Only a week ago I posted a piece on the need for organisations to take Climate Scenario Planning seriously – FP&A teams – are you Climate Scenario Planning? My focus in this piece was around ensuring organisations have long term plans that enable them to adjust and thrive as climate change brings about changes to the markets they operate in. As I said –
“Whatever decisions are made next week at the COP26 event, and whether there are agreements reached and committed to, climate change is going to affect all organisations and they should be planning for this.”
Today, that pressure for long term climate scenario plans has become much more pressing for UK financial institutions and companies listed on the London Stock Exchange. Under new Treasury rules, financial institutions and companies with shares listed on the London Stock Exchange must come up with net-zero transition plans, which will be published from 2023. The BBC reported the announcement here- COP26: UK firms forced to show how they will hit net zero and you can read the treasury statement here – Chancellor: UK will be the world’s first net zero financial centre.
Whilst the structure for these ‘Net-Zero’ plans has not yet been set, it is clear that there will be standards that will ensure they are based on facts and not just marketing spin. It is also likely that there will not only be standards for the planning process but also for the reporting of progress to meeting these plans.
This announcement does not change the fact that all organisations; large, small, public, private or not for profit; should be doing the right thing when it comes to climate change. Their stakeholders will increasingly demand they do this. Otherwise, they will not continue to buy their products or invest in these organisations. To do the right thing all organisations will need to integrate long range scenario planning into their FP&A processes to enable them to plan for many different climate futures. History shows that Government initiatives like this always start with large organisations but eventually the legislation is made a requirement for smaller and smaller organisations.
I am not going to reiterate the characteristics of the sort of planning systems organisations will need. This is in my previous blog HERE. What I will say is there are Cloud based planning, budgeting and forecasting solutions available today that will deliver on what will be required. These are no longer expensive or difficult to implement. I am very happy to provide advice and debate the subject. If you want to know more, please reach out via LinkedIn or use the contact page of our website www.brovanture.com.
We now need to consider the implications and details of what will become a new form of statutory reporting for climate information! But that is for another blog…
Until next time
For more useful Oracle Cloud EPM and NetSuite ERP blogs posted by my colleagues, see the Brovanture website HERE