UK Accountancy Profession Takes Next Step Towards Net Zero

UK Accountancy Profession Takes Next Step Towards Net Zero

We are delighted to share that our partners at Net Zero Now have launched their first industry-wide protocol & certification to set standard for Net Zero, in collaboration with Sage, ICAEW, ACCA, AAT and our team at the Good Business Charter. This new digital platform helps accountancy practices go net zero cost-effectively. See below for more details, or go to www.netzeronow.org/accountants for free resources.

26  April 2022

The Net Zero Accountancy Initiative is being launched today by a coalition of industry partners, marking a major step forward in the accountancy profession’s journey toward Net Zero greenhouse gas emissions(1). The Initiative puts the tools for action on the climate crisis into the hands of accountancy practices. Today’s announcement includes: 

  • A profession-wide protocol that provides a clear and consistent path by which accountancy firms can reach Net Zero and a common standard against which they can be certified
  • A dedicated, sector-specific digital platform providing a complete solution for accountancy firms to calculate their carbon emissions, set targets, get tailored reduction plans, compensate for unavoidable emissions 

Trusted Certification Marks for firms to communicate their success to clients, employees, and other stakeholders.

Net Zero Now, the climate action platform, worked with Sage , the leader in accounting, financial, HR and payroll technology for small and mid-sized businesses, ICAEW, ACCA, AAT and the Good Business Charter to develop the Net Zero Accountancy Initiative. The Initiative makes it easier and more cost-effective for businesses of all sizes to take action on the climate crisis. 

The UK government has set a target of reducing greenhouse gas emissions to net zero by 2050(2). Net Zero Now estimates that accountancy practices in the UK are responsible for nearly half a million tonnes of greenhouse gas emissions every year(3), equivalent to the emissions of over 100,000 cars being driven for a year(4). While big firms can afford specialist sustainability advice, 80% of all accountants in practice work for a small or medium-sized firm(5) and the process of going Net Zero is seen by most SMEs as being expensive, time-consuming and complex(6). 

At the heart of the initiative is the Net Zero Accountancy protocol which provides an industry standard for reaching net zero greenhouse gas emissions, which sits alongside a Climate Action Toolkit providing useful guidance for practices on how to reduce emissions. These resources are freely available at www.netzeronow.org/accountants

Following a robust development process, the protocol has been peer reviewed by a broad base of stakeholders, representing the sector and sustainability and climate experts, and is aligned with international climate science. This means that for the first time there is cross-industry consensus on net zero for the accountancy sector. Accountants who follow the protocol can either be certified Net Zero or have their Net Zero target date certified. 

With many client companies now setting emissions targets to include required reductions in their supply chain(7), working towards Net Zero is increasingly important for all accountancy practices to attract business. Data also shows that a majority of younger employees consider a company’s social and environmental commitments before deciding where to work(8), making Net Zero a critical recruitment tool. A pilot of the Initiative from November 2021 to January 2022(9), with firms including Grunberg and GBC Accredited Wilson Wright, found that: 

  • Compared to other sectors with a more complex carbon footprint, it’s relatively simple for accountancy firms to get to net zero
  • There is consistency across accountancy practices in the challenges they face going net zero, so a sector wide approach can be highly effective 
  • The key emissions sources for the profession are energy for offices, employee commuting and business travel and IT equipment 

 

Neil Ross Russell, Managing Director of Net Zero Now, said:

“The accountancy profession has an enormous role to play in the transition of our 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. Developed in partnership with the industry, and underpinned by global climate science, the Net Zero Accountancy Initiative can transform the sector’s response to the climate crisis, delivering a host of business benefits along the way.”  

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, and accountants can play a vital leadership role in this. 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.”

Glenn Collins, Head of Policy, Technical & Strategic Engagement of ACCA said:

“Achieving net zero needs careful and consistent measurement, accounting, reporting and verification – and accountants’ skills are vital to realising all this. ACCA has supported the protocol development to help practitioners on their journey.

As a professional body with our own commitments to the UN SDGs – including achieving net zero – we know that our members are committed to contributing solutions in the public interest and achieving climate change targets. Being part of this prominent steering group will ensure a consistent and co-ordinated approach as reaching net zero cannot be done in silos – it needs integrated thinking, expertise and action.”

Adam Williamson, Head of Responsible Business and Policy, AAT (Association of Accounting Technicians), said:

“Climate change is one of the biggest issues facing the world today and we all have a role in driving the effort to achieve net zero – both as individuals and organisations. AAT works closely with partners such as The Prince of Wales’s Accounting for Sustainability Project (A4S) Accounting Bodies Network to raise awareness and provide guidance. From an organisational perspective AAT are moving to a new energy efficient building in Canary Wharf this spring, and will continue our efforts to encourage government to take further action to reach the net zero goal.

We are also working closely with our members to help them to engage in this crucial collective effort, which we know can seem daunting to many small businesses. The Net Zero Now Protocol provides an affordable, practical route for SMEs to achieve this, and we would encourage our members to explore the free Protocol and Climate Action Playbook and how they can help them to reach their net zero goals.”

