In that CIMA survey, entitled Accounting for Climate Change, we concluded that benchmarking, league tables and clear reporting enable management accountants to show exactly how their companies are doing in terms of reducing their carbon footprints.

 

UK company Punch Taverns found that, through a three-pronged approach, they have delivered an 11% reduction in energy consumption in their pubs, for example. ‘If you don’t measure it, you can’t manage it and it’s had a huge positive impact on the accuracy with which finance could base their accruals,’ says Stephen Allen, Head of Property (leased), Punch Taverns. ‘Better accuracy takes away all the debate about whether energy management needs to improve.’

 

Measurement is critical and management accountants are well versed in applying targets, key performance indicators (KPIs) and scorecards to ensure their organisation’s sustainability strategy is delivering results.

 

But in our interviews and survey, only UK grocery chain Asda – where the finance team not only produce environmental targets, but disseminate them via portals to each store and use them as part of performance reviews – allied measurement to individuals’ targets and bonuses on climate change. A McKinsey study in 2007 found that only 24% of executives around the world (about 50% in the energy and basic materials sectors) say that their companies have set emission targets for operations.

 

By using voluntary targets, businesses have an opportunity to reduce emissions on their own terms. These targets must be credible: an experienced finance business partner has the skills to ensure that the objectives are meaningful enough to satisfy – and head off regulators who might be tempted to impose a stricter regime. (A further example of the use of sustainability balanced scorecards can be found in the Masisa case study at www.cimaglobal.com/sustainability)

Accountants should challenge, but not stifle, ideas by providing measurement and analysis of trials, for example. If new ideas around sustainability fail – and given the lack of established best practice in this area, many might – they should offer avenues through which they could become successful. ‘We have a process of trying projects in one, then five, then 20 stores, so we understand all the impacts in financial terms before rolling out to more stores,’ says Mark Orpin, Head of Energy Management at Asda. Management accounting feedback during that process is essential.

 

Chris Harrop. Marketing Director at UK landscaping company Marshalls, said, ‘Anybody who’s doing a three-year plan now and not factoring in energy costs, CRCs, energy trading schemes or ETS type schemes, is getting it wrong.’

 

Stephen Allen, Head of Property (leased) at UK pub company Punch Taverns, said, ‘If you don’t measure it, you can’t manage it and it’s had a huge positive impact on the accuracy with which finance could base their accruals.’