How to help your clients reduce carbon emissions

Accountancy has a big part to play in achieving zero carbon, and it’s time for AAT members to be proactive with helping clients and employers understand how.

The UK was the first major economy in the world to pass a law to end its contribution to global warming by 2050. The target will require the UK to bring all greenhouse gas emissions to net zero by 2050, compared with the previous goal of at least an 80% reduction from 1990 levels.

The water industry has subsequently committed to net zero by 2030, the farming industry by 2040 and an increasing number of individual businesses, including some surprising candidates such as British Airways (2050) and British Gas (2030), have made similar commitments.

Accountancy and net zero

As different businesses and different sectors increasingly commit to their own targets, it’s reasonable to ask what the accountancy sector is doing. While there is no industry-wide agreement, individual organisations are busily establishing their approach to reaching net zero and AAT is no different.

In September, AAT surveyed its Assembly and Council members, as well as AAT Licensed Accountants, on the issue. 100% of AAT Council and Assembly members think it’s important, as do 88% of AAT Licensed Accountants.

There aren’t many issues that can achieve such high levels of agreement.

The survey also revealed that most licensed accountants only had a limited understanding of this issue at the time, and therefore hadn’t advised their clients on how to reduce their carbon emissions. However, the vast majority added that they would like to do so in the future.

Getting started with carbon emission reduction

The starting point for any business must be to establish and understand what their current carbon footprint is before setting out how to go about reducing it.

Fortunately, there are a range of free tools and guides that can help businesses do this. For example, the Government-backed Carbon Trust offers a free Carbon Calculator for small and medium-sized companies.

The Trust has also published a Climate Leadership Framework which helps senior management:

• understand how their company is currently performing on climate change
• identify the opportunities for measurable improvements via a low carbon roadmap
• guide their strategic planning.

Strategy for reducing

Once the level of challenge has been accurately identified, setting out a strategy to reduce carbon emissions, including specific targets, is vital.

Again, help, advice and guidance in this area is available from independent organisations like the Energy Saving Trust or Business Link and increasingly on AAT’s very own Informi platform for start-ups and small businesses.

Ongoing measurement and reporting

Over specific periods, e.g. monthly, quarterly, or annually, businesses should compare emissions to their base year. It’s a good idea to internally report progress regularly to encourage staff involvement and ownership. Achievements and milestones should also be communicated to clients and stakeholders.

In summary

The path towards net zero may not be easy but it presents numerous opportunities to:

• develop new services
• create new business models
• save money
• dramatically enhance images and reputations.

Bank of England Governor Mark Carney bluntly, but correctly, said: “Firms that align their business models to the transition to a net zero world will be rewarded handsomely. Those that fail to adapt will cease to exist. The longer that meaningful adjustment is delayed, the greater the disruption will be.” 

Read more from AAT Comment;

• Business ethics: why it makes a difference
• How to create a greener accountancy practice
• Industries on the rise that you should be targetting

Phil Hall is AAT's Head of Public Affairs and Public Policy.