How The Big Four are embedding their ESG practices

Environmental, Social and Governance encompasses a huge range of considerations that change with the times. Here, two UK leaders explain some of the thinking that’s driving their agenda.

The Big 4 are grappling with seismic changes to economic norms, social change, working patterns and sustainability regulations. We spoke to two leaders in the space about the priorities and challenges the world’s biggest accounting firms face in the Environmental, Social and Governance (ESG) space. The conversation largely focused on the E and S in ESG.

Gavin Harrison, Director/Head of Sustainability at Deloitte UK, and North & South Europe

Short-term, easy wins

In this near-term phase, up to the next five years, I think everyone has similar issues: it’s about operational efficiency to reduce your emissions and improve your energy efficiency. It’s bread and butter stuff, and you don’t need crazy innovation or huge behavioural change to achieve it. You can just make the right decisions. And we’ve been doing that since about 2010 when we launched Green Journey. And we’ve reduced our emissions by 76% operationally over the last five years.

Long-term, broad approach

But then pretty soon, you run out of efficiencies to be gained, and you have to quickly work on systems change and how you support that to get to that next level. Take business travel: it has long been at the heart of professional services, we travel a lot to meet our clients because face-to-face time is super important as you can get the best out of people if you’re collaborating live. We’ve reduced emissions 55% per head since 2019, it’s come down a lot, and we’ve got plans to reduce them further, but we don’t want to stop travel, and we still want face time.

And so if I’m ever going to get to net zero in Deloitte, we need the aviation sector to transform at the same rate that we are transforming. And we use our skills and our network and how we can support that conversation and support their innovation to help them get to that level. And that’s really quite a big step change in how we treat sustainability.

Collaboration is key

When it comes to a direct conversation with a client, one of the big things we’re currently pushing is the concept of ‘sustainable delivery’. We tend to have quite a FaceTime culture with how we deliver services, which is wonderful. And so we say, “Right, if you want to move to a future operating model where we use much more digital delivery, which we have in the last five years, but we’ll continue that”. Then it’s about talking to that client, and saying, “You’ve got a net zero agenda, we’ve got a net zero agenda, how can we work together to help drive this forward?”

One way we can do that is to think about the emissions associated with our delivery of this contract. It’s good for you because it reduces your supply chain emissions, it’s good for us because it’s reduced our business travel emissions.

How can we collaborate on this, learn from what we’re both doing, and also, how we can still effectively deliver high standards of quality without extending those emissions; and then how can we share that good practice across your teams, across our teams, so we can both then learn and continue to develop.

Emma O’Malley, Head of ESG Corporate Reporting at KPMG UK

Focus on your USP

There are two camps of what we do on ESG: there’s the regulated part, and that is the bare minimum. That’s what we are required to do and it forms part of our license to operate. Then there are the extra bits that go beyond regulation.

So, if you look at our community strategy, it’s around where we think and where we feel we have got the skills as a business to make the most difference. We don’t take a scattergun approach, and we don’t support every good cause that’s out there.

We try to be strategic about what skills we have as a business, and then look at what we can bring to the table that perhaps other businesses can’t, and use that as the basis of the direction that we push our strategy in.

The campaign we founded with the charity National Numeracy to create the only day in the UK that focuses on improving people’s competence and confidence with numbers is an example. That cause was very, very core to us; it’s about strong numeracy skills, it’s about confidence with numeracy. And we could see that we had a role to play in improving that in the UK.

Prove it

We’ve got strong governance around Environment in ESG, so the challenge comes with making sure that everybody in the organisation is happy that it’s the right thing to do. One thing we’re very conscious of not doing is greenwashing; that, and avoiding setting strategies and commitments without a strong sense of how we’re going to achieve them.

We’ve got strong rationale behind why we’re proposing things, and that is data-backed. We know that we’re not putting something out there and hoping that we’ll figure out how to achieve it in the future. We’ve got people here who are very data-driven, who’ve got insurance backgrounds for instance, so that need for rigour comes with the nature of the sector that we work in.

Christian Doherty is a business journalist and freelance writer for AAT.