Chartered Stars keep on rising: Mariee Payne
24 November 2020: Mariee Payne, an audit senior at Mazars and one of the winners of ICAEW’s Chartered Star competition, shares her views on auditor responsibilities, the consequence of climate change, and the benefits of being proactive.
Mariee Payne is an audit senior at Mazars in Poole, having joined as a school leaver three years ago. She is one of two ACA students selected to represent ICAEW at the One Young World Summit in Munich next year, seeing off competition from over 40 candidates to win the Chartered Star, an annual contest that decides which students or members will represent ICAEW at the summit.
Last year’s One Young World summit took place in London with several high-profile guests in attendance, including Mayor of London Sadiq Khan and the Duchess of Sussex Meghan Markle. ICAEW was represented by six ambassadors, who joined 2,000 young people working towards accelerating positive change.
Entrants to ICAEW’s competition had to submit a video on one of the five plenary themes of the summit, outlining how the accountancy profession could play its part in tackling some of the most pressing global challenges. Here she expands on some of the answers from her video
ICAEW Insights: With an auditor's responsibilities ever increasing, how do we assess just how much responsibility an auditor has when assessing a businesses’ approach to climate change. As professional accountants, do we have a duty to be taking the lead in striving for change?
Mariee Payne: First things first, I believe that environmental and climate change training needs to be incorporated into all members’ continuing professional development. Without ensuring members have a good understanding of how to recognise what potential climate issues a business faces, how can we possibly help?
This is more than simply encouraging detailed accounts disclosures, although this is important too. There are several climate-related risks which end up affecting multiple ISAs.
‘Does climate change impact on an entity’s ability to continue as a going concern’ is one of the most important. Each year there are more and more extreme weather events – just because they’re not necessarily happening in England doesn’t mean it doesn’t impact UK businesses. We need to consider where suppliers’ factories are located and whether they have a sub or parent company in another country which could be impacted. If they are reliant on support from a parent to continue as a going concern, but the parent is in a high-risk hurricane area which we know has hit other businesses, then how much value can we place on the reliance?
As auditors, we can ensure our clients are ahead of the game when it comes to climate change. We can achieve this by ensuring they are working within the ever-changing regulations, foreseeing carbon pricing and areas of business which may have a greater climate impact. Utilising these strategies, we can ensure that companies are ready for when inevitably climate taxes become a standard.
ICAEW Insights: Government regulations, market uncertainty, globalisation, cybersecurity: these are all known as some of the biggest issues a business will face today. Can we rank climate change alongside these issues, or should it pervade most things?
Mariee Payne: A business today faces so many issues it has to overcome to succeed. Yet, when you look at some of the biggest reports which address business issues, climate change is nowhere to be found. This is implausible when you consider the consequences of climate change if no action is taken, with businesses being some of the worst affected.
In 2018, UK businesses had imports from Vietnam worth $6bn and this has only increased since. South Vietnam will be underwater by 2050 if sea levels keep rising at the current rate. Just think how many businesses this one thing alone will impact.
But that doesn’t necessarily mean that climate change should be considered separately to all other factors when a business prepares a risk assessment. It pervades most currently considered risks. These simply need to be expanded to ensure that climate change is considered as part of each, as well as ensuring companies can highlight that they are making a conscious effort towards their impact on climate change and that it’s not just a bi-product of their assessments.
It goes without saying that with governments making promises each year, hopefully they will follow these through with new regulations, and companies need to be prepared to change and adapt to this. A key example is the ban on petrol and diesel cars, especially now that the government is bringing this forward to 2030. This means automotive companies will be required to invest into research and development into more sustainable vehicles, which could be taken a step further looking into recycling components or materials to ensure the whole production cycle can be improved.
As with every aspect of business, this will require a large-scale change to succeed. If we can change our mindsets and get the ball rolling with smaller and more achievable changes across the board it will soon be adopted to become a way of life. And then, if we can invest in new strategies and better protocols, we can drive down the cost of greener processes making them more captivating for all sizes of business.
ICAEW Insights: Investor’s demands or political agenda: are you as a member of the board standing up and being counted, or simply leaving it to someone else?
Mariee Payne: When it comes to an organisation’s corporate responsibility, and more specifically their response to climate change, they are divided into two main trends. Those who have a more proactive approach and who strive to do better, and those who have a more reactive approach and only make changes when it becomes law to do so.
And I can understand that sometimes it’s easier to do the bare minimum, it can be expensive to make changes, and the issue with making changes now is that we won’t see any difference for a long time and it’s hard to physically see the effects of the decisions you make. But for those companies who are responding, and who are implementing positive changes across the business, they can know that they are doing their bit to help save the planet in the future.
There are also other benefits to adopting a proactive response. Right now, there are recommended voluntary disclosures that a company has to make. But the government is under immense pressure to increase this, and implementing better disclosures now means that if it ever becomes mandatory you are a step ahead of all those who didn’t.
It’s also likely you’ll attract a whole new consumer – the environmentally-conscious consumer who appreciates companies' openness and transparency. It also means better financial resilience, investor attractiveness and finding potential to supply climate-related products and services.
With more and more companies putting initiates in place, you risk falling behind unless you do the same.
A good example of this is Royal Dutch Shell preparing for "net-zero" emissions by 2050. To help achieve this, they have a global restructuring review in place. They aim to be a world-leading supplier of electricity through renewable energy.
Some may think they are only doing this because oil is running out, but I would like to think the Board of Directors are finally waking up to the fact that they can't keep taking precious resources from the planet but want to give something back in the form of renewables.
This means other large energy companies now need to decide whether they follow this approach.
For large companies with a Board of Directors, it needs to be ensured that there is knowledge of climate change across the board and that this knowledge is strong enough so that they can challenge management’s assessments of climate-related risks, as well as being able to perform their own.
Strong knowledge of climate change not only helps address risks but means that they can take advantage of climate-related opportunities including spurring up new and exciting products and services (which are less carbon-intensive) as well as increasing energy efficiency, which has a by-product of reducing costs.
- Find out more about ICAEW’s 2021 Chartered Starts here.
- One Young World: How do ACA students want to change the world?