Education is key in promoting ESG
With Earth Day now in the rearview mirror, firms might be turning their attention to other issues. Yet, with the climate crisis not going anywhere anytime soon, ESG advocate Laurent Le Pajolec explains why environmental concerns need to be at the heart of all accountancy firms.
Environmental, social and governance (ESG) has become an increasingly hot topic among practitioners looking to put sustainability at the heart of their firms. With Earth Day earlier this month offering accountants the opportunity to show off their green credentials, it would seem at first glance that firms are finally taking ESG seriously.
However, according to Laurent Le Pajolec, member of the Kreston Global ESG advisory committee, firms have lulled themselves into a false sense of security when it comes to sustainability. “We read the newspapers and we create false ideas about sustainability and ecology. I take a plane 10 times a year from London to Edinburgh, but it’s okay because I switch off the lights and switch off the water. What is the real impact of that?” Le Pajolec said.
No pain, no gain
When asked about the pushback from some in the profession around ESG, Le Pajolec was sympathetic to accountants’ concerns, describing himself as “not a great example” when discussing sustainability in a previous role as an accounting partner.
However, Le Pajolec believes that firms that don’t take ESG seriously will soon be left behind as clients put more stock into sustainable business practices.
“After Covid people are starting to understand that while money is good, the future of the planet isn’t bad either. And so, I think that it is becoming a necessity in the accounting sector and beyond as organisations review their values,” Le Pajolec said.
Expanding on this, Le Pajolec doubled down on the fact that “small steps were an aperitif” and said: “When you start making bigger decisions and putting ESG at the centre of your firm, it may be painful, but that means you’re making an impact.”
Education, education, education
On the topic of what firms can do to incorporate ESG, Le Pajolec was keen to emphasise that significant incorporation of ESG comes down to education, both for your teams and your clients.
“Stakeholders at all levels should have the opportunity of learning about the company’s aims and objectives when it comes to the environment so that they have the opportunity to help the business reach its aspirations,” Le Pajolec said.
“Businesses may well find that involving their employees in their initiatives brings added benefits, including building new connections internally and attracting new recruits.
“The global popularity of Earth Day in previous years shows environmental concerns need to be central in a business’s culture to really succeed. There needs to be real involvement from top management and adequate resources associated with the goal.”
A brighter future?
Looking to the future, Le Pajolec remained positive that accountants would take up the sustainability baton, predicting that further “ESG professionalisation” was on the horizon.
“Generally, ESG was done by people who know little about finance, whether that was marketing or sales. But there’s definitely a need for people to have a feeling with the numbers when talking about ESG, and accountants can fill that gap.”
For Le Pajolec, his ESG commitments also have a personal note: “I want to be able to look back in 40 years and say: ‘I did the maximum that I could for my children and their future.’”
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