Green Stars

07 Aug 2008Archived News Energetics in the News

Published: Real Business by Diana Elliot - Dr Mary Stewart, Principal Consultant; Sustainability, Energetics Pty Ltd talks about the effect the National Greenhouse and Energy Reporting Act will have on companies.

 

CPAs who enter the sustainability sector have the opportunity to feel good while being part of the greatest growth area for business, writes Diana Elliott

Despite the drought, Australia has never been greener. Terms like sustainability, clean energy, carbon offsetting and corporate social responsibility (CSR) are being pumped into mainstream consciousness at a frenetic pace. The corporate world now understands the economic as well as the reputational benefits of being green. This, together with the federal government’s legislative push to compel business to reduce its emissions and increase the availability of renewable energy, means opportunities abound for young finance professionals to make an impact.

In recent years, sustainability has become a serious business, with “green collar” career opportunities flourishing. Businesses that are engaged in developing renewable energy systems, auditing carbon emissions or designing carbon offsetting schemes, are well positioned to take advantage of the biggest global challenges – climate change, an energy crisis and global warming.

It’s something that’s not lost on Mark Kelleher CPA (see profile), managing director of Roaring 40s, a leading renewable energy developer specializing in wind energy.
“The federal government’s recent decision to extend the Mandatory Renewable Energy Target (MRET) from 2 per cent to 20 per cent,” explains Kelleher, “has really increased the momentum for the development of renewable energy, and in particular, wind power.”

The company has numerous wind energy projects underway in China and has begun work in India. Kelleher says the outlook in Australia is now also very strong.

As well as renewable energy development, opportunities will continue to emerge in the area of carbon auditing, advice and trade. Gavin Pereira is environmental director with the Carbon Reduction Institute, which developed a carbon accreditation program called NoC02. “In Australia, the sustainability market has evolved in a haphazard and loosely regulated way,” he explains. “A lot of voluntary schemes have sprung up to enable corporations to do something about their climate change impact.”

Now that Australia has ratified the Kyoto Protocol and work has begun on a blueprint for an emissions trading scheme, Pereira believes the green sector will take off even further.

And because the assessment, analysis and reporting of carbon emissions will be mandated by the National Greenhouse and Energy Reporting Act 2007, the skill base of accounting professionals will be in high demand. “Accountants have very relevant skills for carbon accounting,” says Pereira. “We measure a carbon footprint based on the inputs of the business and we track those inputs of the business and we track those inputs via the business’ chart of accounts.”

At present, the auditing function is typically performed by those with an environmental science background, but many in the sector believe this is only because the finance profession hasn’t yet fully seized the opportunity that exists to contribute.

Professor Carol Adams FCPA (see profile) is an academic and consultant in social and environmental accounting and sustainability reporting. “There are many opportunities for accountants to add value to this area,” she says. Adams believes CEOs understand the importance of addressing sustainability issues but CFOs and finance professionals need to embrace the challenge to quantify the non-financial business impacts. “There are many non-financial benefits to businesses for developing good sustainability practices,” explains Adams. “It helps in attracting and retaining staff – survey after survey has found that the best employees prefer organizations that are ethical. It builds trust with stakeholders, builds customer loyalty and reduces the risk of bad press.”

Darryl Innis CPA is CFO at M2, a network independent provider of retail and wholesale fixed-line, mobile and data telecommunication services in Australia and New Zealand. M2 recently launched http://www.greenmobiles.com.au, which allocates 10 per cent of a customer’s mobile phone bill towards acquitting or purchasing carbon abatement credits.

The company is just as serious about greening its own operations. “Working in an environmentally aware company is very satisfying,” says Innis.

M2 was the first to buy carbon on the Australian Climate Exchange (ACX), and part of Innis’ role is to identify and operationalise opportunities for the company to be greener – whether that’s looking at the type of paper that is used, recycling practices or energy management.

Adams believes finance professionals can help businesses to develop data collection systems and internal reporting formats to assist in decision making, as well as performance management systems that take into account social and environmental impacts. They can build links between internal and external reporting and perform internal auditing and external assurance functions.

“There’s a skills shortage in this area at the moment because everyone’s needing to do it fast,” says Adams.

Dr Mary Stewart is principal consultant, sustainability, with Energetics, an integrated provider of energy, greenhouse and sustainable solutions. “There will be significant growth in the amount of reporting required by companies as a result of the National Greenhouse and Energy Reporting Act 1007,” says Stewart. “At the moment, only 40 per cent of those companies required to report have been collecting the data, so there is a massive challenge to help businesses comply with the new legislation, which becomes effective on 1 July 2008.”

The draft regulations make specific reference to the role that financial auditors will play. “There are opportunities for accountants on two levels – firstly, in constructing the reports and helping businesses understand what is required by the legislation, and secondly, in the auditing and verification of those reports.”

She cautions that finance professionals need to appreciate the multi-dimensionality of environmental information. “Money only works in one dimension, and often a financial audit is a static snapshot of a point in time. With carbon audits, it’s really about a flow.”

The evolutionary nature of the green sector presents unique opportunities for graduates. Kelleher says, “If you are looking to enter the sustainability sector, you are exercising great judgement about your career path. It’s not only going to be something that you feel good about – you’re doing something that will drive economic growth and be environmentally beneficial as well. It will be the greatest growth area for business in the future.”

 

Join the conversation