Paul Struthers, Managing Director, UK & Ireland at Sage, said:

“Sage is showing up and standing with the millions of small and medium size businesses we serve around the world by tackling the big challenges of our time. We want to create partnerships that help knock down the barriers businesses face to operate in a more sustainable way. We know through our partnership with Net Zero Now we are helping practices gain access to great insight and support that will enable them to start their sustainability journey, using technology and insight to drive forward their net zero ambitions.”

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.”

 

Footnotes 

  1. Deloitte defines net zero as: ‘Essentially, we reach net zero when the amount of carbon dioxide we add is no more than the amount taken away. These goals guide us to significantly reduce our absolute emissions and find ways to sequester any residual carbon emissions – so there’s no net increase in CO2’.  According to the Science-Based Targets Initiative (SBTi)  to reach a state of net zero emissions for companies implies two conditions:
    a.     To achieve a scale of value-chain emission reductions consistent with the depth of abatement achieved in pathways that limit warming to 1.5°C with no or limited overshoot and;
    b. To neutralise the impact of any source of residual emissions that remains unfeasible to be eliminated by permanently removing an equivalent amount of atmospheric carbon dioxide.
  2. UK enshrines new target in law to slash emissions by 78% by 2035 – GOV.UK (www.gov.uk)
  3. Net Zero Now Accountancy Initiative 
  4. Greenhouse Gas Equivalencies Calculator | US EPA
  5. Net Zero Now Accountancy Initiative 
  6. Broadway Initiative SMALL BUSINESS ADVICE ON NET ZERO, April 2021
  7. Of the 239 companies that signed up to the Science Based Targets Initiative in 2020, 94 percent included commitments to reduce supplier emissions (McKinsey & Co, June 21) 
  8. 76% of millennials consider a company’s social and environmental commitments before deciding where to work, (Carbon Intelligence, Oct 19)
  9. Net Zero Accountancy Initiative pilot data is available on request. 

 

For more information, please contact: 

 

  • Laura Cooney, AAT 0207 397 3912 or laura.cooney@aat.org.uk / prteam@aat.org.uk

 

 

About the initiative partners 

Net Zero Now is a sector-based climate action platform that collaborates with industry experts to define what net zero means for different sectors, offers businesses within the sector guidance and tools on how to get there and provides a standard against which businesses that want to claim net zero can be certified. Visit www.netzeronow.org or follow us on Twitter or find us on LinkedIn.  

About ICAEW

Chartered accountants are talented, ethical and committed professionals. There are more than 1.8m chartered accountants and students around the world, and more than 186,500 of them are members and students of ICAEW. ICAEW promotes inclusivity, diversity and fairness. We attract talented individuals and give them the skills and values they need to build resilient businesses, economies and societies, while ensuring our planet’s resources are managed sustainably.

Founded in 1880, we have a long history of serving the public interest and we continue to work with governments, regulators and business leaders around the world. We are proud to be part of Chartered Accountants Worldwide, a global network of 750,000 members across 190 countries, which promotes the expertise and skills of chartered accountants on a global basis. We believe that chartered accountancy can be a force for positive change. By sharing our insight, expertise and understanding we can help to create strong economies and a sustainable future for all.

About AAT

AAT (Association of Accounting Technicians) is the UK’s leading qualification and professional body for technical accountants and bookkeepers, and has around 130,000 members in over 100 countries. We have been helping people enter and develop their skills within the accounting sector for the past 40 years.

We offer a range of qualifications that are open to all regardless of previous education or age, such as the AAT Accounting Qualifications that provide a non-degree route into chartered accountancy, and the AAT Bookkeeping Qualifications that can support business growth through accurate and up-to-date financial records. Students encompass a wide range from school and college leavers, to older people hoping to change their career or learn the skills to run their own business. 

An AAT Accountant is a qualified accounting professional with the practical and technical skills needed to support businesses with their accounting activities. Typical job roles of an AAT Accountant include: Financial Accountant, Commercial Analyst, Senior Finance Officer, Payroll Manager, VAT Accountant and Tax Supervisor. An AAT Accountant in the UK can sign off the accounts for small companies that meet two out of three of the criteria of turnover less than £10.2 million, total assets less than £5.1 million and less than 50 employees. Currently over half a million businesses trust AAT Accountants and AAT Bookkeepers to service their accounting requirements.

AAT awards around 80% of all technical qualifications in accounting in the UK, and generous exemptions are provided by many of the senior UK bodies including ACCA, CIPFA, ICAEW, CIMA and ICAS. As part of our ongoing commitment to service excellence, we’re proud to be a member of the Institute of Customer Service, the independent professional body for customer service.

AAT’s qualifications are internationally respected. AAT works hard to raise the profile of accounting technicians worldwide and their role in building stronger economies. Globally, in select economies, AAT plays a role in establishing, maintaining and raising professional standards of accountancy practice. See our international page for more information about options for international students.

About Sage

Sage exists to knock down barriers so everyone can thrive, starting with the millions of small- and mid-sized businesses served by us, our partners and accountants. Customers trust our finance, HR and payroll software to make work and money flow. By digitising business processes and relationships with customers, suppliers, employees, banks and governments, our digital network connects SMBs, removing friction and delivering insights. Knocking down barriers also means we use our time, technology, and experience to tackle digital inequality, economic inequality and the climate crisis. Learn more at www.sage.com/en-gb/