Economy Middle East speaks to Michael Izza, CEO of the Institute of Chartered Accountants in England and Wales (ICAEW) on how businesses can achieve their climate targets.
Izza highlights ICAEW’s strategy to reach sustainability goals globally. He emphasizes the importance of transitioning to a net-zero economy equitably and transparently.
ICAEW seeks to accelerate the transition to a net-zero economy through collaborations with organizations and stakeholders.
Economy Middle East: How can businesses move beyond simply setting ambitious climate targets to implementing concrete action plans that deliver tangible results?
Michael Izza: Businesses often set ambitious climate goals but struggle to translate them into actionable strategies and measurable outcomes. The key lies in integrating sustainability into the core fabric of the business. It’s not about having a separate sustainability department; it’s about embedding sustainability principles into every decision and every process. This includes setting measurable targets, establishing clear accountability mechanisms, and regularly monitoring and evaluating progress. Businesses should also engage with their stakeholders, including employees, customers, and investors, to ensure that their sustainability efforts are aligned with their expectations.
At ICAEW, we want to see a joined-up approach that encompasses detailed impact assessments, strategic resource allocation, and clear communication of progress. By aligning financial and sustainability goals, businesses can ensure that their efforts are not only environmentally responsible but also commercially viable.
Businesses have a crucial role to play in ensuring that the transition to a net-zero economy is just and equitable, leaving no one behind. This includes supporting workers in industries that are most affected by the transition. Businesses need to provide retraining and upskilling opportunities. Moreover, they need to invest in communities that are vulnerable to climate change.
Economy Middle East: How can we ensure that the transition to a net-zero economy is not only rapid but also equitable and leaves no one behind? What specific actions is ICAEW taking to support a transition that prioritizes social impact alongside environmental sustainability?
Michael Izza: A just transition to a net-zero economy requires a concerted effort to address environmental and social considerations. The benefits of the transition must be shared equitably. Furthermore, the costs must not be disproportionately borne by vulnerable communities.
We’re committed to supporting a just and equitable transition by working with businesses, governments, and organizations to develop policies and practices addressing environmental and social concerns.
For example, we are playing an active role in the development of a Transition Plan Framework. We produce comprehensive content on sustainability for our members. Additionally, we have developed a sustainability certificate as a foundational piece of learning for members and the Fundamentals of Sustainability Programme for students. Besides, we’re building a range of learning materials to empower members to deepen their sustainability knowledge.
Economy Middle East: There is growing scrutiny over the credibility and transparency of sustainability reporting. How can we ensure that companies are reporting accurately, comprehensively, and responsibly on their environmental impact and sustainability efforts?
Michael Izza: People are getting wise with greenwashing. At a time when data is king, governments, investors, and customers are demanding ESG reporting. Thus, many companies are struggling with fragmented standards and a complex landscape.
As chartered accountants, our job is to strategically guide our organizations and clients. We seek to inspire confidence in ESG reporting through the use of consistent and coherent methodologies. This is especially true as the sustainable business landscape grows more connected and complex.
That’s where IFRS S1 and IFRS S2 come in. These new reporting standards represent a significant step forward in the global effort to standardize sustainability reporting. While their mandatory adoption is still pending jurisdictional approvals, they act as the unifying force we need.
Therefore, having a universal language for sustainability will leave no room for miscommunication or confusion. This will improve trust and confidence in company disclosures about sustainability. It will also provide investors and other stakeholders with critical information to make informed decisions.
Transparency is key to building trust. Companies need to be open and honest about their successes and challenges. They should share their goals, the progress they’ve made, and the areas where they need to improve.
Besides, it’s not just about numbers. Companies should be transparent about their methodologies, data sources, and any assumptions made. This allows stakeholders to understand the rationale behind the reported figures and assess their accuracy.
By promoting standardized reporting frameworks, robust methodologies, and transparency, we’re working to ensure that companies report responsibly on their environmental impact and sustainability efforts. This ultimately leads to a more sustainable and responsible business environment for everyone.
Economy Middle East: How is ICAEW collaborating with other organizations and stakeholders to accelerate the transition to a net-zero economy? What are the potential synergies and opportunities for collective impact?
Michael Izza: We’re dedicated to collaborating with organizations, governments, and businesses to accelerate progress and drive the net-zero agenda.
However, we are at a point where business is the voice of progress when it comes to meeting climate goals. Business leaders have been criticizing governments for pulling focus from net zero, calling for consistent targets.
When the UN revealed how little progress had been made on meeting the SDGs, a coalition of professional organizations, including ICAEW, were among the voices calling for faster, more immediate action.
As a leader in our field, we were the first major professional body to declare carbon neutrality in Autumn 2020. We continue to seek ways to minimize our carbon footprint, guide our members on their net zero journeys, and support global action. That includes joining forces with our fellow accounting bodies around the world in supporting the profession to help governments adjust economic policy in ways to minimize climate change.
We are not only focused on making sure that we make this transition quickly but in the right way. Climate, nature, and society are intrinsically linked. We cannot solve the climate crisis without reversing nature’s loss. We cannot make the world a more equal place without addressing the environmental crisis. In addition, we cannot reach net zero without bringing all of society with us.
Turbo-charging innovation and investment in net-zero and nature-positive activities are significant opportunities to drive sustainable economic growth and build the resilient businesses of the future.
Realizing this vision for the future requires deep, transformative, cross-economy action. This requires global coordination, ambition, and political will on a scale never previously achieved by humanity.
About Michael Izza
Appointed Chief Executive in 2006, Michael’s leadership has seen ICAEW embrace a vision of building a world of strong and sustainable economies, transforming itself into a professional accountancy body with a truly global identity and reach.
Michael qualified as an ICAEW Chartered Accountant in 1986 with Coopers & Lybrand after graduating in law from Durham University, where he was also president of the student union. He has served as a school governor for eleven years and is a trustee of several charities, including Moorfields Eye Charity, supporting London’s world-class Moorfields Eye Hospital. He is vice chair of the Board and chair of the Audit and Risk committee. Michael was made a professor in practice at Durham Business School in 2023.
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