Looking at Environment, Social, and Governance Issues – our Future

DD: No, but we are considering it as we see it is a place we can have an impact with clients by assisting them.

WA: Our firm has been on the ESG journey for the last 10 years after forming a strategic partnership with Pangolin Associates in the 2012 financial year. The Australian Government in 2011 was considering introducing a carbon tax on large emitting entities, and we believed this would have a ‘knock on’ effect in the accounting industry as large emitting entities would have to potentially report greenhouse gas emissions. Over the last three years, we have really made significant gains in the ESG space, through the measurement and offsetting of our firm’s own emissions, whereby we achieved carbon neutral (net zero) status in October 2020 and re-certified in 2021.

AB: Our ESG Journey started almost 20 years ago, because we had clients with high energy consumption, like the fishing industry and greenhouses. Their demand for oil and gas and the increasing prices then, were the trigger for discussing this topic with them and the effect on their profit. Also, we are active in the farming business, and there was a demand from the windmill industry to find good locations for building windmills or windmill parks.

AB: Yes, it improves our profitability. Flynth’s expert office in sustainable energy, Bosch & van Rein, is making a serious turnover. Also, our legal and tax consultants are busy in this field and making a profit. The M&A department is involved in valuation of new opportunities to prepare opinions and business plans for banks and other interested parties that would like to participate in these plans financially. Even on a small scale, we see the influence. If a family business is willing to sell/hand over the company to the next generation, the company must be valued for tax and legal purposes. That is where the specialists in valuation of sustainable business step in.

WA: As a firm, we are continually looking at ways in which we can reduce our carbon footprint (i.e., process related) – such as recycling, tree planting days and solar panelling, etc. For emission sources that we cannot eliminate, we actively seek the purchase of carbon credits (Australian and International), which arise from renewable energy projects. We believe, that in the long-term, profitability of the firm will be improved as we continue to attract new clients to the firm who value sustainability within their business.

DD: It is something we are looking at for the future.

WA: Our firm is carbon neutral. It is definitely a means to retain and attract staff, in particular millennials who place a great deal of value on climate change and sustainability.

AB: It sends a signal. In my opinion, it is even a stronger signal that your firm has started its ESG journey. Staff take that into account for their own carbon footprint and in helping clients to develop carbon awareness, as well as actually providing services to clients. Make clear that your firm is having a bigger impact than just their own footprint.

AB: Especially our new clients that are attracted by our ESG message want to receive proof of the Flynth Carbon impact and what we are actually doing. You must ‘walk your talk’, and they are not satisfied with some vague answers. If this is the case, we would be recognised as a greenwashing firm, and this would have a negative impact on our image and, therefore, our revenue.

WA: We are heavily marketing our ESG capabilities on our website, in our marketing and branding documents, at our premises (i.e promoting recycling, promoting the use of video technology, reducing the amount of printing, holding tree planting days with staff, clients and contacts). We have found that we are attracting clients in the environmental industry due to our sustainability presence (i.e., a wind farm, environmental consultants and carbon lobbying groups, etc).

AB: Yes, that is for sure. We, therefore, have appointed directors to develop this topic. We made the split into integrated reporting and sustainable business development. And we have a separate subsidiary engineering firm. Looking at the funds available for the EU, the international impact, the pressure of multinationals to their suppliers to report on their ESG impact, there is no way back in my opinion. Over 10 years, we will look back and say how surprising it was that we did not address this earlier than we did. In my opinion, since the Paris Climate Summit, the topic really started to engage more and more people/companies. The EU is sending out more and more regulations, and there is no way back.

DD: Absolutely!

WA: Definitely. We feel it will lead to long-term staff and client retention, which will result in improved profitability for the firm.