Sustainability and the supply chain

The key takeaways from this session

This summary is based on the discussion conducted as part of the ACCA Practice Room initiative that was led by Sarah Whale, who was joined by Steve Lister, Global Retail Sustainability Strategist and Lottie Dalziel, Sustainability Expert and TEDx speaker from Australia. 

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?

  • Partner up: partnerships are powerful. Collaboration and partnerships are set to be the new competition. Instead of trying to beat the companies next to you, create a group of like-minded accountants and access expertise, share experiences, and make a move together
  • Think about the unusual: while some tradeoffs seem simple - getting rid of paper documents and prioritising email attachments - have you actually thought about the impact. Every email carries 4g of carbon emissions. Other, more creative steps may help you to manage your own - and clients’ - emissions more effectively.  If every Brit sent one less thank you email a day, we would save 16,433 tonnes of carbon a year - the same as 81,152 flights to Madrid.
  • Recognise that gaps exist: frameworks aren’t everything. The sheer number of available means of calculating sustainability also create opportunities for companies to greenwash, or to miss the point. Helping your clients means understanding that reality and encouraging them to see that there is a strong relationship between sustainable decisions, and sensible financial decisions. Ask your client what their goals are and show them how sustainable behaviour is a way of achieving those goals faster. 
  • Ask questions: Professional scepticism is the most powerful tool accountants have to help their clients. And it starts with asking questions. If your client has requested a sustainability assessment for their supply chain, then questions will help them on their journey. This goes for SMPs’ own supply chain too. Numbers and reporting is one thing - but the questions accountants ask to challenge the facts and figures are just as important.

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.