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Accountancy profession takes next step towards net zero

Author: ICAEW Insights

Published: 25 Apr 2022

The new Net Zero Accountancy Initiative platform, launched by a coalition of accountancy profession organisations including ICAEW, offers a suite of tools to help accountancy firms achieve their net zero ambitions.

Net Zero Now, in collaboration with ICAEW, Sage (UK) Ltd, ACCA, AAT and the Good Business Charter, has developed The Net Zero Accountancy Initiative, an accountancy-specific climate action platform designed to make it easier and more cost-effective for firms of all sizes to take action on the climate crisis. 

The platform offers accountancy firms industry-specific guidance and tools to help them calculate their carbon emissions, set targets, receive tailored carbon reduction plans and compensate for unavoidable emissions. 

At the heart of the initiative is the Net Zero Accountancy Protocol, part of the Net Zero Now Certification Programme. This is a common standard for reaching net zero greenhouse gas emissions that has been peer reviewed by a broad base of stakeholders representing both the accountancy sector and sustainability and climate experts, and is aligned with international climate science.

Accountants who follow the protocol can either be certified net zero or have their net zero target date certified. Trusted certification marks allow firms to communicate their success to clients, employees and other stakeholders.

While the UK government has set a target of reducing greenhouse gas emissions to net zero by 2050, Net Zero Now estimates that accountancy practices in the UK are responsible for nearly half a million tonnes of greenhouse gas emissions every year, equivalent to the emissions of more than 100,000 cars being driven for a year. 

With many client companies now setting emissions targets to include required reductions in their supply chain, working towards net zero is increasingly important for all accountancy practices to attract business. 

At the same time, data also shows that a majority of younger employees consider a company’s social and environmental commitments before deciding where to work; according to Carbon Intelligence, 76% of millennials consider a company’s social and environmental commitments before deciding where to work.

However, 80% of all accountants in practice work for small or medium-sized firms and most of them regard the process of achieving net zero as expensive, time-consuming and complex, according to Broadway Initiative

Neil Ross Russell, Managing Director of Net Zero Now, said the accountancy profession had an enormous role to play in the transition of the economy to net zero, both through reducing its own emissions and in guiding its clients through their own sustainability accounting requirements. “Using the Net Zero Accountancy platform, it’s now simple and affordable for all accountancy practices to take action on their own greenhouse gas emissions.”

Richard Spencer, Director of Sustainability at ICAEW, said widespread change on net zero can only be achieved through collective action from business, government, NGOs and civil society. “Accountants can play a vital leadership role in this,” Spencer said. “At ICAEW we’ve already embarked on our decarbonisation journey and are here to support our members and firms by providing the necessary tools and guidance to do the same. We hope that the Net Zero Now Protocol will encourage our members to embark on their own net zero journeys.”

Pilots of the Net Zero Accountancy Initiative among firms including Grunberg and City of London accountancy firm Wilson Wright found that a sector-wide approach can be highly effective because many accountancy practices face the same challenges in achieving net zero. The pilots also found that it’s relatively simple for accountancy firms to achieve net zero, bearing in mind the key emissions sources for the profession are energy for offices, employee commuting and business travel, and IT equipment.

Jenny Herrera, CEO, Good Business Charter, said: “Tackling the climate crisis needs to be a collaborative effort including organisations of all sizes. The Good Business Charter is a deeply practical accreditation. We want to ensure our current and potential members, especially the smaller ones with fewer resources to work on this, are connected to effective ways they can meet net zero. We have a good number of professional services firms and we believe working on a protocol that takes their specific industry and sets out tangible ways to achieve net zero will be such a valuable tool.”

ICAEW member firms advise over 1 million businesses in the UK. This short film explains why addressing climate change is of such strategic importance to our members.

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