How major accounting firms are working towards net zero
Plans are underway for many organizations to reach net zero within the next eight years (Getty Images/Westend61)
Promoting environmental, social and governance (ESG) commitments has become a top priority for today’s leaders. As a result, a growing number of accounting bodies, including CPA Canada, are committing to achieving net zero greenhouse gas emissions by 2030 or earlier for their operations. In the last two years in particular, efforts have been formalized and reported in key areas such as emissions reduction, operations, supplier/partner relations, employee empowerment, training and customer support. .
Here’s a look at some of the ways accounting firms do this.
MNP ADVISING CUSTOMERS
Edward Olson, CPA, head of environment, social and governance for MNP, says customer education is a critical link to achieving net zero goals. He cites three key areas they address with clients: awareness; understand the goals and the transition plans to achieve them; and emissions reporting.
“Many still don’t believe net zero goals will impact their business, but it’s critical that they understand that executing on these goals will have a direct link to business value,” he says.
Setting and executing goals is key, he adds. “Execution will need to be based on establishing a transition strategy that is sufficiently defined so that they can assess whether they are meeting their objectives in a meaningful way. This is the piece that is usually missing.
MNP is also educating its customers on the extent of their reporting requirements in the future. This is an effort to help customers understand the sources of emissions within their operations and throughout the supply chain.
“Companies should be aware that they will eventually, if not already, be faced with obligations to report their emissions to their customers. [and investors] and quantify them meaningfully. This will require some type of assurance to improve the reliability of disclosures. (The ISSB’s recently published exposure drafts of its first two standards give an indication of what’s to come.)
THE DELOITTE GLOBAL CLIMATE PLAN
“Reducing emissions is a very important pillar of our zero emissions strategy,” says Sheri Penner, CPA, WorldClimate Executive, Deloitte Canada.
The company shares a goal with many organizations to reduce business travel emissions by 50% per full-time employee from FY2019 levels by or before FY2030. cannot simply rely on a solid carbon offsetting strategy. Many more proactive things need to be done for this coin to reach net zero.
This aligns with the Science-Based Targets initiative (SBTi) which provides a clear pathway to limit the Earth’s temperature increase to less than 1.5°C.
Details of Deloitte’s net-zero initiatives can be found in its WorldClimate plan as well as its 2021 impact report. Among many other initiatives, Deloitte has a Green Champion Network that encourages climate-friendly activities at work and at home , says Penner. “They have identified many community projects that align with climate action, from creating an Indigenous Carbon Fund to using e-bikes for commuting.”
Equally important is engaging the ecosystem of suppliers and customers, she adds. “We have a unique role to play because we can work with different organizations and dedicate resources to help solve climate problems. For example, we brought together 30 companies concerned around aviation to consider adopting sustainable aviation fuel or working with companies with carbon sequestration technologies.
A NEW EQUATION FOR THE PWC
PwC Canada’s net zero commitment is fully integrated into its global strategy, The New Equation,
The company’s strategy is used internally, as well as with its clients, to support their efforts to make a net zero future a reality, said Mike Harris, CPA, partner, ESG practice and net leader. zero, PwC Canada. “We are building on our clients’ existing work on sustainability and net zero transformation and augmenting them through our broader goal of helping clients close the gap between their current state and their ESG ambitions. “
To help management keep pace with reporting requirements, PwC released the 2022 Canadian ESG reporting insights study. The report highlights a commitment to “decarbonizing their value chain,” adopting ESG standards, as well as partnering with suppliers who share the same sustainability priorities. “Climate change and net zero transformations are at the top of leaders’ agendas,” Harris says.
“Companies are under pressure to provide information that is relevant, reliable, complete, comparable and of the same caliber as high-quality financial information.”
KPMG ACCELERATES THE ESG PACE
For KPMG in Canada, there has been a growing desire from its own staff, clients and the communities they serve to do more on its environmental commitments, says Heather Baker, FCPA, Canadian Managing Partner, Head quality and risk management and social impact .
In 2021, KPMG joined RE100, the global corporate initiative on renewable energy that brings together leading companies committed to 100% renewable electricity. “Joining RE100 reinforces our global commitment to becoming a net-zero carbon organization by 2030,” Baker said.
The company is also implementing carbon reduction measures in its operations, including upgrading to LED and sensor lighting where possible, implementing green roofs and gardens, and targeting of LEED standards on new buildings and renovations.
“Additionally, we’ve created a network of green champions that will help mobilize our people around its environmental commitments while tapping into our people’s passion for the environment,” she says.
In March 2022, the company launched a three-part global learning program to increase employee ESG knowledge and the fundamentals behind what it is, why it matters, KPMG’s commitment and how it can have a positive impact.
EY CANADA ESG TRAINING CHAMPION
To reinforce its commitment to ESG, EY Canada has appointed Kent Kaufield as its first Chief Sustainability Officer in 2021. which we wanted to go,” he said. “Globally, we were carbon neutral in December 2020, carbon negative in October 2021 and we will be net zero by 2025.”
Across the business, EY wants all offices to be powered by 100% renewable energy by 2025, he adds.
One of the fundamental principles of its plan is to work with the entire ecosystem of customers and suppliers. “By 2025, 75% of EY suppliers will be required to set SBTi-approved science targets,” says Kaufield.
Much of the effort was driven by employees. EY Ripples, for example, allows people to work on community initiatives across the country. “As part of Ripples, we are officially launching the Eco Innovators Group in Canada, which focuses on environmental initiatives.”
From 2022 to 2023, the focus will be on accelerating the introduction and standardization of climate information by regulators, he adds, noting that standards, such as those set by the ‘International Sustainability Standards Board (ISSB) “sets clear standards of expectations.
EY has also established a relationship with the Hult International Business School which allows employees to earn a master’s degree in sustainability. “It will be part of how we develop and retain people. I believe we are one of the first in our industry to do so in Canada, but we certainly won’t be the last.
CPA Canada has a wealth of sustainability resources, from reports to reviews of net zero disclosures and details of our own commitment.
For those looking to improve their skills to be ready for the future, online courses are available, including Climate Change for CPAs in Auditing and Assurance, as well as Climate Change for Executives.