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To What Extent Are Public Accountants Involved in the Realization of less CO2 Emissions? Results of a Dutch Survey

Lucas Geusebroek, Policy Advisor Sustainable Economy, Royal NBA, Teye Marra, Assistant Professor, University of Groningen and Dick de Waard, Professor Auditing at University of Groningen and Professor CSR at University of Curaçao

A new survey in the Netherlands provides insight into the current involvement of external accountants in reducing greenhouse gases. Previously, in January 2020 Royal NBA issued a Public Management Letter: ‘Climate is a financial concern’, stating that the issue of climate change should receive the highest strategic priority. The survey shows that there is still much work to be done.

In the battle against climate change, a reduction in the emission of greenhouse gases, primarily CO2, is essential. The Netherlands has committed itself to the Paris climate agreements and has implemented these in the Climate Agreement, which means 25% less greenhouse gases by 2020 and 49% less CO2 emissions by 2030 (compared to 1990 levels). Marco van der Vegte, chairman of Royal NBA: "When we presented our Public Management Letter in January, we could not have suspected that the corona crisis would lead to a - temporary - decrease in CO2 emissions. But if we look ahead, we know that meeting climate agreements requires structural and reliable information, and this information will remain necessary in the coming years. Government and EU measures and regulations are increasingly determining in this respect. Investors, regulators and other stakeholders also depend on it for their decisions."

In 2018, the University of Groningen (RuG), in collaboration with the Royal Netherlands Institute of Chartered Accountants (NBA), investigated to what extent accountants in business are dealing with CO2 policies in their capacity of financial professionals within companies and organisations. Companies are not doing enough to tackle CO2 emissions, was the conclusion of the report entitled CO2 staat nauwelijks op de financiële agenda and summarized in the article The CO2 Reduction Approach by Companies Is Inadequate.

As a follow-up to the previous study, the key question we asked was to what extent are public (external) accountants involved in the realization of reduced CO2emissions? In order to obtain a picture, in terms of what the accountants observe at their clients as well as in their own organizations (the audit and advisory firms for which they work), RuG and NBA again collaborated in conducting this study. The survey was directed at a group of nearly 9,000 external accountants, also known as accountants in public practice. A representative group of 228 respondents completed the questionnaire. Consideration was also given to personal views and the knowledge which accountants possess about climate and the associated agreements, laws and regulations and methods.

The main conclusions from the study are:

1. Accountants are engaged in climate issues to only a limited extent but aspire to play a greater role.  The majority expect that the provision of services in this area will increase.

The accountants’ wishes and expectations in regards to their involvement in climate issues is not in line with current practice. Of the respondents, 21% deal with climate issues at present, while 42% believe that they should be involved in services relating to climate. 68% expect that their involvement in these services will increase in the coming years.

2. The topic of CO2 emissions is not highlighted by three quarters of both clients and accountants.  A majority of the respondents believe that organizations should address this topic in their risk analysis. In general, clients do not incorporate CO2 in the risk analysis.

According to the respondents, 76% of clients do not raise the subject of CO2 emissions with their accountant. The reverse also applies: 71% of accountants do not raise the topic of CO2 policy with the client. That climate issues are not brought up by three quarters of the accountants and clients is contrary to the outcome that 59% of respondents believe that organizations must address the financial impact of climate change in their risk analysis. According to the respondents, 3.5% of clients currently incorporate their CO2 policies by including them in risk analysis.

3. More than half of the clients do not have a CO2 policy.  The respondents have observed little to no translation of CO2 policy into targets, measurements, and reports.  More than half of the audit firms do not pursue a concrete CO2 policy either.  Audit firms currently expect the topic of climate to have little effect on their services.

The respondents reported that more than half of their clients (58%) do not pursue a concrete CO2 policy. Furthermore, more than half of the audit firms (53%) have not pursued a concrete policy on CO2 reduction or asked their staff to actively participate in such efforts. In addition, 26% are not aware of such policy. A majority of the firms apparently do not consider the effects of CO2 policy on external reporting, financial performance and compliance with law and regulations on the part of their clients to be an important aspect of their services. These results are likely caused by the absence of law and regulations on the reporting of CO2 emissions.

