The accountant’s role in business sustainability
Over the last decade, business sustainability has become more than just a buzzword. A sustainability policy is concerned with making a business more resilient and sustainability needs to be measured, reported and assured. Accountants' skills make them ideally placed to contribute to an organisation’s sustainability efforts.
Why sustainability is a top priority for clients
Business sustainability can be described as responsible business growth; not only in making decisions with the long-term financial future of the business in mind; but also ones that are designed to protect the natural environment and that seek to make a positive impact in the social, cultural and economic environment.
Evidence suggests that customers are increasingly drawn to businesses that take sustainability seriously. Taking a sustainable approach can also help companies to reduce overheads, increase efficiency - and thereby boost profits.
How do accountants have a role to play in this?
ICAS has produced a summary of eight practical tips to help accountants tackle sustainability related issues. Some additional ways in which accountants can help businesses become more sustainable are detailed below.
1. Putting the business case for sustainability to stakeholders
In the short term, a shift towards more sustainable policies might mean a bigger outlay and a hit on profits. If this is also going to have a negative effect on shareholder dividends, companies may struggle to secure stakeholder buy-in to the idea.
An accountant can help organisations make the business case for investing in such policies. In many situations, this might involve long-term viability reporting; helping stakeholders look beyond the short-term costs associated with adopting these policies and realising the longer-term benefits.
2. Reporting and disclosure
Sustainability policies can bring reputational benefits to companies. If, however, those companies are perceived to have made misleading statements and giving the wrong impression about their position, this can have significant adverse consequences for the reputation of the company in question.
Accountants can help organisations present a transparent, accurate and verifiable picture of their sustainability efforts. A policy is only credible if the sums add up - so accountants should be seen as a natural port of call to ensure this is the case.
3. Identifying opportunities
Line-by-line budget analysis might reveal specific areas where greater efficiencies might be possible within an organisation. Especially in areas such as saving fuel and running more environmentally friendly offices, those efficiencies might tie in neatly with a wider commitment to sustainability. In areas such as life cycle costing of proposed new capital assets, accountants can also help businesses integrate sustainability into the decision-making process.
4. Partnership arrangements
A key part of a typical business sustainability policy tends to involve looking at the attitudes and practices of the third parties you work with. Do these potential partners share our values? Can they demonstrate a similar commitment to corporate social responsibility? By demonstrating a commitment to best practice, accountancy firms can help to position themselves as a ‘natural choice’ for potential clients looking to do business with ethical service providers.
So as well as being well placed to help their clients develop meaningful sustainability policies, by adopting such policies themselves, accountancy firms may be able to enhance their own value proposition in the eyes of potential clients.
Bluefin Professions is the specialist professional indemnity division of Bluefin, one of the UK’s largest, but more importantly market leading insurance brokers.
About the author
Lorraine heads up the Edinburgh branch of Bluefin’s specialists professional indemnity insurance (PII) division, Bluefin Professions. She has more than 20 years experience and is an expert in the placement of accountants’ PII.
About the company
Bluefin Professions is a specialist team at Bluefin Insurance Services offering insurance solutions and risk management advice to businesses of all sizes offering professional services throughout the UK.
ICAS have worked with Bluefin Professions for over three years to provide members with professional indemnity insurance. More than 12,500 professional firms and 5,500 accountancy practices ranging from sole practitioners through to 'Top 10' organisation place their trust in Bluefin Professions to manage their insurance programme.
This blog is one of a series of articles from our commercial partners.
The views expressed are those of the author and not necessarily those of ICAS.