The article "Accounting for sustainability" in FM's January/February issue explained the strategic imperative of managing the effects of climate change. But what should financial managers actually be doing to help their organisations tackle this challenge?
An international survey of financial managers and sustainability professionals by CIMA in conjunction with Accounting for Sustainability has uncovered some useful examples of best practice. The nine case studies it has derived from this research and published are a rich resource for management accountants keen to start tackling climate change.
One of the key conclusions of the study was that finance needs to be involved in sustainability initiatives--eg, in forecasting, investment appraisal and cost/benefit analysis--so it's helpful to see how some firms have made this happen. The Asda case study, for example, shows how the finance team plays a key role in the planning, testing and implementation of sustainability programmes such as "Zero waste to landfill".
The Fife Council case study features a cross-functional framework for implementing its carbon emissions reduction plan that sets out the specific role of the finance team. Other sustainability governance structures can be found in the Jaguar Land Rover and Marshalls case studies. Marshalls, a supplier of stone and concrete landscaping products, conducted a carbon labelling project. Its case study shows some of the spreadsheets designed and used by the finance team to help generate a label for each product group.
As another example of sustainability in action, Compass Group, one of the world's largest food and support service providers, worked with Sherwood Forest Hospitals NHS Foundation Trust on new technology to reduce wastage in catering. A model shows how the management accountant calculated the potential cost savings of the investment and how a tracking system was used.
There are also plenty of sample models and project summary documents in the Asda case study. One model shows how the finance team monitors a project whereby food that cannot be sold is bulked up at its recycling centres and sent for reprocessing into biofuels or pet food. Finance is a key member of the Asda project team, providing actual and forecast …