Can Quickbooks Address Climate Change? Part Two
(And Why This Matters to a Producer Like Me)
In my last blog on this topic, I suggested that financial transactions could help small businesses and individuals learn new behaviors to become more environmentally sustainable. There’s often a gap between the story we tell ourselves about our lives, and the reality. Because financial transactions are concrete, they can expose this gap, and show a path towards better choices.
While carbon emissions are REALLY difficult to measure, some tools are emerging.
If you go to Google and type in “measure my carbon footprint,” you will find a host of carbon calculators and consulting companies that can measure your carbon footprint. Most of them require you to manually calculate your estimated carbon footprint. Those that are software, are generally stand-alone software or subscriptions. The one that I have enjoyed using the most is found here.
That same company, Doconomy, has also developed a database of financial transactions. Using their Mastercard, the DO Card, you can see the estimated carbon footprint of every single financial transaction you make with the card.
If the data for transactions like this is increasingly available (and likely getting more accurate all the time), then it should be small step from tools like the carbon calculators and the DO Card to carbon dashboards embedded within the financial tools we already use: Quickbooks, Mint, Expensify, Bill.com and Chase.com.
Will this happen?
My own peculiar background as both a TV and commercial producer as well as the CFO of a small company has led me to this rather specific solution to climate change. I see that there is a HUGE gap between the facts we know about climate, and the behaviors–and even sometimes policies–that we advocate for. In some ways, I think the types of accounting tools I’m advocating for are inevitable. What is important is that they are developed in a way that helps all people to make better decisions about their impact.
On March 21, 2022, the SEC proposed new rules for public companies to disclose climate risks. While these would not affect small businesses or individuals, they could both standardize the data related to carbon footprint, and make accounting for it much easier since it may be required at a massive scale. Once the data exists, then suddenly incentive programs could become a lot more meaningful.
While a simple tax on carbon, or, an incentive program related to improving sustainability on a government scale would be helpful, the more immediate nudge for companies may be in consumer sentiment. Edelman’s most recent consumer trust report, finds that a majority of Gen Z:
- Are willing to change their buying behaviors based on values.
- Increasingly want to see a company’s values instantiated at the point of purchase.
- Have changed their buying behaviors in the last few years because of a company’s climate response.
- Disproportionately affect the buying behaviors of the older generations.
If consumers had a concrete, easy way to choose between one product with a high carbon footprint and another with a low carbon footprint, a very real financial incentive emerges. Right now, those choices are emotional, and perhaps more rooted in a company's branding than the actual facts. With the kind of accounting tools that I’m proposing, a consumer could develop a much more nuanced and accurate understanding of the way in which carbon is generated by their activities. It would change their buying behavior. It would change how they talk and think about sustainability.
In Conclusion
Accounting has been an indispensable tool for groups of people and complex systems to understand and change their behavior. It is a fundamental tool for creating change. If companies like Intuit and Expensify are serious about their climate commitments, I would like to see them use the tools already at their disposal to create insight and learning for small businesses and individuals. With 70% of US GDP consumer spending and 44% of US economic activity enabled by small businesses, the impact of these tools would be enormous.
