightingcurrentoperationalchallenges.FIGUREE3:Haveorganisationalstrategiesforachievingnet-zerogoalschangedinlightofthefollowingevents?Source:ACCAandIMAGECS(2023)UKRAINIANCONFLICTCOSTINFLATIONABNORMALLYHIGHSUMMERTEMPERATURESGlobalEconomicConditionsSurvey(GECS)ACCAandIMAregularlyasksmall,medium-sizedandlargebusinessesaroundtheworldtoconsiderthecostsandopportunitiesofthebusinesschangesneededforthemtoplaytheirpartindecarbonisingtheeconomy.InQ22022,asetofgreenfinancequestionswasputtoourGECSparticipants(AppendixB).Somekeyresultsareshownbelow.Net-zerotimeline25%ofrespondentsexpecttohavetoextendtheirtimelineforreachingnet-zero51%saidcostinflationwillmeantheywillnowneedtochangetheirstrategiesforreachingnet-zero.Accesstogreenfinance63%havestartedtheirgreenfinancejourney(22%arelikelytousegreenfinance,withafurther41%potentiallyusinggreenfinance)33%saidalackofinfrastructure,technologyandskillsisthemostimportantconcernaboutgreenfinancetoaddress.Net-zerotransition33%saidtheircountry’sheavydependenceonfossilfuelsandtheextractionsectoristheirmostimportantgreenfinanceconcern46%saidenvironmentalopportunitieswerethemostimportantconsiderationsfortheirregion(egcarbonemissionsreduction,circulareconomyinnovation,energyandwaterefficiency,sustainablematerials)41%saidasignificantchangeinbusinesspracticesisneededacrosstheirorganisationorregiontoachievenet-zero38%sawthenet-zerotransitionasanopportunitytocreatetangiblesocialimpacts(eggreenjobscreation,trainingandskillsdevelopment,employeeretention,productqualityimprovement,enhancedcustomerengagement,andmeaningfuldiversity,equalityandinclusion).YesNoUnsure28%57%15%51%35%14%19%65%16%8GREENFINANCEISANENGINEOFCOMPETITIVEADVANTAGE.BYEMBEDDINGSUSTAINABILITYINTOALLACTIVITIES,YOUWILLDRIVEVALUECREATION.GREENFINANCESKILLS:THEGUIDEEXECUTIVESUMMARYCALLTOACTION:Howprofessionalaccountantscandriveorganisationstonet-zero1.Helpdefinetheorganisation’snet-zerostrategiesandtargets.2.DevelopESGstrategiesandsustainablebusinessmodelsbuiltongreenfinancingandinvestment.3.Helptoidentifyandadviseonthecosts,benefits,challengesandopportunitiesofyourorganisation’snet-zerotransition.4.EnhanceyourunderstandingofgreenfinanceproductsandhowtheycanbeusedfortangibleESGandeconomicimpacts.5.SetpoliciesandproceduresforenhancedESGdatainsightsandsustainabilityaccounting/disclosures.9thepowerfulfinancialreportingframeworkofagreedstandards,third-partyauditingandregulator-policedcompliance.Financiers,investorsandpolicymakerswillplayakeyroleinscalingupclimatetransitionfinancetounderpinamassshiftbyorganisationstosustainableactivities,greenerassetsandeconomies.Long-termscience-basedtargetsdevelopedbytheScienceBasedTargetinitiative(SBTi)indicatethatmostcompanieswillneedtoreducetheirgreenhousegasemissionsby90–95%toachievenet-zeronolaterthan2050(2040forthepowersector).SBTI’sNet-ZeroStandardprovidescorporateswithguidanceforslashingtheiremissionsoverthenextfiveto10years.Achievingnet-zeroemissionswillrequire:nsignificantGHGreductionsinlinewithscience-baseddecarbonisationtrajectoriesnpermanentremovalofresidualGHGemissionsthatitisunfeasibletoreduceoravoid.1.ThetimetoactisnowFinancingclimateadaptationandthetransitiontonet-zeroDrought,famine,speciesdie-off,andariseinsealevelsthatshrinksproductivelandanddenselypopulatedareas.It’sascience-groundedvisionofanapocalypticfuturethatmanyofusarelikelytolivetoexperienceunlesstheworldcancheckglobalwarmingtonomorethan1.5Cofpre-industriallevels(Figures1.1and1.2)andreachnet-zeroby2050.TheIntergovernmentalPanelonClimateChange’sSpecialReportonGlobalWarmingof1.5C(2018)madetheseriousnessofthesituationclear,andundertheParisAgreement,countrieshavelegallyboundthemselvestoreducethegreenhousegas(GHG)emissionsthataredrivingglobalwarming.Greenfinanceisapotentialsuper-weaponinthebattlefornet-zero–whentheadditionofgreenhousegasestotheatmosphereisbalancedbytheirremoval.Itwillenablecarbon-intensiveindustriesandcompaniestoreducetheiremissionsandmeetnet-zerotargets,andfitswithinGREENFINANCESKILLS:THEGUIDE1.THETIMETOACTISNOWFIGURE1.1:Globalaveragesurfacetemperatureshavebeenrisingstronglysincethe1970sSource:USNationalOceanicandAtmosphericAdministration(2022)10GREENFINANCESKILLS:THEGUIDE1.THETIMETOACTISNOWFIGURE1.2:Long-termtrendofanthropogenicCO2emissionssourcesWhilethecomplexnatureofclimatechangemakesexactoutcomes,timehorizonsandfuturepathwaysuncertain,thereisahighdegreeofcertaintythatphysicalandtransitionriskswillmaterialise.AccordingtoanIPCC2022report:nbetweenaround3.3and3.6billionpeopleliveinareashighlyvulnerabletoclimatechange,withunsustainableuseofnaturalresources,inequityandmarginalisationnglobally,lessthan15%ofland,21%offreshwaterand8%oftheoceanareprotectedareas,leavingahighproportionofspeciesvulnerabletoclimatechangentheincreasedfrequency,severityanddurationofextremeeventswillplacemanyterrestrial,freshwater,coastalandmarineecosystemsathighorveryhighriskofbiodiversityloss.Source:IPCCSixthAssessmentReport(2022a)OpportunitiesinthegreeneconomyMarkCarney,theUNspecialenvoyonclimateactionandfinance,explainsthenet-zerotransitionas‘thegreatestcommercialopportunityofourage’,onethatwillusherinnewglobalindustriesandsupplychains.It’sanopportunitythatoverhalftherespondentstoourGECSQ22022researchfailedtorecognise:54%DIDNOTIDENTIFYANYOPPORTUNITIESINENVIRONMENTALACTION,AND62%SAWNOPOTENTIALSOCIALBENEFITSFORTHEIRREGION.Source:ACCAandIMAGECS(2023)FIGURE1.3:Whichofthefollowingopportunitieswouldbeimportantforyourglobalregion?EnvironmentalSocialGovernanceEconomic0%10%20%30%40%50%OtherNoneoftheabove/notapplicable46%38%38%47%1%5%11GREENFINANCESKILLS:THEGUIDE1.THETIMETOACTISNOWOrganisationaltransformationEscalatingESGchallengesarenowuppermostinthemindsofinvestorsandmanyotherstakeholders,presentingorganisationswithabroadersustainabilitychallenge.Asgovernmentsrecognisetheneedtoaddresstheclimateemergency,soorganisationsmustrespondwiththeirownplanstoaddresscarbonneutrality,net-zeroorsimilardefinedtargets.Figure1.4illustratesthefactorswithwhichbusinessmustnowcontend.Forthefinanceteam,thechangesandchallengesarereflectedingreaterstressbeinglaidoninsightandforward-lookingconsiderationsratherthanonjustreportingpastevents.Changeisneedediffinanceprofessionalsaretoremainrelevanttotheirstakeholders.ACCAandIMAmembersrecognisethis:81%ofrespondentstoGECSin2022thinkorganisationsandregionswillneedtochangetheirbusinesspracticestomeetthenet-zerotarget(Figure1.5).GreenjobsandgenderinequalityNotonlyarewomenmorevulnerablethanmentoclimatechange,butthemuchvauntedgreenjobseconomy–theInternationalLabourOrganizationreckonson24millionnewrolesgloballyby2030–islikelytopassthemby.Sectorssuchasagriculturethataredisproportionatelyaffectedbyextremeweatherconditionshaveworkforcesmainlycomposedofwomen.AccordingtoUnitedNationsagencies,80%ofpeopledisplacedbyclimatechangearewomen(UNEnvironment2022),andwomenare14timesmorelikelythanmentodieduringenvironmentaldisasters(UNWomen2018).Meanwhile,thesectorsthatwillbenefitmostfromthetransitiontonet-zeroareutilities,constructionandmanufacturing–whichhaveoverwhelminglymaleworkforces.Ifcurrenttrendsinareassuchaseducationandemploymentcontinue,theclimatemitigationandadaptationstrategiesdesignedtodaycouldsetgenderequitybackby15to20years,accordingtoa2021BostonConsultingGroup(BCG)analysis.Ensuringwomenarenotleftbehindinthetransitiontonet-zeroispartofthesocialequitydomaininsustainability’striplebottomline(FigureE1).Governmentsandbusinessesneedtoworktogetherto:nembedagenderperspectiveinclimateinvestments–globalinvestmentineffortstoachievenet-zeroshouldtotalUS$100–150trillionby2050(BCG2021)nensureequityingreeneconomyjobs–byincreasingthenumberofwomeneducatedandtrainedinscience,technology,engineeringandmathematics(STEM)subjectsandsustainability-relatedfields,andbyincreasingfemalerepresentationinindustriesthatrequirereskillingforthegreentransition.Forfinancetoplayaneffectiveroleinorganisations’greentransition,itmustfirsthaveclarityaboutitsownpurpose.Valueisthemeasurementofanorganisation’spurpose:itrepresentsboththefinancialreturnacrossthesustainabilityagendaanditscontributiontosociety.Onlyoncethisisestablishedcanfinancedelivertheorganisationaltransformationitsstakeholdersdemand.Transformationitselfisamovefroman‘as-is’toa‘to-be’statethathasmanydimensionsacrossorganisations.SeeACCA’s2021reportTransformationaljourneys:financeandtheagileorganisationforfurtherdetails.ClimateandsustainabilityTalentInformationassetDigitalisedcustomersSupplychainsContinuoustransformationFIGURE1.4:FactorscontributingtoorarisingfromcontinuousbusinesschangeCHANGEISNEEDEDIFFINANCEPROFESSIONALSARETOREMAINRELEVANTTOTHEIRSTAKEHOLDERS.120%20%40%60%80%100%TOTALNorthAmericaMiddleEastAsiaPaciﬁcCentral&EasternEuropeSouthAsiaWesternEuropeAfricaCaribbean41%5%40%3%11%36%7%42%3.5%11.5%31.5%6%50%3%9.5%37%4%43.5%1%14.5%29%14%57%54%17%5%24%39%9.5%8.5%43%55.5%4%29.5%6%5%29%6%47%18%SignificantchangeSlightchangeNochangeatallDon’tknowNotapplicableGREENFINANCESKILLS:THEGUIDE1.THETIMETOACTISNOWESGframeworkBuildinglong-termvaluethroughsustainabilityisano-brainer.ThefirststepfororganisationsinthisprocessistodevelopaframeworkforincorporatingESGfactorsintotheiroperations(Figure1.6).ACCA’s2022reportPlanningandperformancemanagementparadigmshowsthatsustainabilityandnon-financialdisclosuresmustbeembeddedintheplanningandperformanceprocesses.Itaddresseshowbusinesspartneringskills,supportedbyrobustdataandefficienttechnology,canenablefinanceteamstotakeamoreholisticapproachtocross-organisationplanning.Source:ACCAandIMAGECS(2023)ESGinvestingESGinvestingisahighlyeffectivetoolforaddressingclimatechangebecauseitallowscompaniestoreducethecostofcapitalandtoattractinvestors.OrganisationsneedaccountancyandfinanceprofessionalswhocangiveinvestorsESGclaritybydevelopingandbuildingaframeworkforESGbondissuances,andcanguidethebusinessinaccessingfundsforgreentransitioning.FIGURE1.6:CreatinganESGframeworkDene•Understandsustainabilityinthecontextofcreatinglong-termvaluefortheorganisation•Validatewithstakeholders•PrioritiseESGsthathaveamaterialimpactontheorganisation.Develop•Createatransitionplan–egifclimateisamaterialrisk,setanet-zerotargetandatransitionplan•DevelopanESGframeworkwithtargetsandmetrics•Createanorganisationalplantodrivethisagenda,includinganassessmentofthedatarequirement.Communicate•CommunicateESGperformancetointernalandexternalstakeholders•MakeESG-relateddisclosurestofulfillregulatoryrequirements•Communicateprogressagainsttransitionplan.FIGURE1.5:Howmuchdoyouthinkyourorganisation/regionwillhavetochangeitsbusinesspracticesinordertomeetthenet-zerotarget?13GREENFINANCESKILLS:THEGUIDE1.THETIMETOACTISNOWKEYSTEPSforaccountantsandfinanceprofessionalsIftheyaretoactaseffectivepartnersandstrategicadviserstotheirorganisations,accountantsandfinanceprofessionalsneedtobeableto:nascertainthelevelofESGmaturityacrosstheorganisation,anddefineandassessbusinessdriversandthefinancialandnon-financialrequirementsrelatedtosustainabilityndefinewell-structuredsustainablebusinessmodelsandmethodsandtheapproachtoembeddingsustainabilitybestpracticesacrosstheorganisationndesignandimplementrobustESGstrategiesandnet-zerostrategiesnsource,applyandmanagegreenfinanceproductsnanalyseandmonitorESGimpactsfromafinanceperspectivendevelopsustainabilitystrategicactionplansforfinancenprovidebusinessstrategicandfinancialinvestmentdecisionsbasedonin-depthanalysis,tocreateaportfolioofgreenerassetsnidentifyESGrisksandopportunities,andtheassociatedcostsandbenefitsngraspthefundamentalsofcarbonaccountingandpricingndefineanend-to-endESGdatamanagementapproachbasedonfinanceandbusinessneedsnreviewandreportonevolvingglobalfinancialmarketandeconomictrendsrelatingtosustainabilityandclimate,andstakeholderneedsnprovidefinance-relateddisclosuresonsustainabilitystandards(egTCFD),andengagewithemergingregulatoryrequirements(egISSBandTNFD).CALLTOACTIONforprivateandpublicsectororganisationsAdeepknowledgeandunderstandingofgreenfinanceproducts,evolvingmarkettrends,stakeholderrequirements,sustainabilitystandardsandemergingregulatoryrequirementsiskeytocreatingasustainablebusinessmodelandachievingstrategicgoalsandplanswhiletransitioningtonet-zero.1.DesignandimplementrobustESGstrategieswithclearlydefinedpurposesandgoals,andprogressmetrics.ESGshouldbealignedwithandembeddedinoverallbusinessstrategy.2.Developanet-zerostrategy.Setnear-termandlong-termscience-basedtargetstoachievenet-zeroemissions.Definethescopeofsectors,assets,portfoliosandactivitiestocover.Definethebaselineforcomparingperformancewithtargets,andagreekeyperformanceindicators(KPIs)andperformancemetrics.3.Createatransitionplan.Definethekeystepsandmilestonesonthejourneytonet-zeroemissions.Confirmtheapproachforassessing,reducinganddisclosingemissionsfromyourorganisation’sownoperations,itssupplychainandotherindirectsources.4.DefinethetransitionfinancerequirementsforsignificantGHGemissionsreductionsandthepermanentremovalofresidualemissions.5.Identifyandadoptgreenfinanceproducts.6.Adoptappropriatemethodsandtoolstocapturerelevant,accurateandcompleteESGdatainsourcesystemstosupportimpactassessment,monitoringandsustainabilityreporting.7.Developagreen/sustainablefinancetaxonomyandframeworkforregulatorydisclosures.Thetaxonomywillenabletheallocationofinvestmentcapitaltogreenerassetsandactivities,improveESGriskmanagementandavoidaccusationsofgreenwashing.Byoutliningcriteriaforlabellinggreenfinanceproductsandservices,andclassifyingsustainablefinancing/investments,theframeworkwillenablesustainabilityandclimatedisclosures.8.Establishcontrolstoprovideoversight,withclearlydefinedrolesandresponsibilities,throughstrongESGgovernancestructures(egboardcommittee,ESGsubcommittee),androbustriskmanagementtoenableefficientandeffectiveoperations(egtheIIA’sThreeLinesofDefencemodel)andtheproductionofreliableandtrustedsustainabilitydisclosures.14GREENFINANCEISAPOTENTIALSUPER-WEAPONINTHEBATTLEFORNET-ZERO–WHENTHEADDITIONOFGREENHOUSEGASESTOTHEATMOSPHEREISBALANCEDBYTHEIRREMOVAL.GREENFINANCESKILLS:THEGUIDE1.THETIMETOACTISNOW15GREENFINANCESKILLS:THEGUIDE2.ACCESSTOGREENFINANCEnundertakesustainabledevelopmentinitiatives(egnewinfrastructure,innovativetechnologicalmethods)thatsupportthedecommissioningof‘brown’assetsandcreationofresponsiblesupplychainsnachieveagreedclimate-relatedoutcomesfromproductswithattractivefinancingtermsthatwilldelivertherequiredreturnoninvestment.Theneedfororganisationstotapthoseskillsisclear.GECSresearchwithACCAandIMAparticipantsin2022foundthat63%reporttheyhavestartedthegreenfinancejourney(22%saidtheyarelikelytousegreenfinanceand41%thattheymayuseit)(Figure2.1).Totransitiontonet-zero,organisationswillneedtheirfinanceteamtohavemoreawarenessandknowledgeofgreenfinanceproducts.GreenbondsGreenbondsarethegreenfinanceproductfamiliartomostfinanceprofessionals–68%haveawarenessorknowledgeofthem(Figure2.2).InIndia,oneorganisationthathasusedgreenbondstofinancecleanerenergywithnotablesuccessisReNewPower.Itisthecountry’slargestindependentproducerofrenewableenergy,withoversevengigawattsofcommissionedandplannedwindandsolarpowergenerationfacilitiesin2019.AfterlistingontheNasdaqStockExchangeinMarch2021,ReNewannouncedplanstodevelopapipelineof18–19GWofrenewableenergycapacityby2025.TofinanceitsGreenfinanceproductsEssentialasthegreentransitionis,itwon’tcomecheap.Aproliferatingrangeofgreenfinanceproducts(egcarboncredits,greeninvestmentfunds,greenbonds,greenmortgages,socialbondsandsustainability-linkedloans)andblendedfinanceoptions(egloanguarantees/insurance)canprovidetherequiredtransitionfunding.