‘Ahead of the curve’: are accountancy firms on track to become more sustainable?

How and when did the Net Zero Accountancy Initiative start?

We developed what we call Net Zero protocols, in a number of different sectors, with the idea of rolling them out to the new sectors every single year and helping more and more companies. One of the very first sectors that we wanted to work in was accountancy because it can play such a big role in helping companies to be more sustainable and help advise on these matters. We were able to start talking with ICAEW, ACCA, AAT so we created a steering committee to help develop the Net Zero Accountancy Initiative. With the committee we talked about each of the four main components an accountancy firm has to include in their carbon footprint in order for it to be accurate and credible: there’s the carbon calculation stage, the reduction targets, the actions that need to be taken, and the communication elements. We started in October or maybe September 2021 and we spent a good seven or eight months or more building the protocol. And then we officially launched the initiative in May/June 2022. 

Can you tell us more about the ‘On the Road to Net Zero’ certification? What specific criteria and benchmarks do accountancy firms have to meet to receive it?

The On the Road to Net Zero certification is really just for companies that demonstrate their commitment to taking climate action, as long as they have calculated their carbon footprint is in line with the protocol, and as long as they commit to the reductions targets for that industry. For instance, accountancy firms have to commit to reducing their scope one and two emissions by 50% by 2030, and then reducing all of their emissions, including scope three, by 30% over five years — those are the near term targets. As long as they calculate in accordance with the protocol committed to these targets, and are committed to being transparent about their data and their emissions, then we can then certify them as on the road to net zero. 

Can you walk us through the tools Net Zero Now provides for accountancy firms? 

We have an online platform that companies can use that mirrors the protocol and helps them to add all the relevant data for their organisation — things like their energy, usage, data, wastewater, even things like procurement, what they are spending on services and what kind of IT products they are purchasing. They can simply add it to the platform and it gives them their co2 emissions in real time. Once all of the data is added to the platform, then it’s reviewed thoroughly by our climate team. They will ask for any evidence to make sure that it’s correct and if they’re happy with it they’ll validate it and then we can work directly with those companies to move through to the reduction targets and the certification step. 

What are some of the common themes and actions that accountancy firms are taking to achieve their emissions reduction targets?

There’s a huge variety and it’s tailored to their data. For accountancy, business travel tends to be an area which we look at quite a lot because there could be companies deciding to take more flights than they necessarily need to and sometimes flying business class rather than economy. And then there’s also a big difference geographically based on where the firms are located. So city based accountancy firms tend to benefit from public transport, which will help lower their emissions, whereas more rural ones have staff who drive to get to work, and for those ones we look at other ways to reduce their emissions such as ride shares or cycle to work schemes for example. 

Energy usage is obviously another big area, considering they can account for anywhere from 10% to 30%. We work with them to find renewable providers or sometimes even move their offices to buildings which don’t use gas. 

What role do accountancy firms play in achieving net zero?

I’ve always felt that they play a really central role. Carbon reporting actually could quite naturally fall into the remit of an accountant, it’s an extra tool that they can have available to help their clients. Because it’s not only just doing their own carbon accounting each year, but then providing advice on how they can reduce their emissions. And obviously by tackling emissions they can also save costs on their overheads, travel budgets, procurement practices and so on. All this knowledge can be applied to their clients, so I think the role of accountants will be central to helping the UK to achieve net zero. 

What types of accountancy firms have joined the initiative so far?

It’s more than 30 and we currently work with 10 of the top 100 firms. So we’ve had a really great response from the sector in that respect. But we’ve also got a huge variety of other firms, such as SMEs, which is good because we primarily design the initiatives to help all types of companies to go down this route. So it wasn’t just about focusing on large companies, we wanted something for everybody. But what we are seeing is a huge amount of interest and increasingly more numbers joining us over the last few months.

Why do you think there’s been an increase in recent months? 

I think a lot of companies can see that they’re going to be required to do this down the line. So I think part of the reason we’re getting a lot more uptake now is because they want to try and get ahead of the curve, and really benefit from going through this kind of process and activity before it becomes mandatory for a lot of companies. 

The other thing is, as we’ve had more companies joining, we always try to talk about and celebrate the companies who are going through this initiative, and that naturally sparks interest and brings other people to us who want to be on board and do the same thing. We are in this sort of early adopter stage and most of the companies that we work with they’re doing this also because they care and they want to have an impact not just for their clients, but for their staff too. 

Does Net Zero Now employ any particular strategies to encourage accountancy firms to join the initiative?

Typically they come to us. For example ICAEW will ask us to come to events so we try to speak to companies when we can. But more than anything from the training element, where they can see what the challenges that accountants face are and make sure that they understand that actually they can have an impact and make a difference. And obviously now, we did an update of the first year since the launch of the initiative and that’s gained a huge amount of traction too; we’ve had a lot of companies coming to us to find out more off the back of that. 

What advice would you give to an accountancy firm willing to become more sustainable?

When we talk to some firms, the question they frequently ask is ‘what difference can we really make?’ and ‘why should we do this?’ and I think they can be scared to change straight away. I think what companies have to realise is that we’re not looking for overnight changes, we’re not saying that they’re going to be able to become the most sustainable accountancy firm within their first year. The targets and what we’re aiming to work with companies on now is potentially over the next five to 20+ years, so it’s kind of a change in development as the whole country and the world changes and adapts to become more sustainable. 

So the number one advice really is just to get started, and not be worried about what that really means or what the changes might be, because actually it’s baby steps. This isn’t just radical change overnight, it’s a process and it’s better just to get that underway now.