Disclosures and Risk Management
January 8, 2021
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Sustainable source: ICAEW shares lessons learned on the path to going carbon neutral

Carbon Neutral

Chartered Accountants Worldwide member ICAEW has already passed several milestones on its journey to becoming the first professional body in the UK to work towards being carbon neutral. But it’s not stopping there. In this article, COO Vernon Soare and project leader Caroline Kearns talk about ICAEW’s achievements to date, share lessons learned, and outline plans for the future.

They are keen to emphasise that ICAEW’s experience is one that accountancy bodies and businesses of all sizes can replicate in their own way. When it comes to sustainability, small can be beautiful. “When going carbon neutral is discussed as a topic, people automatically think of large multinationals with large budgets,” says Vernon. “We’ve been keen to demonstrate that a small to medium-sized business can do this – ICAEW has 700 staff, with a turnover of £120 million – and demonstrate the steps proportionate to any size of business.”

 

The achievement

Back in 2015, ICAEW started to measure its greenhouse gas emissions (GHG) on an annual basis, and then took a series of internal initiatives to lower its carbon footprint. For example, it installed LED lighting at Chartered Accountants Hall, which led to power consumption in the building dropping by nearly 60%.

It also installed recycling hubs on each floor of the building, introduced central procurement of stationery and purchased paper from renewable sources. Long before Coronavirus restrictions pushed tools like Zoom into the mainstream, ICAEW embraced remote communications. In 2016, it invested in a videoconferencing system from Lifesize, and this was heavily used across the organisation’s 10 international offices.

Over the past five years, ICAEW has lowered its carbon emissions by 20%, to its current rate of 3,300 tons per year. In order to become fully carbon neutral, it now offsets the amount of carbon it consumes by investing in projects around the globe that help to reduce carbon emissions, including a biogas initiative in Vietnam as an alternative to using carbon-intensive cooking methods, as well as projects in Kenya and Cambodia. ICAEW identified these verifiable projects, which also contribute to a number of the UN SDGs, working with a reliable offset broker.

Looking ahead, ICAEW plans to implement several other internal projects to reduce its carbon emissions even further. The roadmap aims for another 20% reduction by 2025, and 40% by 2030. “Over the next decade, we have a programme of steps that we want to take in terms of infrastructure replacements, such as upgrading boilers in our buildings from gas to hydrogen, which are big projects, and alongside that, giving staff incentives for electric vehicle where public transport is not a readily viable option,” says Vernon.

 

The lessons

1: Measure before you start

The most important first step in any carbon reduction project is to identify your GHG footprint and establish a baseline to measure against. “Once you know how much carbon you are emitting, you can start to take small steps to reduce this amount,” says Vernon.

Measuring also helps to identify which areas to focus on reducing consumption. “It might surprise many organisations to discover one of the biggest contributors to their emissions is the commuting patterns of employees,” Vernon says.

“Employee commuting accounts for over a quarter of ICAEW’s carbon emissions. Some companies don’t include employee commuting from home to the office when measuring their carbon emissions, but ICAEW took the decision to measure and offset this figure too, because we believe we are responsible for the emissions created by colleagues getting to our offices,” he adds.

 

2: Start small

Sometimes the best way to gain support for sustainability initiatives is to take a series of small steps rather than one giant project with a single long-term goal. For example, one such step might be to replace individual waste-paper bins with central recycling bins on each floor of an office building. “That may be a small change, but it’s a change that any business can make,” says Caroline Kearns.

 

3: Sustainability needs broad support

Any business that’s serious about sustainability can’t rely on the enthusiasm of a small team or individual to drive the agenda. In effect, it involves a change of culture – and that means getting buy-in from all levels. Employees are critical to this, because they will often be the ones disposing of recyclable materials in the right bins, for example. Just as important are boards of directors that can set the tone and, where needed, challenge the organisation.

Caroline Kearns credits the board of ICAEW with driving its own sustainability initiative to new heights. “One of the themes of our experience was that you need to get buy-in from the top: in our case, ICAEW’s governing body, our council, was supportive and encouraging from the outset, also our chief executive is very vocal on the subject of climate change and the importance of the role of the accountancy profession. In addition, and crucially, our board approved our carbon neutral roadmap the first time they discussed it she says. At the same time, the ICAEW team also engaged staff with ‘club climate’, a voluntary information sharing group that started in 2019 and is well attended by staff.

 

4: You don’t have to do it alone

When it comes to sustainability, some companies fall into the trap of thinking they need to do it all themselves. Vernon says there is a lot of useful information in the public domain, but external perspective was essential in filling ICAEW’s gaps in knowledge and increasing the chances of successful results. “You need to do your own work to understand the situation, but you can get others that can advise you – like in any business venture – and it doesn’t have to be expensive,” he says.

From the very earliest stages of the project, ICAEW worked with specialist carbon consultancy Verco first to measure its own carbon footprint and later to assist in the evaluation of reputable carbon offset brokers and to identify verified sustainability projects for investment to offset its own emissions.

 

The outcome

The most obvious reason for a business to start becoming sustainable is to contribute towards tackling the urgent issue of climate change (UN SDG 13). But ICAEW found there are other benefits too. For one, being public about sustainability efforts makes your business more attractive to young people entering the workforce.

“If you want to attract people to study for your qualification and work for your organisation, you have to demonstrate that you’re walking the talk and that you’re in tune with their values,” says Caroline. “We will state we are carbon neutral in our marketing and recruitment collateral. In tandem with our external offset projects, we’ve also got a very comprehensive internal carbon reduction plan, and we think we will stand out as a more attractive employer as a result.”

The other side of this argument is that any business not taking a public stance on the issue could suffer negative perceptions. “If you don’t do this kind of initiative, your own brand, or product and service may not find the market you want them to find,” Caroline adds.

Another incentive to start on the path to sustainability is the risk of lost opportunities. Caroline points out there will be a growing trend in procurement for companies to stop working with suppliers that don’t have sustainability credentials.

Lastly there is a strong economic benefit. ICAEW will continue to invest in sustainability initiatives like energy-efficient air conditioning and boilers but it has already made savings. Between April 2018 and 2019 it reduced long haul flights by 40%, and overall flights were down by 24%. It amassed 60 tonnes of mixed recycling materials between April and October 2019. After installing the videoconferencing system, ICAEW had a 287% increase in video calls and 138% rise in voice calls.

Sometimes the savings work the other way around. ICAEW moved its business software systems from its own data centre to a cloud computing provider, and its electricity consumption dropped as a result. “The driver for going to the cloud was not primarily carbon reduction, it was having an up to date and modern set of business systems,” Caroline says. She adds that this is not a net reduction, since the cloud provider will also need to consume electricity to provide the service.

Looking back on the project to date, Vernon says a key lesson was to develop a plan bespoke to our operations, to measure progress, and make gains. This incremental approach is one that other small and medium-sized businesses can apply. “It doesn’t have to cost hundreds of thousands of pounds to put the right steps in place. Working with the right partner can give anyone the tools and confidence to do this themselves,” he says.

And while there are business benefits to sustainability, it always helps to keep the bigger picture in mind. As Michael Izza, ICAEW CEO and CAW chairman says: “There’s no prosperity on a dead planet.” Every business can play its part in tackling the climate emergency we all face.

The ICAEW Climate Hub contains resources and information about how finance professionals and businesses can respond to the climate emergency and embed sustainable practices in their own businesses.

ICAEW has also created a Sustainability and Climate Change Community, which is free to join for ICAEW members and non-members. Its purpose is to provide inspiration, insights and collective ambition for professionals delivering on sustainability and acting on climate change.