When is it time to speak to a professional?

In this episode of the talkBIG podcast, host Andrew Sykes is joined by a lineup of seasoned professionals from RSM, each bringing their unique expertise to the table. We explore the wide world of professional services to try to pinpoint when, exactly, it’s time to speak to a professional. 

People often try a very DIY approach to things, and sometimes that’s appropriate – for example: you don’t need an electrician to change your lightbulb but you should hire one if you’re rewiring your kitchen. In this episode, we explore the question from a business and personal finance perspective to determine the exact line in various professional and personal scenarios where consulting a professional is not just advisable, it's mandatory.

This episode is a treasure trove of knowledge for anyone seeking professional advice on a range of financial and business matters, from IPOs and wealth management to cyber security and R&D tax incentives. Tune in to gain valuable insights from these industry leaders and learn when it's time to call in the experts.

Thanks for listening! Visit the RSM Australia website to ask the hosts a question.

Chapters

• 0:00 Intro
• 2:00 When do you need an accountant to help with your tax return?
• 3:20 When do you need to see a professional to “go IPO”?
• 8:40 When should you consult with professionals regarding your family’s legal matters?
• 10:55 When do you need a financial adviser?
• 14:11 When is it time to reach out for professional assistance with raising capital – or funds-- for your business?
• 17:02 What are the signs you need to speak to an insolvency or bankruptcy adviser?
• 21:09 At what stage in the process should businesses be reaching out to an R&D tax specialist?
• 26:22 Who needs cyber security?
• 30:36 When you need professional support with your technology stack and digital services?
• 32:42 What is the difference between sustainability services and ESG services? And when you might need to consult with one of these professionals.
• 37:40 Outro

Transcript

Narrator: [00:00:00] Welcome to the RSM talkBIG Podcast. Helping you invest well, understand money and achieve the best tax outcomes. 

Andrew Sykes: Hello, and welcome back to RSM's talkBIG podcast. My name is Andrew Sykes, and I'll be your host as we talk about how to save, grow, and protect your wealth. We have just had the federal budget and discussed the implications of that from an economic and business perspective.

Andrew Sykes: But for today's episode, we're looking at the wide world of professional services to try and pinpoint when, exactly, it's time to speak to a professional. A lot of times people try a very DIY approach to things, and sometimes that's appropriate. For example, if you don't need an electrician to change your light bulb, you should definitely hire one if you're rewiring your kitchen. So today we're looking at that question from a business and [00:01:00] personal context to discover where exactly that line is in various professional and personal scenarios where consulting a professional isn't just advisable, it's imperative. Whether you're looking to raise capital, understand economic trends, navigate the labyrinth of R&D tax incentives, or even if you're facing the daunting prospect of bankruptcy, we have insights that could steer you in the right direction.

Andrew Sykes: We'll also touch on when to get professional support to service your software needs. And in an era where sustainability is key, we'll differentiate between climate adaptation services and ESG, and discuss when each one becomes essential. So sit back and lean in as we embark on a journey to demystify the world of professional services, and to help you identify when it's time to call in the experts.

Andrew Sykes: Let's get started.

Andrew Sykes: [00:02:00] Firstly, I'd like to tackle the obvious question myself. RSM is first and foremost an accounting firm. And one question we get asked a lot in personal life is, when do you need an accountant to help you with your tax return? Right. When do you speak to a professional to help you deal with your taxes?

Andrew Sykes: Because the reality is not everyone does, especially with income tax. And that's probably because most people think of tax services firms like RSM are really designed for business, not individuals. For most people, you don't really need an accountant to help you with your income tax, when you can just see the ATO service and you'll be fine.

Andrew Sykes: But once you get into more complex structures to manage your wealth and when you're running your own business and you're spending, say, let's, let's say more than four hours a week on managing your accounts or books, that's when it's time to [00:03:00] seek professionals. And they will help you not just with your tax compliance, but they can help you manage your payroll, improve your cashflow, help you set up the best business structures and overall, help you manage your business finances more effectively and set you up for future growth.

Andrew Sykes: Now, our first expert joining us today is actually going to be talking to us about one of those next steps you might consider for a business, which is taking your business public or going IPO. So I'd like you to introduce you to Andrew Clifford.

Andrew Sykes: He is one of the partners from RSM's Melbourne office and a seasoned professional with over two decades of experience in the realm of corporate finance. And one of the key services our corporate finance team provides is with capital markets and IPO support services. So Andrew, when do you [00:04:00] need to see a professional to go IPO?

Andrew Clifford: I'll probably start off with just outlining what an IPO is, just for the people that don't know. So so an IPO is an initial public offering, and that occurs when a private company decides to offer shares to the public and then list them and existing shares on a stock exchange, such as your Australian securities exchange, the ASX.

