Climate accountants have an eye on the future

In the wake of increasing environmental consciousness and a growing commitment to sustainability, a new type of CPA has emerged: the climate accountant. This specialized professional plays a crucial role in assessing both the risks and opportunities associated with climate change, supporting companies in navigating the carbon accounting landscape and integrating broader ESG considerations throughout their operations.  

“Climate accountants like myself are basically translators who help businesses understand and address climate and ESG,” says Katie Blum, a Canadian CPA and principal at Holtara, an ESG consultancy in New York.  

Blum started her career on a more traditional path with Deloitte in 2017. As a senior consultant based in Toronto, she focused on finance function modernization and process improvement. “At the time, the term ‘climate accountant’ didn’t exist,” she says. “I was very engaged with Deloitte’s ESG initiatives, but I was always under the impression that these were side-of-desk efforts—things you did because you enjoyed them. They were never necessarily the focus.” 

But the business world was beginning to pay more serious attention to climate change and the role companies play in mitigating and adapting to its impacts. This heightened awareness rapidly gained momentum after the historic 2015 Paris Agreement, where nearly 200 parties committed to limiting global temperature increases to well below two degrees Celsius above pre-industrial levels.  

In 2019, Blum became more acutely aware of the challenge when she represented Deloitte at the 10th annual One Young World Summit in London. During the event, 1,500 young leaders convened to tackle the planet’s most pressing challenges, with climate change at the forefront of many panel discussions. “[There was] a recognition that it was the onus of businesses and the private market to start pulling up their socks and drive positive change to make sure we have a viable planet,” she says. “The summit helped me see that there was more to good business than profit, and that I wasn’t satisfied with the change I was driving with my current work.” 

Keen to explore different opportunities, Blum joined the Toronto-based firm Manifest Climate as a climate strategist in 2020, where she assisted in building their sustainability consulting efforts. The following year, the Canadian government announced its commitment to achieving net-zero emissions by 2050, aligning with more than 120 countries that have made similar pledges. To address the pressing need for more reporting standards ensuring the fulfillment of these commitments, new regulatory bodies have emerged in the past three years.  

Established by the International Financial Reporting Standards (IFRS) Foundation in 2021, the International Sustainability Standards Board (ISSB) issued its inaugural sustainability disclosure standards, IFRS S1 and IFRS S2, in June 2023. In Canada, the recently created Canadian Sustainability Standards Board has already commenced operations to support ISSB standards adoption.  

“A lot of big companies have made public statements about ambitious ESG targets like becoming net zero,” says Blum. “Where the business world is falling short right now is accountability to those targets and ensuring that promises are being met: if you're going to talk the talk, you’ve got to walk the walk.” 

Blum believes this accountability gap presents a major opportunity for CPAs to harness their skills by enabling businesses to understand and adhere to the new metrics. These efforts are the focus of her position at Holtara, where she guides clients in optimizing sustainability and ESG across the investment lifecycle, from initial acquisition to exit opportunities or IPOs. 

When Blum first started as a climate accountant in 2020, the field was primarily confined to minor CSR-driven activities. Today, it is becoming integrated into a business’s operations, with numerous companies embedding new ESG or sustainability-specific roles within their core finance functions. But there’s still more work to do: According to a 2022 Deloitte survey on sustainability, 68 per cent of Canadian finance professionals reported a deficiency in sustainable finance skills within their organizations. 

“Climate accounting has really taken off in the past two years, but it’s still nowhere near as mature a market as traditional financial reporting,” Blum says. “Eventually, the goal is for climate and ESG data to be treated with the same level of rigor and integrity as conventional financial data. The field is in the midst of growing pains right now and the rules aren’t as robust or detailed, but this presents an exciting opportunity for CPAs to get in at the ground level.” 

Photo caption: Katie Blum is a Canadian CPA and principal at Holtara, an ESG consultancy in New York.