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The Role of Accountants in Sustainability

Author: Ellise Aquilina and Summik Limbu

Published: 12 Jul 2024

Ellise Aquilina and Summik Limbu examine how accountants can drive and promote sustainability to their firms and to client organisations.

Accountants are well positioned to drive sustainable practices within their firms and client organisations. They have the capability to measure and report on ESG performance, evaluate sustainability-related risks and opportunities, and incorporate these insights into financial reporting and strategy. Their expertise helps company executives incorporate sustainability into daily decision-making, making them crucial in transitioning to a sustainable economy.

The businesses of today, confronted with escalating environmental challenges and growing societal awareness, are beginning to make sustainability a critical focus. The accounting profession, once primarily focused on financial reporting and compliance, is evolving to support sustainable practices necessary for thriving in a changing world.

What sustainability means for practice firms

Integrating sustainability into your accounting firm’s practices can open new opportunities, stimulate business growth, and support your clients' success in the emerging sustainable economy. As firms face increasing pressure from customers, consumers, investors and employees, sustainability is becoming more important. Accountants must recognise the opportunities and challenges that come with this shift. 

Embracing sustainability requires taking internal and client-facing actions to integrate it into their practices.

Internal sustainability credentials

Sustainability within an accounting firm is crucial not just for environmental benefits but also for enhancing reputation and profitability. While practices like reducing paper use and implementing energy-efficient technologies are important, firms could aim higher. Committing to a sustainability or net zero strategy, pursu ing B Corp certification, or signing up for initiatives like the Better Business Act can further strengthen a firm’s reputation. These commitments demonstrate a genuine dedication to sustainability, attracting clients who value positive impact. Additionally, this proactive approach helps firms comply with evolving regulations and stay ahead of environmental laws, minimising legal risks and ensuring long-term viability.

Leading your clients on a sustainability journey AND providing them with sustainability services

As trusted advisers to business, accounting firms are expected to support their clients to be more resilient. They can promote sustainable behaviours among clients by offering services like Carbon Accounting and demonstrating their own sustainability initiatives. As a key adviser you can help clients see the benefits and feasibility of adopting sustainable practices.

Communicating sustainability to clients

Sustainability is here to stay

Sustainability is becoming increasingly embedded in our global consciousness and business practices. In fact, it’s a new way of doing business. When guiding clients as an accounting firm, it's important to articulate the competitive advantages of adopting sustainable practices for enduring prosperity. Firms can highlight the competitive advantages such as regulatory compliance, enhanced brand reputation, and access to new markets.

Sustainability is not just an expense, it’s an investment

It’s crucial for firms to shift client perspectives to view sustainability as a profitable investment, not a cost. Sustainable practices can drive innovation, mitigate risks, and open new growth opportunities. They could improve employee recruitment, retention, and morale, creating a resilient organisational culture. Addressing environmental and social challenges also helps businesses avoid regulatory fines, reputational damage, and supply chain disruptions.

Sustainability is not exclusively for big companies

It's a common misconception that sustainability initiatives are only for large corporations with substantial resources. Firms have a crucial role in demonstrating to their clients, both large and small, that sustainable practices are not only feasible but also advantageous for businesses of every size. Small and medium-sized enterprises (SMEs), despite facing resource constraints and operational challenges, have unique advantages in pursuing sustainability. Their smaller, flatter organisational structures enable quicker decision-making and greater agility in implementing innovative solutions. Moreover, SMEs are often deeply ingrained in their local communities, creating stronger ties and enabling more sustainable sourcing practices. Despite the challenges they may encounter, SMEs stand to benefit immensely from embracing sustainability, both in terms of resilience and competitiveness.

Takeaways from the Sustainability in Practice Event

Earlier this month, ICAEW hosted a Sustainability in Practice event. The morning featured Cooper Parry’s sustainability journey and an insightful workshop on transition planning and capacity building. It also explored ESG as a service line and delved into funding options for sustainability initiatives. Here are the 5 key takeaways from this event:

  1. There is no change without action. A transition plan is a crucial tool that can help bridge the gap between commitment and action. Here are some resources by the Transition Plan Taskforce (TPT) to help you get started.
  2. Access to finance is a key barrier for 28% of smaller businesses. The British Business Bank offers support to help with some of the upfront costs.
  3. The journey towards sustainability is a continuous learning process. There will be times when things don’t go as planned, and that’s perfectly okay. The key is to remain transparent about these missteps and learn from them. See case studies and examples from other organisations.
  4. The integration of sustainability requires collective efforts from all teams within your organisation. Engaging clients and employees early in the process is crucial for success. You can identify ‘Sustainability Champions’ across your organisation to gain insights into how sustainability issues affect their specific work areas. This can help shape and enhance your overall sustainability strategy.
  5. Don’t let the pursuit of perfection hinder progress. Start your sustainability journey now. It will be easier to adapt when regulations become mandatory, and you’ll avoid missing out on opportunities. Even if you are not striving for B Corp certification, you can utilise the B Impact Assessment tool to help you benchmark where you are now and what you can do next.

Practical resources to help you get started