As the country set to host the COP26 UN climate change summit next year, the UK faces global and domestic pressure to lead by example in building a green recovery from the pandemic. 

But as the Committee on Climate Change (CCC) – the government’s independent advisory body – noted earlier this year, policies to decarbonise key areas such as transport, buildings, and heavy industry remain piecemeal at best. The government is therefore expected to begin filling in these gaps in the coming months, and accountants should be prepared for a rush of potentially ambitious climate policies. 

“We’ve got the net zero target for 2050, but as yet no plan for how the UK is going to decarbonise,” says Francesca Sharp, ICAEW’s Technical Lead for Climate Change. “So our members can be really effective stewards in helping organisations understand and respond to government policies, schemes and taxation rules that might be implemented.”

In the immediate term, government stimulus measures are critical, and can also set a long-term trajectory for the economy. With job losses mounting, ICAEW has been among many arguing shovel-ready, labour-intensive, green infrastructure projects backed by skills training schemes can deliver an immediate jobs boost in every corner of the country. Projects could even support greener habits gained during lockdown, such as better access to cycle lanes, 5G broadband and home energy-efficiency upgrades.

Delivering them nationwide also opens up a key role for local government. And while councils may be cash-strapped, innovative financing models are emerging. In July, West Berkshire Council became the first in the UK to launch a green bond, seeking to raise £1m from residents to fund solar panels on five council buildings.

But to deliver long-term resilience it helps to align governance, decision-making and spending with the overall goal. There are growing calls, therefore, to embed climate and environmental considerations more deeply into HM Treasury’s Green Book, which governs how spending is evaluated at the top of government.

This could have a “very powerful signalling effect”, says Ed Humpherson, director general for regulation at the UK Statistics Authority, a chartered accountant who plied his trade at the National Audit Office in the wake of the last financial crisis. 

“What will work is if it is a rounded, comprehensive endeavour where the Green Book, the recovery projects that go through it, and the budgeting for these projects all line up with a coherent, strategic thread running all the way through. That’s what you’re looking for.”