(SeeAppendixAforafulllistofgreenproductsinACCA’sglossaryofsustainableterms.)Butthatfundingislikelytogobeggingunlessthereareprofessionalswithgreenfinanceskillstohelporganisations:ngetstartedonthesustainablejourney,byputtingthedata,systemsandstrategiesinplacetocreatethegreencredentialsrequiredforaccessinggreenfinance2.AccesstogreenfinanceSource:ACCAandIMAGECS(2023)FIGURE2.2:AwarenessofgreenbondsamongfinancialprofessionalsSource:ACCAandIMAGECS(2023)0%20%40%60%80%100%TOTALNorthAmericaMiddleEastAsiaPaciﬁcCentral&EasternEuropeSouthAsiaWesternEuropeAfricaCaribbean31.5%9%27%31.5%36%25.5%4.5%34%47.5%5%19%28.5%22%14.5%32.5%31%31%44%19%18%50%25%29%29%10%32%33%14%27%3%23%57%14%29%7%6%1%NotawareatallAwarebuthavenoknowledgeBasicknowledge/understandingonlyGoodlevelofknowledge/understandingI’manexpertnNo,greenﬁnanceisnotsuitableforourorganisation,17%nNo,wedonothavetheresourcestogainaccesstogreenﬁnance,14%nMaybe,41%nWearelikelytousegreenﬁnanceinthefuture,22%nWearealreadyusinggreenﬁnance,6%22%41%14%6%17%FIGURE2.1:Wouldyouusegreenfinanceinyourorganisation?16GREENFINANCESKILLS:THEGUIDE2.ACCESSTOGREENFINANCEInMarch2022,Chileplacedtheworld’sfirst-eversovereignsustainability-linkedbond(BouzidiandMills2022).TheUS$2bn20-yearbondwasmorethanfourtimesoversubscribed–aremarkableachievementgiventhesovereignbondmarket’svolatilityanduncertainty.ThebondadherestotheParisAgreementonclimatechangeanditsperformancetargetsincludethecountryemittingnomorethan95metrictonsofCO2by2030andderiving60%ofitselectricityproductionfromrenewablesby2032.Similarinconcepttosustainability-linkedbonds,policyperformancebondsarefocusedonachievingcarbonemissionreductions.Originallyissuedbygovernmentsasameansoffulfillingtheirclimatechangepledges,theyare,intheirsimplestform,interestpaymentslinkedtotheactualGHGemissionsoftheissuingcountry.Aninvestorinapolicyperformancebondreceivesanexcessreturnifemissionsareabovethegovernment’spublishedtarget.plans,ithasissuedgreenbonds,includinginApril2021asuccessfulUS$585mseniorsecuredgreenbondat4.5%,whichfallsduein2028/9.InJanuary2022,itraisedafurtherUS$400mat4.5%byissuingseniorsecureddollarnoteswitha5.25-yeartermtorefinanceexistingdebtandfundcapitalexpenditure.ThedollarnotesaregreenbondscertifiedbytheClimateBondInitiativeandwillbelistedontheSingaporeStockExchange.Sustainability-linkedloansSustainability-linkedloansareasubsetofgreenbondsbutdifferinseveralcrucialways:nThefundsraisedaretiedtoacorporateornationalobjectiveratherthanaspecificproject,freeingtheissuertodeliversustainabilityimprovementsthroughawiderangeofmeans.nSustainability-linkedbondsareissuedwithperformancetargetscontainingKPIs.Ifthetargetsaremissed,thebondissubjecttoa‘step-up’clausethatraisesitsinterestrate.FIGURE2.3:Towhatextentareyouawareofsustainability-linkedloanstoreducethecostofcapital?Source:ACCAandIMAGECS(2023)0%20%40%60%80%100%TOTALNorthAmericaMiddleEastAsiaPaciﬁcCentral&EasternEuropeSouthAsiaWesternEuropeAfricaCaribbean34.5%26%9.5%30%29%45%22%32%23%41%17%11%43%29%21%29%36%26%52%15%7%41%27%10%22%32%15%20%32%69%19%12%4%4%14%1%NotawareatallAwarebuthavenoknowledgeBasicknowledge/understandingonlyGoodlevelofknowledge/understandingI’manexpert17GREENFINANCESKILLS:THEGUIDE2.ACCESSTOGREENFINANCEFIGURE2.4:NextstepsforSMEsManySMEswilllackthefinancialexpertisein-housetoundertakethesesteps,buttheirprofessionaladvisersinsmallandmediumaccountancypracticeswillbeabletooffertheexpertsupportneededtoguidethemsuccessfullythroughtheoptions.Thereisanopportunityhereforadviserstoupskillanddevelopnewsourcesofbusiness.Analysethefinancialpositionofthebusiness.Determinethefinancingneedsandtheirnature(egoptimisingsustainablebusinesspracticesbyinvestigatingthecostofnewenergy-efficientequipment),howurgenttheyareandthedevelopmentstageofthebusiness.Identifyandresearchthedifferentfinancingoptionsavailable(egbanks,equity,asset-basedfinance,alternativefinance).Speaktoyourbankorlender.SomehavedevelopedtoolstosupportSMEsonsustainabilityreportingandachievingnet-zero.Determinethemostappropriatefinancingoption.Findingtherightfundingsourceismoreimportantthanfindingagreenfinancesource.Clarifywhatinformationneedstobeprovidedandanalysedtogetaccesstotheselectedfinanceoption.Doyouhavereliablesourcesofthisdata?Create/updateyourbusinessplantoincludecapturingreliabledatatoprovideaccurate,timely,relevantandcomparablesustainabilityinformation.ForfurtherguidanceforSMEsonsustainabilitymappinganddefiningsustainabilitypriorities,seetheSMESustainabilityPlaybook(CAANZandACCA2022).GreenfinanceandSMEsGrowthcapitalisthegreatconstraintforsmallandmedium-sizedenterprises(SMEs)tryingtobecomemoresustainableastheyexpand.Areported27%ofEuropeanSMEssignalalackoffinancialresourcesasthemainreasonfornotbecomingmoresustainable–asignificantlyhigherfigurethanforlargebusinesses(OECD2021).ReportingonsustainabilitymaygiveSMEsaccesstootherwiseunavailablefinance,suchaspublicgrantsthatrequireaprocurementapplication.Andwithbanksadoptingsustainabilitycriteriaandissuinggreenloans,thedemonstrationofsustainablepracticesmaybecomecrucialtoobtainingbankfinancing–themostcommonsourceofexternalfinancingformanySMEs.Barriersforfinancialinstitutions,policymakersandregulatorstotacklenSMEshavedifferentfinancingneedsdependingontheirlifecycleanddevelopment(egstart-upvsgrowthphases).nAccesstofinanceisakeystrategicissueforSMEdevelopment(egcashflow,workingcapital).nStructuralbarrierstoSMEsaccessingfinanceincludelackofcollateral,insufficientfinancialskillsandpoorawarenessoffundingoptions.Certaingroups(egwomen-ledcompanies,minorityethnicbusinesses)facefurtherchallenges.nOnthesupplyside,thereareinformationasymmetriesbetweenfinancialinstitutionsandSMEs,andalimitedrangeofsustainablefinancingproductsadaptedtotheneedsofSMEs.The‘niche’natureofgreenmarketscanalsoresultinincompatibilitybetweeninvestors’andentrepreneurs’idealsandobjectives.nOnthedemandside,SMEsmaynotyetseeastrongbusinesscaseforgreening.Theyoftenlackawarenessandinvestor-readinessforgreenfinancialopportunitiesandmaynotbeabletomeetthereportingrequirementsthatfinancialinstitutionsrequireforgreenfinancing.Theyalsofacelonganduncertainpaybackperiodsfromgreeninvestments,alongwithdifficultiesinensuringuserdemandforgreenoutputs.18TOTRANSITIONTONET-ZERO,ORGANISATIONSWILLNEEDTHEIRFINANCETEAMTOHAVEMOREAWARENESSANDKNOWLEDGEOFGREENFINANCEPRODUCTS.GREENFINANCESKILLS:THEGUIDE2.ACCESSTOGREENFINANCE19GREENFINANCESKILLS:THEGUIDE3.GREENFINANCESKILLSaboutclimatefinanceopportunitiesandclimateriskmanagement,theyareunabletodevelop,implementandmanagetherobustESGstrategiesneededtoaccessgreenfinance.Organisationsneedtoupskillsotheycan:ngainbetterunderstandingoffinancialandnon-financialrequirements,transitionfinanceopportunitiesandcustomerneeds,andenableresponsiblevaluechainsnimprovetheirunderstandingofthesourcesandtypesofgreenfinanceproductsavailable,andtheirapplicabilitynmanageandservicegreenfinanceproductsnassessESGimpactsandenablemonitoringandsustainabilityreportingnperformcarbonaccountingandpricing.TheESGskillsgapissizeableforbothSMEsandlargecorporatesthatstillneedtoinvesttimeandeffortindevelopingtheirnet-zerotransitionplans(Figure3.1).Theyshouldstartbyfocusingonupskillingtheirteamsandbringinginnewskilledresources.Ifthebenefitsthenet-zerotransitioncanbringacrosstheeconomyaretobemaximised,thenthecurrentskillsetwithinthefinancesectorandbeyondneedstobesignificantlyenhanced.Greatercapabilitiesinprofessionalscepticismandjudgmentareneededtopreventdeliberateorinadvertentgreenwashing.Organisations’plansandprogrammeshavetosupportedbyindependentassurance,measurementverificationand/orcertification.Simplyallowingbusinessestoclaimthatstaffhavebeentrainedcanleadto‘competencywashing’,whichwillharmthecredibilityofotheraspectsoftransitionplans.Itisimportantthatknowledgeandskillsaredevelopedaswidelyaspossible.Itishardtoimaginedeliveryofanyelementleadingtoadecarbonisedeconomywithouttherequisiteknowledgeorskillsamongbusinesses,consumersandotheractors.ACCAbelievesthatprofessionaleducationandtrainingwillplayakeyroleinsuccessfultransitionplanninganddelivery.DevelopingtheskillsManyorganisationscurrentlylackafinancialpilotwhocansteeranet-zerocourseforthem.Poorlyinformed3.GreenfinanceskillsFIGURE3.1:Howfinanceprofessionalsratetheirknowledgeandskillsformanagingthefinancesideofachievingnet-zeroSource:ACCAandIMAGECS(2023)KNOWLEDGESKILLSETVerypoor9%Poor18%Good27%Verygood11%Neithergoodnorpoor29%Notapplicable6%VerypoorGoodNeithergoodnorpoorPoorVerygood10%18%26%32%9%Notapplicable5%20GREENFINANCESKILLS:THEGUIDE3.GREENFINANCESKILLSUnderstandingwhatisatstake.Accountingandfinanceprofessionalswillneedtounderstand:nthekeychangesinthenaturalenvironment(egbiodiversityloss)nthepotentialimpactsofthesechangesonhumansocieties(especiallythekeyeconomicsectorsaffected)nthepotentialforpolicy,markets,technology,innovationandsocialchangetorespondtothesefactorsntherelevanceofthesetrendsforbusinessstrategy.Leveragingcollaborationandcooperationtowardssharedgoals.Globalcross-sectoralchallengesrequireglobalsolutions,whichneedtobeadvancedacrossmultiplelevelsofgovernanceandeconomicorganisation.Addressingriskswhilecatalysingtransformationwithintheeconomyrequirescollaborationacrosstheentireinvestmentchain.Managinguncertainty.Disruptionwilldefinethecomingdecades,aswehaveseenwiththeCovid-19pandemicandtheUkrainewar.Financialinstitutionswillneedtoplanforcontingenciesandensuretheyhavetheflexibilitytoadaptwhileavoidingunintendedconsequencesthatmayhavenegativedistributionaleffects.GreenfinanceskillsacrossorganisationsOnly36.5%ofGECSparticipantssaidtheyhavetherightlevelofresourceintheirteamtohelpreachtheirorganisation’snet-zerogoals(Figure3.2).SkillsandcapabilitiesrequiredinthefinancialsectorThekeychallengesforthefinancialsectorwillbetakingambitiousactiontomeetsustainabilitycommitments,broadeningcapacitiesinemergingareas,monitoringandcommunicatingprogresstostakeholdersinarobustfashion,andmanaginganarrayofcomplexofficialsectorrequirements–allwhileenhancingcompetitivenessinnewbusinessareas.Theskillsandcapacitiesneededtoachievethiswillvaryforbothcorebusinessactivitiesandrolefunctions,butthefollowingthreethemeswillberelevantacrossthefinancialsectoratalllevels.FIGURE3.2:Doyouhavetherightlevelofresourcetohelpyourorganisationreachitsnet-zerogoals?Source:ACCAandIMAGECS(2023)ONLY37%OFGECSPARTICIPANTSSAIDTHEYHAVETHERIGHTLEVELOFRESOURCEINTHEIRTEAMTOHELPREACHTHEIRORGANISATION’SNET-ZEROGOALS.Notapplicable5%StronglydisagreeAgreeNeitheragreenordisagreeDisagreeStronglyagree8%6%21%23%37%21GREENFINANCESKILLS:THEGUIDE3.GREENFINANCESKILLSAccountancyandfinanceskillsandeducationTheglobalsustainablefinanceagendacontinuestodevelopinresponsetodynamicandinterlockingfactorsthatarereshapingtheskillsthatfinancialprofessionalsneed.1.Thereisevolvingscientificunderstandingoftheworld’strajectoryonclimatechangeandbiodiversityloss,andtheresultingrisks.•TheIPCCsixthassessmentreportin2022hasmadeitclearthatthewindowofopportunitytomakethesweepingchangesneededtostaveofftheworstimpactsofclimatechangehasnearlyshut.2.Thereisanincreaseinofficialsectorframeworksandinstrumentstoalignfinancewithsustainabilitypriorities.•Approximately700differentpolicyandregulatorymeasuresareinplaceinmorethan60countries,alongsideanevolvingarrayofinternationalstandardson:disclosureanddata;classificationframeworks;riskassessment/managementandscenarioanalysis;andprudentialtools.•Atleast27centralbanksorbankingsupervisorshavebeenconductingorhaveconcludedscenarioanalysisexercisesinthepasttwoyears.Differentapproachesmakeithardertocomparepotentialimpacts:supervisorshaveemployedatleastsixuniquemeasuresofcreditriskimpact.•Classificationframeworksarealsoproliferating,withtaxonomiescurrentlyunderdevelopmentin24jurisdictionsaroundtheworld.3.Thereisahugeaccelerationinmarketactivitytoraisetheambitionofbusinesses’climateandsustainabilitystrategies.•Progresstonet-zeroisabarometerforclimateambitionintheprivatesector.Morethan25net-zerocoalitionshavebeenlaunchedthroughtheGlasgowFinancialAllianceforNetZero(GFANZ),coveringsectorssuchasenergy,agriculture,industry,transportandbuildings.4.Marketdemand,consumerpreferencesandstakeholderexpectationsareevolvingrapidly.•US$580bnhasbeeninvestedinESGfundsandoverUS$1.4trillionofESGdebthasbeenissued;issuancecouldhitUS$3.8trillionby2025(IIF2022).Achievingnet-zerotargetsby2050mightrequiretotalclimatebondvaluetoreachUS$36trillionby2025andoverUS$60trillionby2030.•Therehavebeenmajorupswingsinengagementandexpectations,andashiftinsocietalsentimentaboutclimateactionandtheroleoffinance.22GREENFINANCESKILLS:THEGUIDE3.GREENFINANCESKILLSACCAandsustainabilityskillsSustainabilityisalreadyfirmlyintegratedwithintheACCAcorequalificationasoneofthesevencapabilitieswebelieveallprofessionalaccountantsneed.AllACCAstudentscovertopicssuchastheIntegratedReportingframework,socialandenvironmentalaudits,environmentalmanagementaccounting,themeasurementofenvironmentalandsocialperformance,andtheimpactofsustainabilityissuesonstrategyformulation,businessperformanceandfinancialdecisions.ACCAalsohelpsmemberscontinuetobuildtheirgreenfinanceskillswitharangeoflearningopportunities.OurCareerNavigatortool(careernavigator.accaglobal.com)forstudentsandmembersplacesgreatstressonsustainabilitycapabilities,andsustainabilityisoneofouressentialCPDpackages,assemblingallresourcesonthetopicinoneplaceintheCPDsectionofourwebsite(accaglobal.com/cpd).TwoofthoseresourcesaretheACCACertificateinSustainabilityforFinanceandtheACCA/CFAClimateFinancecourse.ACCAandCFAclimatefinancecourseThiscoursecountsasverifiablecontinuingprofessionaldevelopment(CPD)andrequiresaround10hoursofself-pacedstudy.nItprovidesanintroductiontoclimatechangeanditsrelatedeconomicandenvironmentalimpacts,aswellaspossiblesolutionstoclimate-relatedproblems.nItcoversclimatechange,carbonpricing,sustainablebusinessmodels,andclimateriskandopportunitiesinthecontextofbusiness,aswellasportfolioconstructionandinvestmentanalysis.nItpresentsthetopicfromtheperspectivesofbothissuersofsecuritiesandinvestorsinthem,makingitsuitablefordiverseaudiences.nItisapracticalandapplieddigitalcourseforbusiness,financeandaccountingprofessionalsthatisalsousefulforindividualsseekingpracticalguidanceonclimatechangeandrelatedfinancematters.ACCACertificateinSustainabilityforFinance(CertSF)TheCertSFconsistsoffivecourses,imparting16hoursofinteractive,experientiallearning.Itequipsparticipantswiththeskills,knowledgeandconfidencetoleadonsustainabilityissuesintheirorganisation.nCourse1developsacoreunderstandingofsustainabilityandwhatitmeansfortheplanet,peopleandyourorganisation.nCourse2explainshowtoreduceyourorganisation’simpactontheplanet,whilebuildingorganisationalresilience.nCourse3teacheshowtotaketheopportunitiesforvaluecreationofferedbytheUN’sSustainableDevelopmentGoals.nCourse4looksathowtomeasureandmanageperformancerelatedtoenvironmental,socialandgovernanceissues.nCourse5coverssustainabilityanalytics–ESGdatatypes,sources,toolsandtechniques.23GREENFINANCESKILLS:THEGUIDE3.GREENFINANCESKILLSIBFandMASskillsandcompetenciesTheInstituteofBankingandFinanceSingapore(IBF)andtheMonetaryAuthorityofSingapore(MAS)havesetout12technicalskillsandcompetenciesforrolesinsustainablefinance.IBFandMASareencouragingfinancialinstitutionstodesigntrainingprogrammesforthekeyskills,althoughmanysuchcoursescouldalsobeappliedacrossotherindustries.Theskillsareneededforfinancerolesinsales,distributionandrelationshipmanagement,productdevelopmentandmanagement,operations,riskcomplianceandlegal.Theyarealsoneededbysustainablefinanceprofessionals,suchaschiefsustainabilityofficers,staffworkinginsustainabilityreportingandinvestorrelations,advocacyandstewardship,andsustainabilityproductspecialists(seeStudentAccountant2020).The12skillsandcompetencies1–8applytoallsectors,9–12arespecifictofinancialservices.1.Carbonmarketsanddecarbonisationstrategiesmanagement.Leadtheorganisation’sstrategyandpoliciesinresponsetocarbonpolicy,marketdevelopmentsanddecarbonisationstrategies.Providesupportfortheorganisationandclientsintheireffortstodecarboniseandbecomenet-zeroemitters(IBFSingapore2022a).2.Climatechangemanagement.Synthesiseinformationonclimatechangeandclimatepolicydevelopmentstoshapetheorganisation’sstrategies,policies,productsand/orservices(IBFSingapore2022b).3.Naturalcapitalmanagement.Developmarketresearchonnaturalcapitalandleadtheorganisation’sstrategiesandpoliciesonnaturalcapitalandmarketdevelopmentresponse(IBFSingapore2022c).SeealsoACCA’sreportProfessionalAccountantsChangingBusinessforthePlanet:AGuidetoNaturalCapitalManagement(ACCA2020).4.Taxonomyapplication.Analyseandshapetheorganisation’sstrategy,policies,practicesandrelevantbusinessactivitiesinresponsetokeydomestic,regionalandglobaltaxonomiesthatclassifygreenandtransitioneconomicactivities(IBFSingapore2022d).5.Impactindicators,measurementandreporting.Analyse,monitorandreportimpactofsustainabilityactions,andleadtheorganisationinsettingimpactmissionandtargetsfortheorganisationorcustomers(IBFSingapore2022e).6.Sustainabilityreporting.Leaddevelopmentoftheorganisation’ssustainabilityreportingandaccountingpoliciesandprocessesinlinewithregulatoryrequirementsandinternationalbestpractices(IBFSingapore2022f).7.Sustainabilityriskmanagement.Developframeworks,strategiesandpoliciesformanagingsustainabilityrisksfortheorganisationtominimiseandmitigaterisks,andtheimpactofbothuponandbytheorganisation(IBFSingapore2022g).8.Sustainabilitystewardshipdevelopment.Leadthedevelopmentoftheorganisation’sstewardshipstrategy,focusareas,policiesandpractices,andimplementstewardshiptoachievetheorganisation’sinvestmentandsustainabilitygoals(IBFSingapore2022h).9.Non-financial-industrysustainabilitydevelopments.Synthesisesustainability-relatedrisks,opportunitiesandmarketdevelopmentsofthenon-financialindustries,andtheirimpactandapplicationtotheorganisationandthefinancialsector(IBFSingapore(2022i).10.Sustainableinsuranceandreinsurancesolutionsandapplications.Developnewand/orexistingsustainableinsuranceand/orreinsuranceservices,alignedwithinternationalbestpracticesandsupportingcustomersinimprovingtheirsustainabilityperformanceovertime(IBFSingapore2022j).11.Sustainableinvestmentmanagement.Leadtheorganisation’sstrategiesonsustainableinvestmentandimplementsustainableinvestmentconceptsandapproachesonportfoliomanagement(IBFSingapore2022k).12.Sustainablelendinginstrumentsstructuring.Structurekeysustainablelendinginstruments,whichincludebonds,loans,projectandtradefinancing,derivatives,blendedfinance,anddevelopingincentivemechanismstoencourageadoptionoftheseinstruments(IBFSingapore2022l).24THEESGSKILLSGAPISSIZEABLEFORBOTHSMESANDLARGECORPORATESTHATSTILLNEEDTOINVESTTIMEANDEFFORTINDEVELOPINGTHEIRNET-ZEROTRANSITIONPLANS.GREENFINANCESKILLS:THEGUIDE3.GREENFINANCESKILLS25GREENFINANCESKILLS:THEGUIDE4.SUSTAINABLEBUSINESSMODELS,VALUECHAINSANDSUSTAINABLEECONOMYFIGURE4.1:KeycomponentsofsustainabilitySustainablebusinessmodelexampleFigure4.1showsthelinkagebetweenthekeycomponentsofsustainability,andTable4.1setsoutarangeoffactorsonwhichthesecomponentsdepend.SustainabilityoverviewTable4.2outlinesdetailsofthesustainabilitycomponentsillustratedinFigure4.1.4.Sustainablebusinessmodels,valuechainsandsustainableeconomyAsustainablebusinessmodelprovidesthemechanismfororganisationstoachievetheirshort-,medium-andlong-termstrategicgoalsandplansinlinewiththeiragendaforsustainability,climatechangeandtransitiontonet-zero.Accountancyandfinanceprofessionalscanensurethebusinesscaseisstrong,sustainabilityandclimatecommitmentsarefulfilled,opportunitiesandvaluearerealised,ESGrisksmanaged,andbusinesspracticestransformedandimproved.SustainabilityEnvironmentimpactSocialimpactValuechainOpportunities&challengesEconomicvalueProcessandsystemsPeople26GREENFINANCESKILLS:THEGUIDE4.SUSTAINABLEBUSINESSMODELS,VALUECHAINSANDSUSTAINABLEECONOMYTABLE4.2:OverviewofkeysustainabilitycomponentsSUSTAINABILITYKEYCOMPONENTSOVERVIEWA.Environmentalimpact•Themodelshouldconsidertheimpactoftheorganisationontheenvironment,andthemeasuresrequiredtoenableenvironmental(includingclimate)adaptation,riskmitigationandbuildingresilience.Asustainablebusinessmodelshouldpromoteuseofrenewableresourcesthatreducecarbonemissionsandwaste,preventpollution,andprotectandrenewbiodiversity,natureandtheenvironment.•Accountantsandfinanceprofessionalscancontributetothedefinitionoftheorganisation’spriorityenvironmentalindicators,focusingontargets,metrics,KPIsandmeasurestoenablecontinuousperformanceassessmentandimpactmonitoring,toprovideclimateandnature-relatedfinancialdisclosures,andtorecommendimprovements.B.Socialimpact•Themodelshouldenableorganisationstofocusmorecloselyonsocialindicatorstocreatemeaningfulchangeacrossthebusinessandtheecosystemsitaffects.Forexample,itcouldprioritiseequality,diversityandinclusionoftheworkforceandsuppliers,encouragecommunityengagementanddevelopment,implementmeasuresforemployeewellbeing,healthandsafety,andadheretohumanrightsandlabourlaws.•Accountantsandfinanceprofessionalscansupportprioritisationofsocialindicatorsandreviewtheinvestmentneededtodrivechange;assessperformanceagainstKPIsandrelatedmeasures;ensureaddedvalueisderivedfortheorganisationandkeystakeholders;andstrengtheneffortstoalignwithandachievetheUNSustainableDevelopmentGoals.C.Opportunitiesandchallenges•Thebusinessmodelshouldprovideamechanismandapproachforidentifyingsustainability-relatedopportunitiesarisingfrommarkettrends,emergingtechnologyandavailableresourcesthatwillachieveESGgoals.Themodelshouldalsoincorporateanapproachtoidentifyingandmanagingchallengestheorganisationmayencounter.•Accountantsandfinanceprofessionalscanplayakeyroleinidentifyingandassessingbothopportunitiesandchallengesfortheorganisation–eginvestmentsincleantechnology,divestmentfrom‘brown’assetsandanendtoenvironmentallyharmfulactivities.D.Valuechain•Themodelshouldaimtodriveresponsibleandsustainablevaluechainsthatcanmaintainprofitabilityateverystageofthebusinessprocessandtransactionlifecycleandcreatesustainableeconomicvalue,whilehavinganeutralimpactontheenvironmentandyieldingpositivesocialbenefits.