In an era where environmental concerns are taking centre stage, businesses are under increasing pressure to become greener and reduce their carbon footprint. Many forward-thinking companies despite recognising that being environmentally responsible is a priority for future generations, unfortunately place profitability and resilience as higher motives. The need for UK business owners to become greener and unite in combatting and reducing carbon emissions, is as crucial as ever and placing this precedence over personal gain and societal expectations.
An increasing number of businesses are taking the decision to only engage with businesses that align with their sustainability priorities and strategies. According to a recent Deloitte report, an estimated 46% of businesses have begun requiring partners across supply/value chains to meet specific sustainability criteria. This shift towards sustainability and becoming greener has led to a growing reliance on advisory services. Accountants and sustainability experts now play a pivotal role in guiding businesses towards greener practices.
We explain the role of advisory in helping businesses to become greener, and how digital accounting can pave the way to net zero…
The Role of Accountants and Advisors in Green Transformation
Gone are the days when accountants and advisors are solely responsible for managing financial statements and tax compliance. Their expertise is now being sought after to navigate the complex landscape of sustainability and environmental stewardship. This is something we’re incredibly passionate about at Nordens, leading us to extend our service offering to include environmental social guidance (ESG).
Our Strategic Advisory division work with business owners to offer invaluable insights into the financial implications of greener initiatives. This helps businesses understand how eco-friendly measures can impact their bottom line and put these practices into action. We even offer a complimentary consultation with our Director of Strategic Advisory, Joe Sword, where we can discuss your options around sustainability in your company, as well as the personal and professional goals you wish to make a reality.
Some of the roles, but not limited to, that our advisors can support businesses in becoming greener include:
Assessment & Strategy
Accountants and advisors, like ourselves, work closely with businesses to assess their current operations and identify areas for improvement. We help develop comprehensive sustainability strategies that align with the organisation’s goals while considering environmental impacts.
Sustainability initiatives often involve upfront costs and long-term benefits. We can assist in conducting financial analyses to determine the feasibility and potential returns on investment for eco-friendly projects.
Environmental regulations are evolving rapidly, not least the requirement for large and medium-sized companies (measured by reference to turnover, balance sheet total and number of employees) to publish an annual strategic report. The report must set out information on various ESG-related items. These include the impact of the business on the environment; disclosures around the company’s employees; social, community and human rights issues; and the company’s policies in relation to each of those matters.
Our advisors can help companies navigate these changes, ensuring compliance and mitigating potential risks associated with non-compliance or negative environmental impacts.
Data Management & Reporting
Accountants assist in collecting, analysing, and managing sustainability-related data. Accurate data collection is essential for creating credible sustainability reports and for setting achievable goals toward becoming greener.
Integration Of Sustainability In Decision-Making
Accountants and advisors aid in integrating sustainability considerations into overall business strategies. This ensures that eco-friendly practices become an integral part of the decision-making process across all departments.
Digital Accounting in Sustainability Reporting and Roadmaps to Net Zero
The digital revolution has significantly impacted the field of accounting, and sustainability reporting is no exception. Digital accounting tools, such as cloud-based platforms like Xero, have become instrumental in streamlining sustainability reporting and facilitating the journey to net-zero emissions.
Efficient Data Collection & Analysis
Digital platforms enable businesses to collect and process large volumes of sustainability data efficiently. This data can include energy consumption, waste generation, and carbon emissions. Such platforms help in identifying trends and areas where improvements can be made.
Traditional sustainability reporting used to be an annual affair, but digital accounting allows for real-time reporting. This enables businesses to monitor progress continuously and make adjustments as needed to stay on track with their sustainability goals.
Integration With Financial Data
Digital accounting platforms can integrate sustainability data with financial data. This integration provides a holistic view of the financial implications of sustainability initiatives and helps in making informed decisions.
Digital platforms make it easier to share sustainability reports with stakeholders, including investors, customers, and regulators. This transparency enhances credibility and demonstrates a commitment to sustainability.
Roadmaps to Net Zero and the Growing Need for Advisory
The concept of achieving net-zero emissions has gained traction as a critical goal for businesses and nations alike. A net-zero roadmap involves identifying emissions sources, setting reduction targets, and implementing strategies to offset or mitigate the remaining emissions. This complex process requires a deep understanding of both sustainability and financial considerations.
As businesses aim for net zero, the need for advisory services becomes even more pronounced:
Navigating Complex Regulations
Achieving net zero involves compliance with intricate environmental regulations. Advisors help companies navigate these regulations and design strategies that align with both environmental goals and financial constraints.
Identifying Low-Carbon Opportunities
Advisors assist in identifying low-carbon technologies, processes, and energy sources that can facilitate emissions reductions. They evaluate the costs and benefits of each option, ensuring that investments contribute to long-term sustainability.
Financial Modelling & Risk Assessment
Achieving net zero requires substantial investments. Accountants and advisors use financial modelling to assess the economic feasibility of these investments and to mitigate potential risks.
Continuous Monitoring & Reporting
Net-zero commitments are long-term endeavours. Advisors help businesses set up systems for continuous monitoring, reporting, and adjustment to ensure that emission reduction targets are met.
Nordens’ Chief Sustainability Officer, Steven Brewer, believes, “As business owners, it’s crucial that we consider the future in our decision-making and proactively stay ahead of the competition. Taking the first step can often be the most challenging, but starting can be as simple as blocking out focused time in your calendar and scheduling a call with your advisor.
“During the initial stages, it’s essential to identify individuals within your team who are enthusiastic about joining your sustainability task force. Look for those who have a passion for leading or contributing to the team that will drive this agenda forward. Research shows that working collaboratively as a team significantly increases our chances of success compared to working independently. From my personal experience, I’ve found it quite enjoyable to uncover weaknesses or potential threats through a fresh perspective. This process can even lead to enhancements in your current offerings.”
In conclusion, businesses are increasingly recognising the importance of sustainability, not just for the environment but also for their bottom line. Accountants and advisory can play a crucial role in this transition to a greener future, providing guidance on sustainable strategies, financial implications, and compliance.
Digital accounting platforms, such as Xero, facilitate efficient data management and reporting, making the journey towards net zero more achievable. As the world moves towards a greener future, businesses are increasingly turning towards advisory services to ensure effective cutting of carbon emissions whilst embracing sustainability in a holistic manner.
We hope this has outlined to you how strategic advisors can help businesses transform their sustainability endeavours and become greener. If you’d like to know any further information, or anything accounting-related, please do not hesitate to get in contact with us at Nordens, where one of our trusted advisors would be happy to talk you through your query.