Businesses can’t afford to avoid tackling sustainability issues. Consumers are becoming increasingly aware of the environmental impacts of their consumption habits. Investors and regulators are demanding action. And proof that companies account for their impact.

Focussing on sustainability can drive both consumer satisfaction and sales. SMEs are realising that monitoring and addressing environmental, social and governance factors (ESG) is crucial to their growth.

A number of complex tools and frameworks have become available to regulate ESG (Environmental, Social and Governance). Sustainability audits are becoming more common place. But those resources are mainly focused on large corporations. There’s hardly anything for SMEs.

Given SMEs make over 50% of the UK economy we think it’s wrong not to focus on SMEs efforts to tackle sustainability issues. Why only look at half the equation by focussing on resources for large companies.

We wanted to better understand the challenges facings SMEs when it comes to sustainability issues. So we carried out some research. We talked to clients, partners including attendees registered for our annual FD Seminars due to take place next month. Those conversations revealed some interesting results.

We asked: ‘why do SMEs need to be on a sustainability journey?’ Our survey said…

67% of respondents are unaware of their business’ total carbon emissions – but 38% of them do have a plan in place

Currently there is no legal requirement in the UK for SMEs to measure and report their emissions. Large or quoted businesses are required to report under the Streamlined Energy and Carbon Reporting (SECR Framework).

SMEs should be mindful that the UK’s net-zero target is legally binding, so further legislation is likely to be introduced in the coming years.

It’s worth noting that improving your sustainability performance can also help lower operating costs. In fact, McKinsey found that ESG efforts can affect operating profits by as much as 60%.

Main barriers usually are cost or a lack of in-house understanding. The government has published guidance for SMEs on how to measure and report emissions. And if you struggle you can always come and talk to us.

For those who measure, only 12.5% have it 3rd party verified

Carbon footprint, especially when it comes to Scope 3 emissions, can be a complex exercise. Given that only 18% of respondents have or are planning to recruit a sustainability professional, it’s important to ensure that your corporate commitment is accurate and free of error.

If the carbon accounting is carried in-house, we strongly recommend an audit of the carbon footprint calculation. This requires a Limited Assurance report in accordance with ISAE 3402

Only 21% of respondents have a sustainability/ESG report

Although not mandatory, the reality is that the demand and practice of ESG reporting have increased. Companies that don’t provide these reports show a lack of transparency. Their customers will take note.

The varying ESG reporting standards and frameworks with different associated costs to collect and report data can hamper efforts.

As a starting point, companies don’t need to over-engineer reporting. Just get started: focus on 2 or 3 objectives important to your company. Be open and transparent. Tell people about your progress. There’s nothing wrong in saying you’re still working on improving things. The point is you’re tackling ESG issues.

Final thoughts

We asked our clients and partners how they perceive sustainability on a scale of 1 to 5. With 1 being a reporting obligation and 5 being an opportunity. We had views from one spectrum to another, landing on average somewhere in the middle, at 3.3.

Integrating sustainability into a company’s overall strategy is a way to grow both the top and bottom line. It will also drive innovation.

In the words of Ray Anderson, seen by many as one of the greenest CEOs in America, sustainability is “a better way to bigger profits” and if “done right, sustainability doesn’t cost. It pays”. And in the process there are other benefits. You’ll have better customer satisfaction. Employee engagement and retention. And who wouldn’t want that? Afterall tackling sustainability is good business sense.

We believe doing good business is good business. In our 3-year vision we’ve made big, inspiring commitments. By 2025 we’re B Corp certified. On our journey to net zero. And we have a Head of Sustainability driving our business to be more sustainable. Well, we’ve ticked the last off. Meet Nicoleta Ciobanu.

The drive for businesses to be more Sustainable has never been greater. It was already on our radar. Then COP26 put it firmly front and centre in our thinking. We’ve always been a business with purpose. Particularly when it comes to our employees and community. We now want to extend that purpose to include the environment.

We want to be at the forefront of businesses that are taking heed of sustainability. We lead. We make life count. And that means we take care in our environmental, social and governance impact. Our journey to become B Corp Accredited demonstrates that doing good business is part of our DNA.

Getting Nico to lead our sustainability efforts is also a response to demands from our clients and partner organisations. They want to work with businesses that share their values and vision. As do we.