•Accountantsandfinanceprofessionalscansupportthedevelopmentofvalue-addingstrategiesfororganisations,andreviewthefinancialperformanceofbusinessactivitiesacrosstheend-to-endvaluechain.Theycanproviderecommendationsforcostoptimisationandrevenuegeneration,soastoachievebothprofitabilityandpositivesustainabilityoutcomes.TABLE4.1:OverviewofkeysustainabilityconsiderationsSUSTAINABILITYKEYCONSIDERATIONSOVERVIEWA.Sustainabilitystrategyalignment•Strategicgoalsandplansshouldclearlydefinetheorganisation’scommitmentsandpledgesonsustainability,climateandnet-zeroemissionsanditsplanstofulfilthem,andalsosetouttherelevantfactorstoconsider,suchasfinancialresources,businessoperations,customers,supplychainsandtheeconomy.•Accountantsandfinanceprofessionalscanhelpdefineachievable,realisticandtimelystrategicESGgoals,measuresandopportunities(egadoptionofcleanenergy,watersecurity,sustainabletransport).B.Sustainablebusinessmodel•SustainablebusinessmodelsshouldalignbusinessandstakeholderrequirementsandembedESGfactorsacrosstheorganisation.Thebusinessmodelsshouldillustratehowstrategicgoalsforsustainability,climateandnet-zeroemissionstranslatetobusinessfunctionobjectives,principles,policies,proceduresandactivities.Asustainablebusinessmodelplacessustainabilityatthecoreofthepeople,processesandsystems(dataandinfrastructure)neededtoachieverequiredoutcomes.•Accountantsandfinanceprofessionalscansupportthedevelopmentofsustainablebusinessmodelsandembedthemthroughprocessidentificationandimprovement,identifykeystakeholderrequirements,ascertaincurrentstatusofthebusinessmodelandoperations,highlightperformancegaps,providerecommendationsandactionplans,defineandembedbestpractices(egcostoptimisationbyimprovingenergyefficiency,wastemanagement,useofsustainablematerials).27ACCOUNTANCYANDFINANCEPROFESSIONALSCANENSURETHEBUSINESSCASEISSTRONG,SUSTAINABILITYANDCLIMATECOMMITMENTSAREFULFILLED,OPPORTUNITIESANDVALUEAREREALISED,ESGRISKSMANAGED,ANDBUSINESSPRACTICESTRANSFORMEDANDIMPROVED.GREENFINANCESKILLS:THEGUIDE4.SUSTAINABLEBUSINESSMODELS,VALUECHAINSANDSUSTAINABLEECONOMY28GREENFINANCESKILLS:THEGUIDECONCLUSION:KEYTAKEAWAYSANDACALLTOACTIONCalltoaction:howprofessionalaccountantscandriveorganisationstonet-zero1.Supportthebusinessindefiningnet-zerostrategiesandsettingtargets(neartermto2030,longtermto2050)toreduceemissionsacrossoperationsandthewidervaluechain.2.DevelopESGstrategiesandsustainablebusinessmodels,usingasustainableinvestment/greenfinancingapproach.Ensureskillsdevelopmentandknowledgesharingongreenfinanceacrossyourorganisation(includingboards,C-suiteandmanagement).3.Takealeadroleindrivingthegreenfinanceagenda.Helptoidentify,assessandadviseonthecosts,benefits,challengesandopportunitiesfromthenet-zerotransitionjourney.4.Enhanceyourunderstandingandawarenessofgreenfinanceproducts,andofhowtoaccessandusethemtoachievetangibleESGandeconomicimpacts.5.Establishappropriatepolicies,procedures,methodsandpracticestoenhanceESGdatainsights.Enablesustainabilityaccountinganddisclosuresthatmeettherequirementsofkeystakeholders.Thisreporthasdiscussedtheroleofgreenfinanceasamechanismforreachingnet-zerocarbonemissions.AtthetimeofACCA’sGECSresearchinQ22022,63%ofrespondentssaidtheywereeitherlikelytousegreenfinanceorwouldpossiblyuseit.Thisisencouragingfortheprofessionbecausetheorganisationaltransitiontonet-zerorequiresfinancialprofessionalstoofferorganisationsmoresupportinexpandingtheirawarenessandknowledgeofgreenfinance.Greenfinanceoffersagreatopportunityfortheprofessiontotakethenet-zeroleadandhelptransformtheirorganisationsintosustainableentitiesthatcreatelong-termvalue.Byembracinggreenfinance,organisationscanmeettheirnet-zerotargets.Conclusion:KeytakeawaysandacalltoactionTheworld’s‘racetozero’isbeingrunupahillthatgetssteeperwitheverydaythatcarbonemissionscontinuetorise.Asaresult,greatertotalemissionsreductionsarerequiredoveranevershorterperiod.Evenwithcarefullymanageddecarbonisationpathways,disruptiontosocieties,economiesandbusinessesisinevitable,accordingtothelatestscience.63%OFRESPONDENTSSAIDTHEYWEREEITHERLIKELYTOUSEGREENFINANCEORWOULDPOSSIBLYUSEIT.(ATTHETIMEOFACCA’SGECSRESEARCH,Q22022)29GREENFINANCEOFFERSAGREATOPPORTUNITYFORTHEPROFESSIONTOTAKETHENET-ZEROLEADANDHELPTRANSFORMTHEIRORGANISATIONSINTOSUSTAINABLEENTITIESTHATCREATELONG-TERMVALUE.GREENFINANCESKILLS:THEGUIDECONCLUSION:KEYTAKEAWAYSANDACALLTOACTION30GREENFINANCESKILLS:THEGUIDEAPPENDICESTERMDESCRIPTIONGreenfinanceReferstofinancialinvestmentsmadethroughstructuredfinancialinstruments(eggreenbonds/sustainability-linkedloans)thatenablesustainabledevelopmentinitiativestoachievepositiveenvironmentaloutcomes,meaningfulsocialimpactsandstrongergovernance,whileprovidingcompetitiveratesoffinancialreturn.CarbonaccountingCarbon/GHGaccountingistheapproachusedtoassessandestimatetheemissionsabusinessemitsmeasuredasanequivalentamountofcarbondioxide.Carbonemissions(greenhousegases–GHG)Carbonemissionsaregeneratedfromtheproductionoruseofproductsorservicesthatreleasecarbon-containinggasessuchascarbondioxide(CO2)andmethane(CH4).Carbonemissionsfrombusinessactivitiesareclassifiedas:•Scope1:directemissionsfromacompany’sownoperations(egenergyuse,production,vehicleuse)•Scope2:indirectemissionscreatedthroughthepurchaseofutilitiesandgeneratedbyproductionfacilities(egpurchaseofelectricity,heat,buildingcooling)•Scope3:allotherindirectemissionsfromoutsideanorganisation’sownershiporcontrol,butinthevaluechain(egbusinesstravel,procurementfromsuppliers,productuse).ClimatefinanceLocal,nationalortransnationalfinancingdrawnfrompublic,privateandalternativesourcesoffinancingthatseektosupportmitigationandadaptationactionsthatwilladdressclimatechange(UnitedNationsFrameworkConventiononClimateChangen.d.b).CarbonoffsettingCarbonemissionreduction/removalorincreaseinstoragetocompensateforemissionsmadeelsewhereowingtoindustrial/businessorhumanactivity.OffsetsaremeasuredintonnesofCO2-equivalent.CarbonreductionReductionincarbon/GHGemissionsthroughinitiativesthateitherreduceconsumptionofcarbon-intensiveproductsandservices(egenergyefficiency)and/ortransitiontolow/zero-carbonsources(egrenewableenergy).ClimateadaptationandmitigationActionstakentoputinplaceaspreventativeorcopingmeasurestoenableadjustmentsthatcansupportthemanagementofactualorexpectedclimatechangeeffects(egmethodsofimprovingwaterconservationorenergyefficiency,orofmonitoringenvironmentalchanges).ClimateresilienceAbilitytoforecast,prepareandrespondtoclimate-relatedphysicalhazards/trends(egfloods,storms,wildfires,heatwaves)andbusinessvulnerabilitytodisturbances.Environmental,socialandgovernance(ESG)Aninvestorcommunityconstructwhichfocusesuponthecoreelementsofthetransitionthroughdecision-makingprocessesandprovidingconfidencetomarketsincertainareas.Oftenusedsynonymouslywithsustainabilitybuthassubtledifferences.AppendicesA.GlossaryGreenfinancecommonlyusedterms31GREENFINANCESKILLS:THEGUIDEAPPENDICESTERMDESCRIPTIONESGinvestingReferstoinvestmentsthataimtopromoteahealthyenvironment,socialresponsibilityandgoodgovernance,includinginvestmentsthatwillreducecorporateGHGemissions–oneofthemaincausesofclimatechange.FinancedemissionsCarbon/GHGemissionsassociatedwithafinancialinstitution’sloansandinvestmentsinareportingyear.GreenwashingTheprovisionofmisleadinginformationorunsubstantiatedclaimsthatacompany’sproducts,servicesoractivitiesaremoreenvironmentallybeneficialorlessharmfulthantheyactuallyare.GreeninvestmentfundsFundsthatinvestonlyincompaniesandprojectsconsideredtobeenvironmentallyandsociallyresponsible,andcommittedtosustainabledevelopment.GlasgowFinancialAllianceforNetZero(GFANZ)AUN-backed‘RacetoZero’globalinitiativethatbringstogetherexistingandnewnet-zerofinanceinitiativesinonesector-widecoalitiontoacceleratethetransitiontoanet-zeroglobaleconomy.Includes450+memberfinancialfirmswithUS$130+trillioninassetsundermanagement.JusttransitionAprocessthatseekstoensurethatno-oneisleftbehindaswemovetoanet-zeroeconomy,whilethebenefitsaremaximisedinawaythatisfairandinclusive.Thisrequiresmanagementoffinancial,politicalandsocialrisks,whilebalancingcomplextrade-offsbetweensocial,economic,environmentalissuesandcarbonreductiongoals.Net-zeroWhenhuman-causedcarbonemissionsarebalancedbytheirremovalasaresultofhumanagencyoveraspecifiedperiod.Net-ZeroBankingAlliance(NZBA)Industry-ledinitiative,convenedbytheUnitedNationsEnvironmentProgrammeFinanceInitiative(UNEPFI)andaccreditedbyRacetoZero,whichbringstogetherfinancialorganisationswith40%ofglobalbankingassets.Memberbankshavecommittedtoaligninglendingandinvestmentportfolioswithnet-zeroemissionsby2050,andsetanintermediatetargetof2030,usingscience-basedguidelines.ParisAgreementCapitalTransitionAssessment(PACTA)Afree,opensourcemethodologyandtoolformeasuringfinancialportfolios’alignmentwithvariousclimatescenariosconsistentwiththeParisAgreement(GreenFinancePlatform2021,UnitedNationsn.d.a).PartnershipforCarbonAccountingFinancials(PCAF)Industry-ledglobalinitiativetoenableastandardisedapproachforfinancialinstitutionstoconsistentlyassessanddisclosecarbon/GHGemissionsassociatedwiththeirloansandinvestmentportfolios.Science-basedtargetCarbon/GHGemissionstargetsareconsidered‘science-based’iftheyareinlinewiththelatestclimatescienceestimatesofwhatisneededtomeettheParisAgreementgoals(ietolimitglobalwarmingto1.5Cabovepreindustriallevels)(UnitedNationsn.d.a).ScienceBasedTargetinitiative(SBTi)JointinitiativeofCDP,UNGlobalCompact,WorldResourcesInstituteandWorldWideFundforNatureintendedtoincreasecorporateambitiononclimateactionbymobilisingcompaniestosetcarbon/GHGreductiontargetsconsistentwiththelevelofdecarbonisationrequiredbysciencetolimitwarmingtolessthan1.5–2C.SustainabilityAnorganisation’sapproachtocreatinglong-termvaluebytakingintoconsiderationhowitoperatesintheecological,socialandeconomicenvironments.Itisbuiltontheassumptionthatdevelopingsuchstrategiesensuresanorganisation’slongevity.32GREENFINANCESKILLS:THEGUIDEAPPENDICESGreenfinanceproductsPRODUCTDESCRIPTIONCarboncreditsFinancialinstrumentsthatprovidetheholderwiththerightstotradetheunusedportionofaspecifiedamount(allowance)ofcarbontheyhavepermissiontoemit.AcarboncreditisanemissionsunitthatisissuedbyacarboncreditingprogrammeandrepresentsanemissionsreductionorremovalofGHGs.Carboncreditsareuniquelyserialised,issued,trackedandcancelledbymeansofanelectronicregistry.GreenbondsFixed-incomefinancialinstrumentsthatareasset-linkedandbackedbytheissuingentity’sbalancesheet,andspecificallydesignedtoraisemoneyfornewandexistingenvironmentalandclimateprojectsforsustainabledevelopment,suchas:•circulareconomyproductsandtech(egreuse,recycle,refurbishmaterials)•conservation(protectionofbiodiversity,natureandmarineenvironments)•cleantransport(eghybrid/electricvehiclesandassociatedinfrastructure)•climatechangeadaptationandmitigation(egcoastalfloodingdefencesystemsandinfrastructure,weatherwarningsystems)•energyefficiency(egenergystorage,smartgrids,waste-to-energy)•greenbuildings(egenergy-efficientbuildings,withinsulation)•pollutionpreventionandcontrol(egreductionofairpollution,GHGcontrol,soilremediation,wasteprevention)•renewableenergy(egsolar,wind,biomasspowergeneration)•sustainablelanduseandnaturalresources(egenvironmentallysustainableagriculture,reforestation,restorationofnature)•sustainablewaterandwaste-watermanagement(egcleanwatersolutions).GreeninvestmentfundsDesignatedfundsthatinvestonlyincompaniesandprojectsconsideredtobeenvironmentallyandsociallyresponsible,andcommittedtoachievingsustainabledevelopment(seegreenbondprojectexamplesbelow).GreenloansDebtinstrumentsusedexclusivelytofinanceorrefinance,inwholeorinpart,newand/orexistingeligibleprojectswithclearenvironmentalbenefits.GreenmortgagesTailoredmortgagestofinancethepurchaseorrefurbishmentofenergy-efficientandgreenbuildings.Asanincentive,borrowerscanreceivelowerinterestratesorincreasedloanamounts.SocialbondsFinancialinstrumentstoraisefundsfornewandexistingprojectsthataddressormitigatespecificsocialissuesand/orseektoachievepositivesocialoutcomes.Sustainability-linkedloansDebtinstrumentsand/orcontingentfacility(egguarantee,letterofcredit)thatincentivisesborrowerstoachieveasetsustainabilityperformanceobjectives/targetsandmetrics,KPIs,orexternalESGratingsthatmeasureperformance.33GREENFINANCESKILLS:THEGUIDEAPPENDICESB.GlobalEconomicConditionsSurveyonClimateFinanceTheGlobalEconomicConditionsSurvey(GECS),carriedoutquarterlybyACCAandIMA,isthelargestregulareconomicsurveyofaccountantsaroundtheworld,andprovidesvaluableinsightsintotheviewsoffinanceprofessionals.InQ22022,itaskedrespondentsaseriesofquestionsonclimatefinance.Theresultsareoutlinedbelow.Insummary,thefindingsonclimatefinanceillustratethatorganisationsacrossallglobalregionsare:nattachingmoreimportancetoenvironmentalandeconomicfactors,with8–9%higherscoresthanforsocialandgovernanceindicators(FigureB1)nequallyconcernedaboutissuesandcostsrelatingto‘lackofnecessaryinfrastructure,technologyandskills’and‘heavydependencyonfossilfuelsandextractiveindustriesinmostcountries’asapotentialchallengeforscalingupgreenfinance(FigureB2)nthinkingof‘significantchangeinbusinesspracticesasakeyrequirementtomeetnet-zero’;thisviewismostnotableinAfricaandSouthAsia,whileresultsfromCentralandEasternEuropeindicateahigherscorefora‘slightchangeinbusinesspractices’(FigureB3)ninneedofmoresupporttoincreaseawarenessandknowledgeofgreenfinanceproducts;thisneedismostprominentintheCaribbean,followedbytheMiddleEast(FiguresB4–B10).FullGECSclimatefinanceresultsFIGUREB1:OverallviewacrossallregionsoftheopportunitiesthatwouldbemostimportantSource:ACCAandIMAGECS(2023)EnvironmentalSocialGovernanceEconomic0%10%20%30%40%50%OtherNoneoftheabove/notapplicable46%38%38%47%1%5%nEnvironmental(egcarbonemissionreduction,circulareconomyinnovation:recycle/reuse,energyandwaterefficiency,sustainablematerials,responsiblesupplychains)nSocial(eggreenjobs,trainingandskillsdevelopment,employeeretention,productquality,customerdemand/engagement,diversityandinclusion/equality)nGovernance(strongergovernance,riskandcomplianceframeworks,boardcomposition,clearrolesandresponsibilities,shareholderempowerment,ethics)nEconomic(reducebusinesscosts/spurinnovationandtechnology)34GREENFINANCESKILLS:THEGUIDEAPPENDICESFIGUREB2:Overallviewacrossallregionsofthemostimportantcosts/concernstoconsiderforgreenfinanceLackofnecessaryinfrastructure,technologyandskillsSigniﬁcantcoststoenableclimateadaptationandresilienceCountrybeingheavilydependentonfossilfuelsandextractiveindustryHomesandcommercialbuildingsbeingunrealistic(particularlyinEMs)0%10%20%30%40%Limited/noaccesstogreenﬁnancetohelpUnrealistictimescalestomeetnetzerotargets33%Regulatory,legal&politicalconstraintsSpeed/lackofadoption/supportfrommycountry’sgovernmentOtherNoneoftheabove/notapplicable33%27%11%12%18%26%18%4%1%FIGUREB3:Expectedchangesinbusinesspracticesneededtoreachnet-zeroemissions0%20%40%60%80%100%TOTALNorthAmericaMiddleEastAsiaPaciﬁcCentral&EasternEuropeSouthAsiaWesternEuropeAfricaCaribbean41%5%40%3%11%36%7%42%3.5%11.5