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How advisors can help clients address their impact on climate change

By Glen Foster, director, Small Business and Accounting Partners, Xero

With politicians, world leaders and media recently descending on Glasgow for COP26, and making headlines in the process, it’s no surprise that small business owners are feeling under more pressure than ever to go green. 

As a result, accountants – often the first port of call for advice on all types of business matters – are being called upon to help their clients tackle this pressing need, offering them counsel to enable them to make more sustainable decisions. 

Of course, accountants everywhere are eager to help SME clients go green, but the last couple of years have been incredibly turbulent. From Covid-19 recovery to the recent energy price hikes, many small businesses simply don’t know where to begin to become more eco-friendly.

With this in mind, I spoke with Scott Johnson, Founder of Kung Fu Accounting,  the world’s first ICAEW chartered accounting firm to be a certified B Corp, and Ian Jarvis Director of Vertis Accounting for some practical tips on how accountants can help their clients be more sustainable. 

1.  Start small before going big

It’s vital for advisors to introduce clients to changes and initiatives that are appropriate for their scale and size. Forcing them to adopt a full-blown ‘eco-warrior’ mindset before they’ve got started will likely discourage engagement. 

Most of the time, these changes can feel cumbersome to introduce and it’s important to show tangible benefits, no matter how incremental. The proverb ‘slow and steady wins the race’ could not be more appropriate.

Ian remarked that these changes can be beneficial to the bottom line, as well as the environment. “We believe it’s the right thing to do from an efficiency perspective and there is technology to enable it, too. We’re teaching our clients that for the same reasons. The environmental benefits are just the cherry on top.”

2. Paperless accounting for a paperless world

Gone are the days of accountants surrounded by sky-high piles of paper with ‘past due’ scrawled over them in red ink. Nowadays, it is much more financially and environmentally viable to ditch the A4. Tech is also more accessible than it ever was, opening up small businesses to more digital tools.

Scott commented that his entire accounting firm is paperless (aside from recycled toilet roll!), has second-hand furniture and uses 100% renewable energy. Ian explained that at Vertis, they use as little paper as possible. “We now have a digitalised job planning board and keep our client records in a digital practice management system. We don’t even own a filing cabinet!”

3. Have open conversations

Of course, it’s not always easy to introduce new ideas to clients – especially when they don’t want to challenge the status quo. But Ian admitted that he actually had to turn down a couple of clients because they did not want to work in a digital-first way. He suggested that education is key to tackling outdated mindsets and bringing accounting practices into the 21st century.

Finding out the specific needs of each client will make them more receptive to green-minded changes. According to Scott, many of KFA’s clients are taking notice of its ethical practices – showing interest in its ethical payslip scheme, for example.

4. More collaboration results in more innovation

For small business clients to go green, they’ll need the right support to make the transition less daunting. To Scott, this means removing ‘net zero’ as the complete objective for small businesses and encouraging collaboration across industries.

Scott has set up a dedicated network of accountants to help spread this message to small business clients. The Climate Conscious Accountants Network (C-CAN) is a network of 50+ accountants and tax advisors that provides a simple, 10-step plan accountants can follow to assess themselves and their clients on their climate impact. 

While COP26 gathered the great and the good, educating small businesses sadly didn’t feature too highly on the agenda. Thankfully, accountants can play a crucial role in supporting their clients on their journeys to going green. 

By Glen Foster, director, Small Business and Accounting Partners, Xero

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