Things are changing. Large businesses are already required to report on their Carbon emissions. Regulators are proposing more mandatory reporting requirements for ESG. More clients are making voluntary disclosures and requesting assurance on those. There is a myriad of frameworks to apply. Guidance to follow. And we’re being asked our advice on how to cut a way through the noise.

Ade Cheatham our CEO said of Nico’s appointment:

“I’m really excited that Nico has agreed to take on this role. Becoming our first ever Head of Sustainability. She brings together passion, substance, and credibility.

Sustainability is here to stay, and we need to have an evidence-based approach to it. Her accounting and auditing skills will be key to monitoring our progress on our sustainability journey. Holding me and the whole CP team to account.”

Nico’s already part of the CP family having worked as an Accounting and Advisory Manager for the past 6 years. It’s really important to have someone leading on sustainability that is really embedded within CP. Who gets us. Our culture. Our operations. And most importantly our people.

But it’s not just about being part of CP. Nico’s also got the qualifications. A Cambridge University Certificate in Sustainability in Business Management and Global Reporting Initiative certified.

Plus she’s got the experience. She’s been working with our clients. Supporting them on sustainability issues for some time. Helping them set up systems to manage data capture and assurance. Clients in UK and Europe who want Nico’s input on Sustainability Advisory projects.

And Nico’s got the connections. A keen community member of B for Birmingham. A group for existing and upcoming B Corp members. Active alumni of Cambridge Institute for Sustainability Leadership. With Cat Kelly our Head of Retail, Nico helped set up the Sustainability Sussed Community powered by Cooper Parry.

Nico said of her new role:

“I’m incredibly excited to be making this career shift from accounting advisory to sustainability. After ‘flirting’ with sustainability in my professional life for almost two years now, getting myself up to speed on the business imperatives, I am ready and excited to be turbo-charging CP’s sustainability efforts, our B-Corp journey and achieving our net zero targets.”

Along with focussing on CP’s sustainability targets Nico will also keep an external role for those clients that are on a similar sustainability journey. Supporting them through confusing ESG regulations and benchmarks.

On Friday 23 September, the Chancellor Kwasi Kwarteng introduced the biggest package of tax cuts for 50 years.

But what do these significant changes mean to you and your business?

In this Cooper Parry review, we bring maximum insight into the Mini Budget (actually, not so Mini after all).

Oh, and Mr Kwarteng has strongly hinted that there is ‘more to come’.

Discover what we know already and click here. 

 

Hard on the heels of launching our ambitious new plans to grow fivefold in five years, we’re delighted to announce another significant appointment to boost CP’s already strong leadership line-up.

Phil Erridge recently joined as Chief Operating Officer after 16 years with HSBC where he led HSBC’s global wholesale model management and delivery function.

Phil brings experience of taking on a number of significant senior roles with HSBC. These include leading the integration of the global Wholesale COO organisation, the creation of a data-led customer experience and sales function. And managing the Commercial Bank’s financial crime risk function globally.

Phil is passionate about developing organisational capabilities; using a powerful blend of data, technology and collective team effort to continually develop all the operating elements of the business to enhance “how we do” what we do.

All of which hits the right notes at CP as we’re driving growth across new and existing opportunities and markets following significant recent investment from Waterland Private Equity.

Working alongside CEO Ade Cheatham and CP’s Leadership Team, Phil will lead the firm’s integration activities across several strategic acquisitions and drive operational efficiency.

Speaking about Phil’s appointment, Ade said:

“I’m delighted to welcome Phil to the CP family. His role as COO will be invaluable as we target significant and ambitious growth over the next five years. And now with substantial PE investment behind us, having someone with Phil’s global breadth of experience and can-do attitude is both timely and terrific.”

On joining Cooper Parry, Phil added:

“What attracted me to CP was the both the culture of the business and its desire to continually improve and challenge the market. For me, this mindset is hugely exciting as it provides an environment to do great things. I’ve watched with interest the growth of Cooper Parry and I’m thrilled to be joining at a time of significant growth and massive change.”

Cooper Parry Corporate Finance with colleagues from the Transaction Tax team have advised the Shareholders of SV Timber on the sale of their business to National Timber Group (NTG), a portfolio company of Cairngorm Capital Partners LLP.

Established in 2004, SV Timber is a specialist, independent timber merchant supplying an extensive range of timber materials to a broad range of trade and commercial customers, including joiners and manufacturers, from three branches across the Midlands. SV Timber has a strong reputation for outstanding service and quality, recently supplying the timber for the Commonwealth Games in Birmingham. SV Timber employs 50 people and, in 2021, achieved revenues of £17m.

This transaction is well-aligned with NTG’s strategy to become the leading, independent timber processing and distribution group in the UK, with a focus on value-added products and industry-leading margins. SV Timber fills a geographic gap in NTG’s existing branch network and further extends its customer reach within the Midlands.

SV Timber’s shareholders, Edward Holder and Richard Rowley, will remain with the business and continue to play leading roles in the integration and combined growth of the group going forward, including the relocation of SV Timber’s flagship site from Ilkeston to new, larger premises in Nottingham.

Rob Barclay, Group Chief Executive of National Timber Group said:

“We are delighted to welcome SV Timber to the Group – our shared expertise and commitment to our customers makes this an obvious and complementary partnership. Together, we will extend our range of services in the Midlands, improving our customers’ experience.”

Edward Holder added:

“As the founder of the business, I am extremely proud of what the team at SV Timber has achieved to this point. We know that the business is capable of achieving much more over the coming years. The priority was to find a partner with shared goals and values who would help us to fulfil the future potential. We were impressed with National Timber Group’s focus on product quality and its commitment to the highest standards of customer service. We are confident that we have selected the right partner and that SV Timber will continue to prosper within the enlarged Group.

 The Cooper Parry team gave us fantastic support throughout the deal process, providing excellent technical support, managing all workstreams diligently and ultimately adding value. I would highly recommend Cooper Parry to any business looking at a potential transaction.”

 Alex Ydlibi from the Corporate Finance team said of the deal:

“We’re delighted to have supported the SV Timber team on this deal with NTG.

The business’ success is a testament to the hard work of the team and its emphasis on building and maintaining excellent relationships. We’re excited to see its growth continue as it successfully transitions to an impressive new flagship site in Nottingham.

It was a pleasure to work with the SV Timber Team and we wish the business all the very best success as it moves forward under NTG’s stewardship.”

We’re super excited to have been ranked number one in the first ever Accountancy Age Mid-Tier Power Index.

The ranking seeks to reward and recognise mid-tier firms in the UK that champion true accountancy excellence. It lists the top 40 firms against four key categories: Strategic Planning, Profitability/Growth, Professional Excellence, People & Community.

The Mid-Tier Power Index (MTPI) was judged by a panel of experts from across the UK accountancy industry, including partners, directors and chief executives from a selection of leading accounting firms and professional bodies.

They said of us that we performed admirably across all four categories and emerged as the overall winner of the MTPI. They recognised that we’re particularly strong when it comes to Professional Excellence. Particularly in recognising the significance of both client and employee satisfaction.

The judges also commented on how we showcased our excellence in accountancy, to educate, motivate and inspire.

Glenn Collins, Interim head of ACCA UK, Head of Technical and Strategic Engagement was thoroughly impressed with the quality of entries and had this to say:

‘Looking at professional excellence across four key categories – the strength that leading firms display in these areas was truly impressive. The entries demonstrate a fine blend of leading business acumen, enterprise, tech know-how, integrity and great people practises, all backed by the highest levels of professional standards’.

Talking about being ranked #1, our CEO Ade Cheatham, said:

“I’m super proud of the CP family. It’s great to have skills and talent recognised. Entering awards is a great way to showcase what we do. Make new connections and inspire our clients and people. Congratulations to all the other firms listed in the MTPI. It’s great to be listed with you.

It’s been hell of a year with award success. And we’re only in September. This summer we won Corporate Financier of the Year’ category at the HealthInvestor Awards. And named one of the overall Most Inspiring Workplaces in Europe.

Award wins are only part of the CP story. Our recently announced partnership with Waterland Private Equity means we’re targeting five-fold growth in the next five years. We’ll do this through a combination of organic growth and key acquisitions.”

You can see the full Accountancy Age MTPI here

Remember when the John Lewis business model of employee ownership was considered unusual and cutting edge?