%31.5%6%50%3%9.5%37%4%43.5%1%14.5%29%14%57%54%17%5%24%39%9.5%8.5%43%55.5%4%29.5%6%5%29%6%47%18%SignificantchangeSlightchangeNochangeatallDon’tknowNotapplicableSource:ACCAandIMAGECS(2023)Source:ACCAandIMAGECS(2023)FIGUREB4:Awarenessofcarboncredits0%20%40%60%80%100%TOTALNorthAmericaMiddleEastAsiaPaciﬁcCentral&EasternEuropeSouthAsiaWesternEuropeAfricaCaribbean22%11%27%1%39%12%16%19%1%52%40%16%20%24%12%10.5%45.5%2%30%29%35.5%35.5%28%38%3%21%27%40.5%9.5%23%17%13.5%29%1.5%39%53%20%27%10%NotawareatallAwarebuthavenoknowledgeBasicknowledge/understandingonlyGoodlevelofknowledge/understandingI’manexpertSource:ACCAandIMAGECS(2023)35GREENFINANCESKILLS:THEGUIDEAPPENDICESFIGUREB5:Awarenessofgreeninvestmentfunds0%20%40%60%80%100%TOTALNorthAmericaMiddleEastAsiaPaciﬁcCentral&EasternEuropeSouthAsiaWesternEuropeAfricaCaribbean24%11%29.5%35%18%29%3%50%46%4%31%19%19%18%37%26%20%40%27%17.5%55%17.5%23.5%33%12%31.5%28%16%28%2%26%43%21%36%10%13%NotawareatallAwarebuthavenoknowledgeBasicknowledge/understandingonlyGoodlevelofknowledge/understandingI’manexpertSource:ACCAandIMAGECS(2023)FIGUREB6:Awarenessofgreenbonds0%20%40%60%80%100%TOTALNorthAmericaMiddleEastAsiaPaciﬁcCentral&EasternEuropeSouthAsiaWesternEuropeAfricaCaribbean31.5%9%27%31.5%36%25.5%4.5%34%47.5%5%19%28.5%22%14.5%32.5%31%31%44%19%18%50%25%29%29%10%32%33%14%27%3%23%57%14%29%7%6%1%NotawareatallAwarebuthavenoknowledgeBasicknowledge/understandingonlyGoodlevelofknowledge/understandingI’manexpertSource:ACCAandIMAGECS(2023)FIGUREB7:Awarenessofsocialbonds0%20%40%60%80%100%TOTALNorthAmericaMiddleEastAsiaPaciﬁcCentral&EasternEuropeSouthAsiaWesternEuropeAfricaCaribbean41%24%5%30%33%44%23%54%25%21%32%10%33%25%20%40%40%27.5%38%7%27.5%51%27%4%18%38%12%20%30%64%14%22%NotawareatallAwarebuthavenoknowledgeBasicknowledge/understandingonlyGoodlevelofknowledge/understandingI’manexpertSource:ACCAandIMAGECS(2023)36GREENFINANCESKILLS:THEGUIDEAPPENDICESFIGUREB8:Awarenessofsustainabilitylinkedloans0%20%40%60%80%100%TOTALNorthAmericaMiddleEastAsiaPaciﬁcCentral&EasternEuropeSouthAsiaWesternEuropeAfricaCaribbean34.5%26%9.5%30%29%45%22%32%23%41%17%11%43%29%21%29%36%26%52%15%7%41%27%10%22%32%15%20%32%69%19%12%4%4%14%1%NotawareatallAwarebuthavenoknowledgeBasicknowledge/understandingonlyGoodlevelofknowledge/understandingI’manexpertSource:ACCAandIMAGECS(2023)FIGUREB9:OverallviewacrossallregionsofwhethergreenfinancecanbeusedintheorganisationnNo,greenﬁnanceisnotsuitableforourorganisation,17%nNo,wedonothavetheresourcestogainaccesstogreenﬁnance,14%nMaybe,41%nWearelikelytousegreenﬁnanceinthefuture,22%nWearealreadyusinggreenﬁnance,6%22%41%14%6%17%Source:ACCAandIMAGECS(2023)FIGUREB10:Regionalviewsofgreenfinance0%20%40%60%80%100%NorthAmericaMiddleEastAsiaPaciﬁcCentral&EasternEuropeSouthAsiaWesternEuropeAfricaCaribbean35%7%9%44%12%21%12%55%12%9%35.5%31.5%9%5%57%24%19.5%27%41.5%15.5%19%9.5%40.5%13.5%37%3.5%31%23.5%35%23.5%5%5%12%5%7%15.5%15%18%Source:ACCAandIMAGECS(2023)No,greenfinanceisnotsuitableforourorganisationNo,wedonothavetheresourcestogainaccesstogreenfinanceMaybeWearelikelytousegreenfinanceinthefutureWearealreadyusinggreenfinance37GREENFINANCESKILLS:THEGUIDEAPPENDICESFurthersurveyquestionsandresultsRespondentswereaskedaseriesofquestionsabouttheirownorganisations’abilitytoachievenet-zerogoalsinthecomingyearsandthefactorsaffectingthis(FiguresB11–B15).FIGUREB11:Respondents’self-assessmentoffinanceteams’knowledge/skillsforachievingnet-zeroemissionsKNOWLEDGESKILLSETVerypoor9%Poor18%Good27%Verygood11%Neithergoodnorpoor29%Notapplicable6%VerypoorGoodNeithergoodnorpoorPoorVerygood10%18%26%32%9%Notapplicable5%38GREENFINANCESKILLS:THEGUIDEAPPENDICESFIGUREB12:Respondents’assessmentoffinanceteams’resourcesforreachingnet-zerogoalsFIGUREB13:Respondent’sexpectationofwhethertheirorgnaisationwillchangetheirnetzerotimelinesduetocurrentcostinflationpressuresEXTENDTHETIMELINESTAYTHESAMEACCELERATETHETIMELINE25%Notapplicable5%StronglydisagreeAgreeNeitheragreenordisagreeDisagreeStronglyagree8%6%21%23%37%Don’tknow21%Notapplicable10%35%9%39GREENFINANCESKILLS:THEGUIDEAPPENDICESFIGUREB14:Respondents’expectationsofwhethertheirbudgetallocationsforachievingnet-zeroemissionswillriseorfallINCREASESTAYTHESAMEDECREASE24%FIGUREB15:Whetherorganisationalstrategiesforachievingnet-zerogoalshavechangedinlightofthefollowingeventsUKRAINIANCONFLICTCOSTINFLATIONABNORMALLYHIGHSUMMERTEMPERATURESYesNoUnsureUnsure23%32%21%28%57%15%51%35%14%19%65%16%40GREENFINANCESKILLS:THEGUIDEREFERENCESIBFSingapore(2022b),SkillsFrameworkforFinancialServicesTechnicalSkillsandCompetencies(TSC)ReferenceDocument:ClimateChangeManagement.<https://www.ibf.org.sg/programmes/Documents/01%20ESG%20TSCs/12.%20Climate%20Change%20Management.pdf>,accessed27January2023.IBFSingapore(2022c),SkillsFrameworkforFinancialServicesTechnicalSkillsandCompetencies(TSC)ReferenceDocument:NaturalCapitalManagement.<https://www.ibf.org.sg/programmes/Documents/01%20ESG%20TSCs/6.%20Natural%20Capital%20Management.pdf>,accessed27January2023.IBFSingapore(2022d),SkillsFrameworkforFinancialServicesTechnicalSkillsandCompetencies(TSC)ReferenceDocument:TaxonomyApplication.<https://www.ibf.org.sg/programmes/Documents/01%20ESG%20TSCs/1.%20Taxonomy%20Application.pdf>,accessed27January2023.IBFSingapore(2022e),SkillsFrameworkforFinancialServicesTechnicalSkillsandCompetencies(TSC)ReferenceDocument:ImpactIndicators,MeasurementandReporting.<https://www.ibf.org.sg/programmes/Documents/01%20ESG%20TSCs/2.%20Impact%20Indicators%2C%20Measurement%20and%20Reporting.pdf>,accessed27January2023.IBFSingapore(2022f),SkillsFrameworkforFinancialServicesTechnicalSkillsandCompetencies(TSC)ReferenceDocument:SustainabilityReporting.<https://www.ibf.org.sg/programmes/Documents/01%20ESG%20TSCs/3.%20Sustainability%20Reporting.pdf>,accessed27January2023.IBFSingapore(2022g),SkillsFrameworkforFinancialServicesTechnicalSkillsandCompetencies(TSC)ReferenceDocument:SustainabilityRiskManagement.<https://www.ibf.org.sg/programmes/Documents/01%20ESG%20TSCs/4.%20Sustainability%20Risk%20Management.pdf>,accessed27January2023.IBFSingapore(2022h),SkillsFrameworkforFinancialServicesTechnicalSkillsandCompetencies(TSC)ReferenceDocument:SustainabilityStewardshipDevelopment.<https://www.ibf.org.sg/programmes/Documents/01%20ESG%20TSCs/9.%20Sustainability%20Stewardship%20Development.pdf>,accessed27January2023.IBFSingapore(2022i),SkillsFrameworkforFinancialServicesTechnicalSkillsandCompetencies(TSC)ReferenceDocument:Non-financialIndustrySustainableDevelopments.<https://www.ibf.org.sg/programmes/Documents/01%20ESG%20TSCs/11.%20Non-Financial%20Industry%20Sustainability%20Developments.pdf>,accessed27January2023.IBFSingapore(2022j),SkillsFrameworkforFinancialServicesTechnicalSkillsandCompetencies(TSC)ReferenceDocument:SustainableInsuranceandRe-InsuranceSolutionsandApplications.<https://www.ibf.org.sg/programmes/Documents/01%20ESG%20TSCs/10.%20Sustainable%20Insurance%20and%20Re-Insurance%20Solutions%20and%20Applications.pdf>,accessed27January2023.IBFSingapore(2022k),SkillsFrameworkforFinancialServicesTechnicalSkillsandCompetencies(TSC)ReferenceDocument:SustainableInvestmentManagement.<https://www.ibf.org.sg/programmes/Documents/01%20ESG%20TSCs/8.%20Sustainable%20Investment%20Management.pdf>,accessed27January2023.ACCA(2020),ProfessionalAccountantsChangingBusinessforthePlanet:AGuidetoNaturalCapitalManagement.Downloadablefrom<https://www.accaglobal.com/sg/en/professional-insights/global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