4. Most accountants are personally concerned about climate change.  A minority are in favor of mandatory reporting and assurance in respect of CO2 emissions.  Half regard CO2 pricing as a suitable instrument for reducing emissions.

When asked for their opinion, 72% of respondents agree or strongly agree with the statement: ‘I am personally concerned about climate change’. At the same time, respondents are reticent about measures such as mandatory reporting on CO2 emissions: 65% believe that reporting should be at the discretion of the organization, with 31% taking the view that reporting on this point should be subject to assurance. 52% regard CO2 pricing as a suitable instrument for reduction, 35% are in favor of an internal CO2 price and 18% consider the EU ETS system to be a suitable instrument for reducing emissions.


To promote the involvement of external accountants in CO2 reduction, the researchers recommend the following steps:

A. The accountant should take responsibility and start a discussion about climate.

If external accountants want to assume greater responsibility in respect of climate issues, they have sufficient opportunities to do so. They will be in a position, much more often than is presently the case, to raise climate risk in meetings with their clients. Accountants are given similar encouragement in the NBA’s Public Management Letter (January 2020) on climate change to educate organizations on climate risks and opportunities. The client-focused attention for climate change may also take the form of highlighting the continuity assumption in compiling and auditing the annual accounts. Climate change and climate measures may have a (direct) impact on the activities of the client’s business.

B. The accountant should help organizations establish CO2 policy.

The responsibility to develop CO2 policy lies primarily with the clients themselves, and nearly half have formal policies in this area. Accountants can assist in establishing CO2 policy in their advisory role. By using their professional knowledge, they can also assist organizations to establish their CO2 accounting. This, too, is in line with a recommendation in the Public Management Letter: integrate climate into day-to-day operations. The study shows that this has not become reality yet in most cases.

C. The audit firm should start developing knowledge, targets and services.

When the audit firms look at their own organization, more than half will find that they do not yet pursue a policy on CO2 reduction and do not involve their staff members in such efforts. There is still much work to do, both in terms of targets for the organization and in terms of knowledge building. Royal NBA as a professional body also has a responsibility to raise the knowledge level of its members in this area and to play a facilitating role where possible. This may take the form of targeted courses and the provision of points of reference such as checklists or manuals, which the accountant can then use in their audit and consultancy practice.

About the Public Management Letter: ‘Climate is a financial concern’
There is a growing awareness that sustainability is not a choice, but a necessity. This Public Management Letter (PML) published by Royal NBA (January 2020) focuses on the consequences of climate change for the continuity of government bodies and businesses. Primarily, this concerns the emission of greenhouse gases such as CO2.

The principal message is simple: climate is a financial concern. Not paying attention to the effects of climate change creates financial risks, such as fines, a decrease in market share, reputational damage or a new governmental policy that threatens the continuity of the organization. In short, the climate provides financial risks, costs, and opportunities: the field of expertise of the accountant par excellence. The PML follows the four steps an organisation goes through when implementing a new strategy and formulates a suitable signal and recommendation for each step.

The role of the accountant
The core function of the accountant is to add trust to the accountability information of organizations. In this capacity, he or she encounters the business operations, policy, and strategy of numerous organizations. In the execution of his or her job, the accountant focuses on the financial health - and therefore stability and future resilience - of the organization.

This concerns not only accountants in their capacity of statutory auditors, but also in another role, such as internal auditors or accountants in a financial position. Climate awareness starts within the organisation itself, which is why accountants in business and internal auditors will often play a greater role than the accountant as an auditor, who after all is at the end of the accountability chain. Within SMEs, the accountant can and should play an important role, particularly as a trusted advisor.

Even though climate risks and opportunities inevitably have a financial dimension, in the near or distant future, many accountants are still not at all concerned with our climate. Of course, there are frontrunners, but this is a limited group, as the survey has shown. That is why this PML has been written not only for organzations, but also for their accountants. Climate is a financial concern: it is time for concrete action.

Read the Public Management Letter by Royal NBA on climate change:  

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