ESG accounting practices accountants should know
April 22, 2022
ESG accounting practices are coming in to sharp focus, driven by climate change legislation to deliver net-zero. The 2050 deadline agreed by the 193 countries that are signed up to the Paris agreement is already impacting larger multi-national corporations who are changing the way they operate. SMEs and the supply chain eco-system are next to feel this change. This “trickle-down” effect means that it is no longer just affecting the Big Four.
Neil Johnson, a freelance journalist, recently covered the subject in an article on the ACCA website here, where he interviewed Kreston Global member, Kreston Reeves, on their journey to net-zero. They commented,
“There is evidence from many businesses, including Kreston Reeves, that by becoming carbon neutral (or aiming for net-zero) can be hugely beneficial. For example, this can be a big attraction for new candidates/employees to join the business. In addition, it can help improve retention rates of staff if an employer can demonstrate strong social responsibility practices,” said Corporate Partner James Peach and audit senior Dan Firmager.
An accountancy practice’s client base is a great audience with which to share a net-zero story, in the hope that it will resonate with some and may lead to action from others to help support climate action.
Internally, it can be galvanising tool that strengthens and enforces company culture.
Kreston Reeves continues to focus on reducing carbon to work towards the more stringent goal of net-zero. “We are very keen to focus more on our carbon output and to minimise this as far as possible. This is part of our assessment of net-zero and how we can achieve this. It is important that every business or individual does not become complacent and simply rely on the ability to offset whatever CO2 is emitted. The more than can be done to reduce emissions, the better result for the environment and for our future
generations,” said corporate partner James Peach and audit senior Dan Firmager.
There are online carbon calculators for businesses, such as this from the Carbon
Trust: https://www.carbontrust.com/resources/sme-carbon-footprint-calculator or the government’s MacKay carbon calculator: https://www.gov.uk/guidance/carbon-calculator.