Climate Risk and Environmental Accounting

Closes:

Climate risk is an emerging form of business risk that includes potential impacts from natural disasters, changes in natural weather patterns and technological advancement, market, policy and legal changes resulting from climate changes. Recent developments, such as the 2015 Paris Agreement; Task Force on Climate-Related Financial Disclosures (TCFD) recommendations on climate risk; the announcement of the new standard board for sustainability standards (International Sustainability Standards Board) in climate UN’s COP26; and the proposed requirements by the UK and New Zealand that mandate companies to disclose their climate information have all increased pressure on companies to adopt accounting processes to manage and subsequently make disclosures of such risk. Following recent legislative developments, climate risk is expected to play an important role in companies’ journey toward a net-zero business model and holds important implications on traditional environmental accounting (including assurance) practices.  

Accordingly, the editorial team of this special issue invites high-quality submission of research work relating to all aspects of climate risk and its implications for companies’ environmental processes, including reporting and disclosure, assurance and verification, materiality considerations and stakeholder engagement. We specifically welcome papers that will provide new insights into how companies have used, are using and will use environmental accounting to address the climate risk and opportunities arising due to recent legislative/policy developments. This special issue aims to provide a timely and comprehensive overview of corporate climate risk exposure and its impact on corporate environmental accounting processes and reporting.  

A wide diversity of stakeholders – from global policymakers, politicians, financial institutions and regulators, to environmentally conscious investors, suppliers, consumers, and employees—are all pressing for low-emissions economies. They demand organisations to recognise and report on what climate change might mean to them in terms of risks and opportunities, and to put mechanisms in place to address these challenges. 

During the last decade, although there has been some progress in environmental accounting literature (Senn & Giordano-Spring, 2020), the majority of scholarship either overlooked the mandatory requirement related to climate risk (Schneider et al., 2018) or such studies predate current legislative developments. Therefore, existing literature falls short of capturing recent legislation on climate issues, particularly those related to climate risk (physical and transitional), creating a significant gap in this area. 

About this special issue 

This special issue is expected to contribute positively to one of the most prominent phenomena (Climate change) by publishing papers that focus on the new actions adopted by firms in different industries to mitigate global warming. It will also shed light on new trends in local, national, and international climate risk reporting and financing. In doing so, the outcomes and findings of papers can be used to inform policy debate about recent developments mandating climate risk.  

This special issue will broaden our understanding of what are efficient solutions for climate change and what needs to be done to encourage different stakeholders to share the burden. This may lead to new regulations that encourages environmental investment and promotes corporate climate accountability. As more and more countries are enacting regulations mandating climate risk disclosure, debates have been triggered about the costs and benefits of legislating for such disclosure. Through these special issues papers, we can inform the ensuing policy debate.  

This special issue principally features climate change and addresses Goal 13 of the UN’s Climate Action initiative to “Take urgent action to combat climate change and its impacts”. Moreover, this issue is expected to attract papers that focus on the new actions adopted by firms in different industries to mitigate global warming, which is directly related to Goals 12 (responsible consumption and production), 7 (Affordable and Clean Energy), and 8 (Decent Work and Economic Growth). We therefore encourage submissions to (albeit not limited to) the following research areas: 

  • New insights on how companies have used, are using and will use environmental accounting to address the climate risk and opportunities arising from recent legislative/policy developments.  
  • Theoretical or empirical evidence of how accounting processes or regulatory changes enhance or impede the quality of organisational climate management (such as reporting and disclosure, assurance and verification, materiality considerations, etc.). 
  • The interaction between companies and stakeholders, based on environmental accounting processes. 
  • The role of organisational leadership (board of directors and executives) on organisational climate compliance. 
  • Organisational use of technology (e.g., Fintech, blockchain and big data) in accounting for their climate footprints and subsequent assurance of environmental reports. 

Submissions 

Please submit papers adhering to a word limit of 8,000 words, excluding tables and figures. 

Submissions open: 10/01/2022 

Submissions close: 31/07/2022 

Expected publication date: July 2023 

Guest Editors: 

Jia Liu 

Business School, University of Portsmouth 

[email protected] 

 

Othmar Lehner  

Hanken School of Economics, Finland 

[email protected] 

 

Rashid Zaman 

School of Business and Law, Edith Cowan University, Australia 

[email protected] 

 

Nader Atawnah 

School of Business and Law, Edith Cowan University, Australia 

[email protected] 

 

References 

Senn, J. and Giordano-Spring, S. (2020), "The limits of environmental accounting disclosure: enforcement of regulations, standards and interpretative strategies", Accounting, Auditing & Accountability Journal, Vol. 33 No. 6, pp. 1367-1393. https://doi.org/10.1108/AAAJ-04-2018-3461 

Schneider, T., Michelon, G., & Paananen, M. (2018). Environmental and social matters in mandatory corporate reporting: An academic note. Accounting Perspectives, 17(2), 275-305.