Andrew Clifford: So it's a significant step for a company, it comes with complexities, but going public or going IPO, as we like to call it in the RSM world does allow for wider investment opportunities, provides capital. It also provides liquidity for existing shareholders. So it gives them a market to be able to sell their shares.

Andrew Sykes: Okay. So in terms of seeking professional support for going public, does timing matter? 

Andrew Clifford: Yeah, well, timing definitely matters. [00:05:00] My view is the earlier, the better. As soon as you were thinking that an IPO

Andrew Clifford: or, pretty much any exit event, even if it's a sale, but an IPO is, it's kind of like a sale. You should seek professional advice. I think the key thing is really early on, you can speak to professionals and get a pre IPO assessment. So that's looking at the company's readiness. Because you are really looking to sell the company to the public or to institutions, if you're looking for sort of wider investment from pension funds and the like. I like to think of it

Andrew Clifford: similar to selling your house. Before you sell your house and put it on the market, what do you need to do? You need to paint the walls, fix up any cracks tidy up the garden. So similar to that with an IPO, you really want to get your company ready and get some advice about what are the key issues that an investor might look at and sort of what we need to get done so that when we do go move to the next step of the IPO and preparing the prospectus, [00:06:00] there's no surprises down the track. So some, some of those key things you might think about accounting, have you had your accounts audited? You'll generally need three years audits of your accounts before you go and prepare the prospectus and the requirements.

Andrew Clifford: And that three years of audit also covers any acquisitions that the company might've made in the previous 12 months. So you might then need to go back and have some audits done. Does the company have corporate governance policies in place? Does it have, a, sufficiently experienced board of directors or does it need some additional directors to meet listed public company requirements?

Andrew Clifford: Is the IP owned by the company? Is it securely owned? Have contracts been entered into to make sure sort of, it doesn't sit outside the company? Does it have customers and suppliers, the key customers sort of tied in with long term contracts? Is there any key personal risk that sort of they have to make sure they mitigate?[00:07:00] 

Andrew Clifford: So all those factors can get looked at early and so the professionals, accountants, lawyer, lawyers, brokers can all sort of input and provide that sort of advice to the company. And then that, that sort of then sets you up for the next step, which is the actual IPO which again, then has a raft of professional advisers that you'd need.

Andrew Clifford: So potentially you might have a lead adviser, just somebody to hold your hand through the process. You then have a lawyer to do the legal due diligence and also they generally would lead the whole process of preparing the prospectus and making sure that, everything within the prospectus has reasonable grounds to make sure that all directors and members of what's known as a due diligence committee have protection that they've taken reasonable steps when preparing the prospectus.

Andrew Clifford: You then need a lead manager broker / an underwriter to go out and find the investors, speak to institutions [00:08:00] and try and get the money that you're looking to raise. You would need an accountant, such as myself, to become the investigating accountant. They sign off on the numbers within the prospectus and also do a financial due diligence report on the company.

Andrew Clifford: And you might then need a prospectus drafting team and some additional directors to come on who have sort of ASX listed experience. So, so it's quite a process. There's quite a lot of advisers needed, but getting a good team on board and getting them on board early is generally means you would have a successful outcome.

Andrew Sykes: Okay, thank you for that, Andrew, and some great information there. Now, as part of your role at RSM and in corporate finance, I know you're also involved in a lot of due diligence and business valuations, and that you have some experience in performing valuations in family law matters. Andrew, can you tell me when [00:09:00] you would need to consult with professionals regarding your family's legal matters? 

Andrew Clifford: The tricky thing with family law, if you think after a split, it's very emotive and post split, there can be a lot of animosity and the business owning partner can sometimes start to try and play tricks to try to manipulate the results of the business to try and make it look like it might be worth less than it actually is, or had you valued it pre the split.

Andrew Clifford: So in that case, it's really important. Getting an independent valuer sort of who's accredited to do a business valuation to come in and have a critical look at both the business value and sort of also casting their eye over the books of the business, trying to work out whether there's any trends that might suggest there's been some manipulation by one of the partners and then going through the process of providing a business valuation.

Andrew Sykes: So how does that work? 

Andrew Clifford: So the way the process works in the family courts in [00:10:00] Australia is initially there will be a single expert that will be brought into the picture. And the aim of that single expert is to provide a business valuation that's sort of acting for both parties and the court, if the court is involved.

Andrew Clifford: And that single expert's got a duty to sort of, be independent and provide their best opinion and not be biased towards any of the parties involved. So it's really having an objective view based on the facts, based on what's been provided, to come up with their honest opinion of the business value, looking at whatever data is available and comparable transactions they can find.

