The Australian Accounting Standards Board (AASB) has enacted mandatory reporting from January 1, 2025 for corporations and other entities to disclose climate related risks and opportunities in relation to their business to be rolled out until July 2028. The accounting industry is directly responsible to collect, analyse, and report on the social and environmental impacts of their business and welcome green accounting practices into their operations.
Green accounting implores accountants to factor environmental costs into their procedures and business decisions. This practice allows policy makers to understand the relationship between economic activity and environmental health, allowing for better business management, reduced climate damage, and to gain an understanding of a business’s environmental impact.
With many clients looking to partner with firms that have an eco-friendly approach, environmental reporting has become integral to financial strategy for firms and clients alike, all while contributing to a greener economy.
To ensure greener financial strategies within your firm, accountants have a few options. You can look into funding renewable energy projects, embrace eco-friendly financial strategies and transition toward environmentally friendly business models.
When funding renewable energy projects in relation to your firm, you could consider this example. If you have a client who is looking to install solar panels for their office building to reduce emissions, you as their accountants can help them keep track of their investment, ensure the energy cost savings are tracked, and their energy expenses are reduced due to reporting their records.
An example of an eco-friendly financial strategy is a concept called ‘green bonds’. The Australian green bonds program allows investors to back projects designed to drive Australia’s goal of reaching net zero greenhouse gasses emitted by 2050 all while supporting environmental objectives. As an accountant, you can guide your client on where best to invest their finances to support this initiative. Whether that be within the conservation space or investing in eco-friendly practices within their workplace in the form of water conservation or green buildings that embrace energy efficiency.
Environmentally friendly business models take many forms. The best place to start is within your own firm. Reducing paper waste, embracing digital-first technologies with sustainable responsibility in mind, and supporting community environmental initiatives are easy places to begin your transition. Businesses that adopt a greener strategy are not only able to keep up with mandatory government standards but also have an edge on the market as clients look to firms who take climate concerns seriously.
For firms looking to embrace a greener accounting landscape, there are options available to make your firm stand out within the sustainability sector.
With a growing demand for sustainability transparency from both the government and your clients, accountants are encouraged to monitor their carbon footprint. Energy consumption within an office, transportation, and use of unsustainable technologies are all within that scope.
Australia is looking toward a greener future, and the accounting industry plays a crucial role. It’s important to remain vigilant when reporting your environmental impact so that your firm can remain up to date with legal requirements while also fostering a sustainable future for both the accounting industry and a greener planet.
