As we enter a new year, and my first as an Ashcroft partner, I’m delighted to have been asked to write a piece for the Ashcroft community. Sharing our views with clients and connections is a large part of our role and I’m pleased to dip into my experience to do that.
When selecting a topic, I pondered over current issues and one key thing came to mind. Something that many of our clients are asking for advice on and a topic that’s currently on our boardroom table: how the increasingly important reporting on sustainability and climate related matters will affect businesses.
Starting as we mean to go on
With last year’s COP26 in the rear-view mirror, companies and individuals have been left with a clearer set of challenges. Whilst the idea of carbon offsetting is by no means a new one, the companies we deal with are noticing an increased focus on how their internal policies and actions affect their role in the marketplace.
There is a changing landscape of information required by investors and stakeholders and businesses are increasingly asked about climate-related matters. The focus on enhanced corporate reporting of environmental-related matters under UK law are intended to help meet these needs and, whilst much of the current legislation applies to large companies, there are big moves towards small and medium companies improving the quality of their reporting in this regard.
For organisations not currently covered by these legislative changes, specifics may differ but interested parties may still require sustainability information from the SMEs in their supply chain in order to meet their own climate-related reporting needs.
Why it matters
The potential impact of climate-related matters on the operations, financing and performance of companies is now much more of a focus to business stakeholders. These stakeholders include investors, regulators, employees, NGOs, customers and suppliers.
A pertinent example is that of high street banks providing finance to small businesses – the banks must report what they are doing in this field and that trickles down to what you are doing.
Indeed, we at Ashcroft are a case in point. We are currently writing and implementing our own corporate responsibility and carbon offsetting policy. To help tackle climate change? Yes, of course, as we believe we should absolutely play our part, but also to positively position ourselves in a competitive marketplace and remain profitable. Larger companies are looking at the small and medium companies in their supply chain and advisory circle, asking them for their policies. In fact, it is fast becoming a USP and a deciding factor on whether a company is awarded a contract, or not.
The important question our clients are asking us is: ‘What can we do now to position ourselves alongside or ahead of competitors when writing and implementing our own carbon-offsetting policy?’ My answer is act now. As experienced auditors and accountants we can help formalise and evidence the claims you are making and guide you through the technicalities of this growing responsibility. I don’t think it will be long before medium and even small companies have to fall in line and formally include carbon offsetting in their accounting too.