Well now it’s not just big corporate businesses that are looking to change their ownership structures. More and more people are talking about employee ownership and more specifically Employee Ownership Trusts (EOT’s).

EOT’s are an HMRC approved structure that allows business owners to sell their business to a trust for the benefit of the entire employee base. This can be done at full market value and financed out of future profits of the business or raising 3rd party debt.

THE BENFITS

The reason some business owners consider selling their business to an EOT is because they want to access the tax benefits it can provide, being:

For obvious reasons, the above make EOT’s an attractive proposition for business owners, compared to more traditional succession structures such as a management buy-out or 3rd party sale. 0% tax on disposal, simplified sales process (i.e. no external 3rd party) and the ability to leave the business to those that helped build it.  It all sounds great.

However, despite what many in the market may advertise, EOT’s aren’t the magic one size fits all solution for everyone.  They need to align to the objectives of all stakeholders – shareholders, managers and employees – to be truly the right answer.

A sale to an EOT may be the right option for business owners.  Although the attractiveness of 0% tax should not sway business owners away from considering structures that may be a better commercial fit and all possibilities should be explored.

BUYER BEWARE!

There’s a lot more to EOTs, particularly around the governance that needs to be put in place.

EOT legislation is complex. Each case requires detailed planning and a tailored solution drawn up by qualified advisers. Adverse tax and legal consequences can arise if processes aren’t carefully followed – like the loss of the 0% relief! As such, professional advice should always be taken before implementing a sale to an EOT.

Talk to our experts to find out about EOTs or other options that might suit you and your business. Or if you want exclusive access to more insights why not join us at our show-stopping, knowledge-dropping, live and in-person FD events – in Birmingham or the East Midlands You’ll get to hear more about the other ways employers can minimise costs and maximise compliance.

P is for Plastic Packaging Tax. Q we struggled with so went with Quality of Air. Happy to take other suggestions. And R is for Reduce, Reuse and Recycle.

Lots of sectors use jargon. You’ll have heard of HMRC, PAYE,  VAT and Sustainability Audit  from the world of tax and accountancy. You may well have come across CSR. Though depending on the context it could stand for Corporate Spending Review or Corporate Social Responsibility.  

As we’ve embarked on our sustainability journey we’ve come across a whole new set of jargon, acronyms and phrases. Some might even say green gibberish. We couldn’t possibly comment. We were a bit nonplussed by some. Here we share some of what we’ve learnt.  

We’ll add more as we go along. Send us your suggestions for inclusion in our lexicon of sustainability and help us get us all the way to Z. We’re kicking off with the basics with A, B and C.

A is for: 

ARTICLE 6 

This is a highly complicated and technical part of the Paris Agreement, which essentially sets out the framework for voluntary global cooperation on trading emissions reductions – also referred to as international ‘carbon markets’ or in technical Article 6 language ‘Internationally Traded Emissions Outcomes’ – to enable countries to reduce their emissions and meet the pledges set out in their ‘Nationally Determined Contributions’ 

B is for: 

B Corp

Certified B Corps are for profit businesses united by one vision: to use business as a force for good. A ‘B Corp’ considers how their actions impacts their employees, clients, suppliers, community and the environment. Ultimately, B Corps work to build a more inclusive and sustainable economy for all. Here at CP we’re nearing towards achieving Certified B Corporation status. 

C is for: 

CARBON OFFSETTING

If you’ve ever booked flights online you’ll have been offered the chance to ‘offset’ your flights. The idea behind offsetting is that you’re ‘balancing’, ‘compensating’, or ‘neutralising’ the carbon emissions from those flights. Or a given activity by paying into a scheme or project that will reduce emissions somewhere else.  

Offsetting investments are made in environmental and climate restoration projects such as tree planting, or renewable energy development schemes around the world.  

Get in touch if you’re got any suggestions for words or phrases to include or that you’d like explained.

D is for: 

DIGITAL CARBON FOOTPRINT   

We’re all becoming more and more dependent upon technology. It was particularly the case during the Coronavirus pandemic which saw many of us having to work remotely. Some of us are now choosing to work from home and have changed our work habits making the most of technology.  

Whilst there are green benefits from working from home with less traffic on the roads there are still hidden environmental impacts from using technology. Sending emails, making video calls and  streaming music and films all have an impact. 