Andrew Clifford: And so what's normal in the industry that they're looking at. 

Andrew Sykes: Thank you, Andrew. Now, obviously it's not just in times of upheaval or tension that you might need a professional to support you in your personal life. You also have financial advisers who can help you build and protect your wealth. Today I've got Rob Zammitt with us, and Rob is a [00:11:00] financial planner from our Perth team who aims to build financial security for his clients so they can enjoy the important things in life. So Rob, what's your take on this? When do you think someone has reached the point in their finances that they need to go out and speak to a professional? 

Robert Zammit: I find it quite interesting that people go to a doctor to get medical advice, they go to a mechanic to get their car fixed, yet when it comes to finances many people think that they can do it themselves.

Robert Zammit: We all lead busy lives and it takes a lot of time to be able to sift through all the information out there to work out whether their investment is appropriate and a good idea and if it's going to deliver to the promises that it has made to investors. People should see a financial adviser if they feel that they've got large incomes and surpluses and they don't know what they're doing with their income and need a bit of guidance on which way to direct it.

Robert Zammit: If they find that they've got investments that they've collected over the years and they've got reasonable balances and they haven't been reviewed. Or if they're starting to plan for retirement Or if they're [00:12:00] f need to make sure that they're on the right track. A lot of their later years. Once they've getting on top of it and are going to have surplus cash flow. Problem with financial advice is it can be very expensive and makes it unaffordable for younger generations who may need it the most.

Robert Zammit: And they might need to see a financial adviser to make sure that they've got the right insurances in place to protect themselves and their families in the event that they can't work due to sickness, injury or accident.. So a range of, there's a different range of circumstances that people should see a financial adviser.

Robert Zammit: Many financial advisers would be more than willing to have a chat with you and see if they can help. So pick up the phone, get the email and have a chat to your local adviser to see if they can be of any assistance. They'll point you in the right [00:13:00] direction and be open and honest with you if they can add any value to your situation.

Robert Zammit: So many times a financial adviser will see a client and it's, you know, been years and years that they've been earning a really, really high income, and the financial adviser says, well, what have you been doing with all of it? Where is the savings? And too many times we see people, they've spent it, they haven't saved any of it, and they're going to have to work longer and harder, to continue managing their lifestyle.

Robert Zammit: People on high income earners should engage with financial advisers early on to make sure that they are getting ahead in life, to make sure that they are making the most of those years that they are earning a high income. A financial adviser will be able to help you put a plan in place to squirrel away some of that surplus savings instead of maybe spending it every year, and to make sure that your mortgages, debts are paid off, and you do save money for retirement.

Andrew Sykes: Thank you for that, Rob. To your point about it being like a mechanic or a doctor, I [00:14:00] do think that many professional services fit along that vein, where it really is a good idea to get regular checkups. And that's true, whether for yourself or your business. Next up, we have Craig Amos from our corporate finance team over in Perth.

Andrew Sykes: Craig is well versed in capital raising and debt advisory. So Craig, when is it time to reach out for professional assistance with raising capital or funds for your business? And what kind of help is available? 

Craig Amos: Early stage businesses lots of things to do. If you're starting a business, you've got your business plan together.

Craig Amos: Hopefully seeing your accountant about your structure and off you go and you know what you're going to do. Invariably with most new businesses -small businesses, you, you've got to have to have a look at what your funding is going to look like for your first part. Most, most new businesses, it's the... it's the [00:15:00] bank of mom and dad or beg borrow steal for the first seed capital that you're going to need to get you going for the first six months, 12 months.

Craig Amos: So you need to have a bit of a think about where that's going to come from. And then depending on how quickly your business is growing and scaling you may have the need. To raise more capital. If you're growing quite rapidly, you might have to actually look at options like bringing in professional investors through a, through a sort of what they call in venture capital world, Series A, Series B type raisings and raise some equity.

Craig Amos: If you're getting up and running and you are... and you're making some profit, you might actually have access to, to, to debt, but it's, you need to engage a professional adviser to help you understand your funding situation and your sources of funding for the early stage of your business. So, so that, that help can typically be advising [00:16:00] somebody on what stage they're at.

Craig Amos: And what the typical sources of funding would be. So are they really early stage in which case debt won't be available to them. And they're really having to look at, angel investors or venture investors, friends, families, high net worths that are prepared to help them put equity in. So it's understanding if you're in, in that category, businesses that have been around a little bit longer and have a little bit track record of profits, they start being able to access debt.

