Carbon Accounting is a tangible way for businesses to measure and report on key areas of their environmental, sustainability and social impacts. Carbon Accounting, as it’s most commonly known, is becoming increasingly important globally, so much so that The International Sustainability Standards Board (ISSB) was established in November 2021 to meet the increasing worldwide need for more uniform and comparable disclosures of sustainability-related financial information.
Ultimately, (once you can get through the jargon and formal language of such documentation), it helps businesses understand the total cost and benefits of their business, manufacturing or supply chain and can help identify, track & measure specific areas for improvement and change. As Advisors, it’s a topic we are starting to hear a great deal about. It was a keynote presentation at the recent national Xero Roadshow. So, if it wasn’t before, it’s bound to be a hot topic of discussion now.
In Europe, there are increasing examples of businesses requiring suppliers to have a detailed and documented sustainability plan before entering into formal contracts. Ensuring alignment with sustainable business practices is integral to growing solid relationships. Corporate Australia is beginning to follow suit as parent companies mandate these requirements in their policies.
Not to mention an increasing appetite to improve our environmental and sustainability impact at a local business level as consumers become more conscious about the products they purchase.
In Australia, several organisations focus on promoting sustainability accounting, including the Australian Accounting Standards Board (AASB). The AASB has released several standards related to sustainability reporting for the industry to uphold. We must have Australian-specific means that are culturally relevant.
These policies and initiatives range in scope; for example, the Commonwealth Modern Slavery Act requires certain businesses to report on the risks of modern slavery in their operations and supply chains, while the Australian National Greenhouse and Energy Reporting Scheme requires businesses to report on their greenhouse gas emissions and energy consumption. More information about the AASB’s approach to sustainable accounting can be found here.
It is an essential aspect of promoting sustainable business practices in Australia and around the world. Several clients are passionate about it, and we’re helping them lead the way in the march towards more accountability. If you’re also passionate about this, please let us know, and we can discuss a carbon accounting strategy for your business.