Musings on Accounting Research by Steve

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Climate science and accounting


What can Accounting and auditing do for climate science?

Not an easy question to answer. While there is a lot of CSR measurement related research going on in accounting, it is often from the investor point of view! But we are all in this together, and investors are not going to be able to isolate themselves from effects of climate that science interprets for us. Can CSR researchers move beyond this?

On the auditing side the answer may be a bit easier. We urgently need assurance that is credible over the various climate related reports that are regularly released and updated. There is a lot of skepticism about these reports, especially in the USA, and it appears to me that even compilation assurance about what is reported in the underlying academic climate research is needed. You often hear statistics like 97.x percentage of academic climate research says this. Those of us brought up in democracies are almost always wary of such high levels of consensus, but that is not true in science where much of it is based on 99.9999%. However, we need decision makers to act on this information and if there are doubts about its accuracy, assurance maybe the way to go.

Management accountants need to develop reporting systems in their firms that quantify’s the effects of various scenarios on operations and assets value. If a two foot rise in sea level is going to put half of your warehouse under water with a 90% probability, would it not be a good idea to plan for this rather than be surprised one day. You see many climate science models do not predict continuous gradual shifts but discontinuous large scale short timeframe shifts.

Anyhow things for us to think about and for younger researchers maybe even to act on.

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