The Carbon Accountant

Julie Desjardins – Consultant with Desjardins Associates Consulting

When working on my story on accountants I spoke to Rob Kaszanowski, the man organizing the first Carbon Finance Conference in Calgary in October. This is what he had to say about Julie Desjardins.

In a nutshell, when you use the words “Governance” and “Climate Change Risk” in the same sentence, people say “You must have Julie Desjardins on your panel”.

A point I make in the article is that you must disassociate the image of the number crunching bookkeeper with the modern day accountant. These people decode exceedingly complex financial statements and, more often than not, are in the room or are leading the room when important decisions get made.

Desjardins is a chartered accountant and has been the climate change advisor to Canadian Institute of Chartered Accountants for the past 10 years.

UL: Can you explain your role as a chartered accountants and what’s happening with the profession going forward?

JD: I guess I’m not a typical accountant because I focus in on disclosures outside of financial statements. I think it’s generally recognized that financial statements alone cannot deliver all the information that’s required for a company. You need a contextual, a narrative setting and quite frankly financial statements are very complex these days and even if you’re a chartered accountant sometimes you need help to understand these things. So narrative, contextual disclosures are required. Financial statements are historical, they’re transaction based, there is a lot of info that investors and people need about companies that is more forward looking and that’s generally found in reports outside of financial statements.

UL: Is this a trend where CA’s are moving away from strict balance sheet reporting and doing more contextual, narrative disclosures?

JD: I don’t think they’re moving away from it. I think we will always be the experts there but I think there is a general and growing recognition within the leadership of the profession that financial statements should be complemented by additional performance reporting and non-financial performance reporting.

Another thing I am is the judge for the Corporate Reporting Awards for Sustainability Reports so I think there’s more of a need for the consideration of environmental and social matters for assessing the long term success of a company. I’ve been saying this for a long time. You don’t have to look much farther than BP Oil to understand this is a risk that is certainly very material. We, as a planet, have to start redefining success.

UL: What makes chartered accountants so well positioned to start redefining success?

JD: I think every profession has a role to play and chartered accountants as a profession has to play its role also. I think that some of the skill sets that CA’s bring; number one we’re business leaders, number 2 we’re a profession that’s trained in auditing and assurance services, that’s important that so when you deal with information it’s reliable and verification helps to bring reliability to data.

To be very honest there’s also a challenge for this profession. While some of the leadership and some others appreciate the need to think a little more broadly than historical financial numbers and include more non-financial information not everybody in the profession is there.

UL: Why do companies that typically aren’t thought of as large GHG emitters need to start thinking and planning about carbon accounting?

JD: Even if we stopped all the greenhouse gas emissions right now we’re still going to have to adapt. Every company, depending on where they’re located, is going to have to consider how they’re going to adapt. If you rely on water and water becomes scarcer. If there is potential for significant weather events even if it’s not in your direct backyard. It could be in your supply chain and it could impact you if they’re in coastal regions or in the Canadian north. Those ice roads aren’t lasting as long or the tailings ponds are seeping into permafrost that’s no longer permafrost.

Suppose you are a company that is not a large emitter but you aspire to supply a company like WalMart. Walmart, throughout its supply chain now, is asking for their suppliers to report their greenhouse gas emissions and to show that they’re taking actions to reduce them. If you want to have a chance at that market you have to have that information.

Similarly, even though product labeling for GHG emission isn’t at all popular in Canada in Europe it is, particularly in the food industry. Some of our western Canadian companies supply inputs into that food industry, if you’re not able to provide them with the information on this you’re going to hurt your competitiveness.

Walmart’s a very interesting example. They’ve turned around their reputation and they are showing leadership through their supply chain. Now, one can speculate is it because they’re altruistic, I suspect not, it’s because they see that through this they can reduce costs. And if they can reduce costs and do good at the same time, why not.

This entry was posted on Wednesday, June 30th, 2010 at 1:21 am and is filed under Articles. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.