UK election includes focus on green issues, but do accountants get it?

Some green issues have come to light during the UK elections and our sister site, has brought them to the forefront.

It may not have registered on the accounting calendar, but last Thursday was Earth Day – a global event designed to raise awareness of environmental issues. All sorts of individuals and businesses took part in the event, including Starbucks, which was offering free coffees for all customers who brought their own cups in for the day.

They weren’t the only ones – over 200 guests were gathered at London Zoo for the Green IT Awards, an event that recognised the contributions of technology firms (including accounting software providers) flying the flag for sustainability. You’d be forgiven for thinking that after last year’s economic trials and tribulations, environmental awareness would be the last thing on many board members’ minds. That’s not entirely true at the top end of the market, where demand for assurance on sustainability issues is increasing by all accounts, but a sizeable challenge remains in the mid-market sector to implement carbon reduction measures.

One name that accountants will recognise among those nominated for the awards is Access, who walked away with the Environmental Accounting Software of the Year gong for Access Dimensions.

“We’re certainly being recognised for what we’ve achieved, but we really want to see more organisations committing to reducing their carbon footprint,” said Paul Druckman, ex-ICAEW president and now chairman of Access.

“Previously we had the excuse of recession but now we’re moving out of the downturn, we need to regain focus on carbon reduction. Clearly this can only happen if organisations have the means to measure their emissions,” he added.

“There are two main reasons sustainability needs to be top of the agenda but unfortunately in many accountants’ minds it isn’t yet,” commented  Jairo Rojas, director general of BASDA. “The first is the commitments our politicians have made; as we exit the recession politicians are going to be looking to tax us where they can. This could be one of those areas. Secondly, consumers are becoming wiser and are starting to question their providers. It’s the users pushing the agenda. They’re saying ‘I’m happy to invest money with you and be loyal to you, but you must be loyal to sustainability’”.

Perhaps this is where accountants start to get more interested. Increased political focus on the issue could result in more legislation and new taxes – which in turn will mean more work for accountants - but where are we likely to see the changes?

While the economy has been the major focus point of the election campaign, this week has seen a renewed focus on environmental issues from all the main parties. Both the Labour and Liberal Democrat parties released their green manifestos last week and while there was little mention of specific taxes that would apply in this area from the two main parties, there were a number of targets set which indicate that green is firmly back on the political menu – although whether it will prove to be a three-course meal or just a light snack remains to be seen.

Labour says it will aim to achieve around 40% low carbon electricity by 2020 and create 400,000 new green jobs by 2015. It has also pledged to use ‘active government’ intervention in markets to deliver a low carbon energy sector, as well as offering a discount of up to £5,000 for electric cars by 2015.

The Liberal Democrats promised a tax on financial transactions, as well as on aviation and shipping emissions to help developing nations moderate and adapt to climate change. It also proposed a tax on planes, not passengers, to discourage empty flights and to increase duty on short haul flights where other modes of transportation are available. Also among its green commitments is the abolition of the vehicle excise duty tax disc, to be replaced by a road pricing scheme which would charge motorists based on their use.

While it didn’t launch a green manifesto like the other two parties, the Conservatives did promise that they would push for a 30% emissions reduction in the UK by 2020 (as opposed to the 20% EU target). The party has also pledged to reform the climate change levy on commercial energy use and reform the energy regulator Ofgem.

Whichever party wins the public vote on 6 May, it's quite likely that accountants will have a huge environmental challenge ahead of them. “This issue has to be taken seriously and we don’t feel it is at present,” argues Druckman. “It shouldn’t be left to legislation to dictate what we do as a business community. Whether a business agrees or disagrees with the climate change argument is irrelevant. The fact of the matter is we’re running out of resources, so we all have to manage down our carbon footprint”.

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