If the internet was a country, in terms of greenhouse gas emissions it would be the sixth largest polluter. These emissions can be split into four areas:  

E is for:

ESG – ENVIRONMENTAL, SOCIAL AND GOVERNANCE

Sustainability reporting involves the disclosure and communication of a company’s environmental, social and governance (ESG) goals, including the progress it has made towards them.

It demonstrates a commitment to sustainable development which, in turn, can boost internal and external stakeholder confidence and improve your company’s reputation.

Mandatory sustainability reporting for large companies is to be introduced by the EU under its Corporate Sustainability Reporting Directive (CSRD). It’s expected to be in place by 2023. The law will also affect non-EU registered businesses trading across the EU. You can read more about sustainability reporting here.

F is for:

FAIR TRADE

Fairtrade is a system of certification that aims to ensure a set of standards are met in the production and supply of a product or ingredient. For farmers and workers, Fairtrade means workers’ rights, safer working conditions and fairer pay. For shoppers it means high quality, ethically produced products. Find out more at Fairtrade

G is for

GREENHOUSE GASES

Are any gas that has the property of absorbing infrared radiation (net heat energy) emitted from Earth’s surface and reradiating it back to Earth’s surface, thus contributing to the greenhouse effect. Carbon dioxide, methane, and water vapour are the most important greenhouse gases.

GLOBAL REPORT INITIATIVE (GRI)

GRI is an international independent standards organisation that helps businesses, governments and other organizations understand and communicate their impacts on issues such as climate change, human rights and corruption. They have created a set of sustainability reporting standards that are widely used. Find out more here

H is for

HIGG INDEX

The Higg Index is a tool for the apparel and footwear industry to assess sustainability. The Higg Index is a tool for the apparel and footwear industry to assess sustainability throughout a product’s life cycle – from materials to end of life. Find out more here

I is for

IPCC

Stands for the Intergovernmental Panel on Climate Change. It is the United Nations body tasked with assessing and summarising all of the science relating to climate change on which governments at all levels base their decisions and climate policies on.

INTEGRATED REPORTING

Is an ideal tool with which to explore value creation. This voluntary direction of travel is focused on driving more authentic, comprehensive and meaningful information about all aspects of an organisation’s performance and value creation story delivering benefits for both internal and external stakeholders. Quite simply, Integrated Reporting is considered by many to be the future of corporate reporting.

J is for

JUST TRANSITION

The phrase “Just Transition” refers to decarbonising the economy fairly so that a green economy overcomes injustices experienced by all workers, ensuring no people or places are left behind.

K is for

KEY PERFORMANCE INDICATOR – KPI

KPIs are a type of performance measurement that indicate the success of an organization, usually within a particular activity (e.g., sustainability) in which they engage in. By identifying KPIs and measuring the KPIs through the lens of sustainability, businesses/companies can review what they need to work on, alter goals, and ensure that they are meeting these KPIs to continuously improve the company’s sustainability.

L is for

LAND JUSTICE

Land and water are vital infrastructure development, from agriculture to sanitation. Land justice is about the historic unequal distribution of land, and the extraction of resources and displacement of people from that land. Today’s land justice movement is focused on land ownership laws, communal space, rewilding, food sovereignty and housing in the UK and across the world.

LCA – Life cycle analysis

A holistic and strategy-oriented product policy that considers the entire life cycle of a product, from development, manufacturing, distribution and use to reuse or recycling. Henkel uses life cycle analyses to identify where the greatest environmental impacts occur in the different product categories. The results are used to define measures intended to achieve an overall improvement in the sustainability profile of the products.

M is for

MATERIALITY

Materiality is the process which supports a business to determine the relative importance of Environmental Social and Governance (ESG) issues. It is an evidence-based approach that enables a business to focus time and resource on what really matters, rather than everything all at once.

N is for

NET ZERO

Net zero should mean zero emissions are created from areas such as energy generation, buildings, surface and road transport. Net zero is about making the largest possible reductions that you can make to your overall footprint, using all of the means available to you.

O is for

OECD (Organisation for Economic Co-operation and Development)

The OECD is an international organisation that works to build better policies for better lives. Their goal is to shape policies that foster prosperity, equality, opportunity and well-being for all.

