At a glance
Carbon footprint
“Measuring a carbon footprint is a process that has been worked out and prescribed by the Greenhouse Gas Protocol. It essentially requires you to work out what emissions you produce under your own steam.
“Are you burning any fuel that creates CO2 emissions? Are you using any electricity that creates CO2 emissions? Is there anything happening up and down your supply chain that’s creating CO2 emissions?”
Reputational pressure
“What’s happening with a lot of these businesses is they’re realising that their consumers’ spending trends are changing over time, and that shoppers are looking to shop with organisations that are demonstrating more responsibility in this area [carbon emissions].
“These organisations are making decisions based on their access to markets and to consumers and customers, not so much because of regulators telling them to do it.”
Cost-saving opportunity
“For many years, people looked at sustainability, or ESG [environmental, social and governance] or carbon accounting as a cost or a burden or a necessary evil. What a lot of people are realising now is that these things will often ultimately create cost savings along the way.
“The classic is electricity usage that generates CO2 emissions. One of the best ways to reduce your carbon footprint is to reduce the amount of electricity you use, so people are investing in more efficient technologies and more efficient machinery.
“In addition to using renewable energy, they are using less energy, which is costing them less money in the long term.”
Skills for carbon accounting
“The things that are driving best practice in financial accounting and communication of financial performance are the things that are going to drive best practice in communicating non-financial performance.
“These sustainability standards have been drafted by the accountants, so the IFRS [International Financial Reporting Standards] Foundation that is responsible for setting the accounting standards globally is also now responsible for setting sustainability standards.
“They are applying the same types of principles that would ordinarily be applied to accounting standards. Concepts of relevance, completeness, consistency, transparency, accuracy – they all apply to carbon accounting.
“There will be many traditional financial accountants who will also become carbon accountants once they master the subject matter, because they have the skills to do it comprehensively and effectively.”
