The key takeaways from this session
Accountants of all stripes have a huge role to play in helping businesses make and keep their supply chains sustainable. As both internal and external pressure grows, companies dig into their relationships to understand their environmental footprints and accountants have found themselves uniquely qualified to assist.
But before small and medium-sized practices (SMPs) assess the supply chains of their clients, it is important that they understand the sustainability of their own supply chains. Such a task can also help them to see the best ways to assist their clients.
Typically, supply chain assessments will involve breaking down Scope 1, 2, and 3 emissions . Plenty of companies are used to Scope 1 and 2 - and accounting companies wouldn’t have much to record in these columns, since they pertain mainly to manufacturing emissions and purchased energy use - both of which are either almost negligible or highly calculable for SMP accountants. But Scope 3 poses more of a challenge, since it encompasses the emissions from fairly ordinary behaviour, such as purchased goods and services, travel, employee commuting, and waste disposal, among others. SMPs that calculate their own Scope 3 emissions will have the edge on competition for advising prospective clients on the sustainability of their supply chain.
Many clients will begin asking SMPs for help with supply chain sustainability assessments since their own large multinational partners are beginning to demand it, and since it will become more difficult to bid for work such as government contracts (for example, in the UK) without demonstrating commitment to net zero.
So how can SMPs get on the front foot to help their clients?
While there is undoubtedly a moral imperative to sustainable business behaviour, many companies won’t take steps to be truly carbon neutral until it is a financially compelling proposition. Accountants, as the gatekeepers of financial statements, have a responsibility to demonstrate to their clients that sustainable is also sensible, and that the supply chain is an important part of that.