P is for

PLASTIC PACKAGING TAX

Plastic packaging tax is a new tax which aims to encourage businesses to use recycled plastic or other forms of materials to reduce plastic pollution. There could be implications for your business and an opportunity to apply for R&D Tax Credits. Find out more HERE

Q is for

QUALITY OF AIR

Up-to-date monitoring information about air quality in the UK is provided by the UK-AIR website. It’s hosted and maintained by Ricardo Energy & Environment on behalf of the UK Department for Environment, Food & Rural Affairs and the Devolved Administrations.

R is for

REDUCE, REUSE, RECYCLE

CP’s initial sustainability focus. We’re trying to be more conscious of the impact of our building facilities at Sky View, Birmingham and London. We’re having a massive drive on waste reduction and recycling by our people. Encouraging less use of plastics and paper for printing through to recycling paper cups. Though we encourage people to have reusable cups. Our use of tech along with our commitment to our work from anywhere anytime for ever policy – WFAAF has helped reduce travel to our offices.

 

Each September is when our main intake of young people who are at the start of their careers join us on our training programme. This week sees the latest round of intake of new graduates, placement students and school leavers.

We’re excited to welcome this latest intake of 64   future talent who are going to be the next generation of accountants and business advisers that will soon be working with our clients. They arrive mainly from schools, colleges and universities from across the Midlands. We also have a few who are changing their career path completely to start on the road to being a Chartered Accountant.

We’ve always been ambitious about growth. And now we have investment from Waterland we’re targeting five-fold growth in the next five years. We’re committed to attracting and developing the best talent in the sector.

Each year we attract more applications. This year builds on the 57 last year. 30% up from 2020.

This year, we had 1400 applications. Larger than our entire 450-person team. All 64 who were successful will now take part in our Launchpad programme which starts with two weeks intensive induction.

The new starters will be mentored by last year’s trainee intake, and then will do the same for next year’s students. The group will spend their time working in audit and business tax and where after a two-week induction on our culture and how we do things, they’ll begin working on real projects.

Samm Honeybell, Early Careers Recruitment Lead said:

“It’s fantastic to welcome this year’s new starters.  There were plenty of first day nerves on Tuesday, but they quickly developed into fun and laughter as they got to know each other and learnt more about CP.  Being able to help people achieve the opportunity they are striving for and then watch them grow and develop in their career is the definition of job satisfaction.”

This pool of future talent will be based at the CP offices in Birmingham, Sky View and London.

Concerns about sustainability and the future of the planet are high on the public’s agenda. Excess packaging has been an issue for years. Customers are becoming choosier about where to spend their money. Often not wanting to spend with companies who aren’t tackling sustainability issues, like packaging. Given the likely impact on their bottom line you’d think companies would be moving away from plastics and unsustainable materials. But you’d be wrong. So far less than 5% of liable businesses have registered for Plastic Packaging Tax.

WHAT THE RESEARCH SHOWS

Research by law firm Pinsent Masons show that less than 5% of liable business have registered for the tax.

The first Plastic Packaging Tax return was due on the 29th July, so any business that missed this deadline and is liable to register, may be hit with fines for non-payment and possibly late registration.

HMRC said they expected to raise around £235m from the levy, but it’s unlikely now considering the shortfall in registrations.

WHO NEEDS TO PAY PLASTIC PACKAGING TAX?

Plastic Packaging Tax was introduced with effect from 1st April 2022. it’s essentially a tax to try and help reduce the amount of single use plastic in business at a rate of £200 per tonne.

You need to register for the tax if you import or manufacture over 10 tonnes in a 12-month period, and then submit quarterly returns.

It affects more businesses than you think. Even if you don’t manufacture or import plastic yourself, you may still have Plastic Packaging Tax obligations under the legislation.

AFFECTED? WHAT DO YOU NEED TO DO

To avoid penalties, you should check whether you’re liable to register or to undertake any other requirements under the Plastic Packaging Tax legislation.

HMRC have said they are liaising with businesses to ensure they’re compliant with the Plastic Packaging legislation – we might see HMRC approaching businesses they would expect to be registered.

HMRC have provided lots of guidance and examples around the subject to help determine whether you need to register and outline your obligations. But, if you’re stuck, we’re here to help. Just send us an email or give us a call.