Craig Amos: The early parts of that might be lenders that are happier to lend to slightly more newer and innovative companies like private debt funds. And all the way up to, you know, when your business is starting to become a little bit mature, traditional bank finance. So your, your, your, your professional adviser, your financial adviser should be able to help you understand where you are on that life cycle and who you should [00:17:00] approach and your, and your, and your prospects.

Andrew Sykes: Thank you, Craig. Even though getting loans and managing debt can help you start a business, or help you stay afloat in business, and in life, sometimes things take a turn for the worse. If that happens, you might have to think about insolvency or bankruptcy. If you're in that situation, it is important to seek professional advice as soon as possible to prevent things from getting worse.

Andrew Sykes: So how do you know when it's time to talk to a bankruptcy adviser? I have one of our restructuring and recovery experts here, Andrew Bowcher, who joins us from our Wagga office with some signs to look out for. Andrew, what are the signs you need to speak to an insolvency or bankruptcy adviser? 

Andrew Bowcher: Bankruptcy is for an individual, and it can be an individual who has personal debt, [00:18:00] or they may trade as their self in their own name with a business or be in a partnership with someone.

Andrew Bowcher: So for an example, if an individual is struggling... if you're finding that you're increasing your credit cards, borrowing from payday lenders, having trouble paying those loans off, having trouble putting food on the table, servicing your mortgage, paying everyday expenses, even skipping meals, those type of things, you do need to actually talk to someone.

Andrew Bowcher: So that's example one. 

Andrew Sykes: Okay, so that's for an individual facing bankruptcy. What about when it's a business facing insolvency? 

Andrew Bowcher: If you have a business, whether it's you trading as a sole trader in a partnership, if you are finding that you're struggling to pay your tax; you've got a large tax bill, you're unable to pay your staff, unable to pay your creditors, those people who are lending you money or providing [00:19:00] a product for you to sell in your business.

Andrew Bowcher: That's when you need to talk to someone. Any of these particular examples, what we would do is sit down, work out the total assets, your total liabilities, and then look at how you may be able to service those debts. And then also see what options may exist. And those options can exist. Some of those options may be yes, going bankrupt or trying to enter into a formal or an informal arrangement with your creditors.

Andrew Sykes: Right. And are there any common signs or things that can happen that signal that this is occurring? 

Andrew Bowcher: There's no particular one thing, but what we find a lot of times can be a relationship and marriage breakdown. Can be that there might be a change happening in the industry you may have your business in. Interest rate rises.

Andrew Bowcher: Asset values, which may have fallen, [00:20:00] for an example, is you've purchased a property and the property is worth less than what you borrowed it for, or, we also are seeing where the cost of living, or even if you have a business, the cost of running that business, for an example, is increasing superannuation for staff, electricity costs, input costs like your suppliers. 

Andrew Bowcher: All those costs are increasing and therefore that's putting pressure on the business and the cash flow or as an individual putting pressure on you to service your individual debts. 

Andrew Sykes: So that goes back to that cost of business and it becoming just too high. Thank you, Andrew. And to any of our listeners who may be struggling at the moment, please reach out to your closest RSM office or your local adviser, whoever that may be.

Andrew Sykes: It's okay to need support, and if we go back to that analogy from Rob earlier, it's better to go early for a [00:21:00] checkup and get that wheel alignment or whatever you need, than to wait for things to get worse and end up losing your whole car. Our next guests are experts in all things R&D, as part of RSM's specialised R&D tax incentive team.

Andrew Sykes: I have the lovely Jess Olivier, RSM's and Rita Choueri, who is our National Director in Life Sciences. Tax breaks for R&D, or research and development, can be a really great option for businesses looking to boost some cash flow and stay in the black. Obviously this is only an option for business who are conducting some sort of research.

Andrew Sykes: So my question is, at what stage in the whole process should business be reaching out to R&D tax specialists? 

Jessica Oliver: The R&D claim process is retrospective but obviously ideally be thinking about these types of [00:22:00] things proactively and up front. It's much easier to put in the appropriate governance processes documentation, et cetera, whilst you're doing the R&D or whilst you're even thinking about the R&D, as opposed to thinking about it a year later and collating the information you've prepared and stored to date.

Jessica Oliver: So, I guess, ideally, when you're thinking about investing money in new equipment, new procedures, new manufacturing processes, new products, then yeah.

Rita Choueiri: So I I guess a company should reach out to an R&D tax incentive consultant basically as soon as they've got an idea for an R&D activity or an R&D project because at that point of time, the R&D consultant can help them document their idea.

Rita Choueiri: And enable them to understand whether it's going to be eligible or not eligible for the R&D Tax Incentive because it's very important to keep contemporaneous documentation in place as you are undertaking the R&D activities. An R&D consultant also is basically the conduit [00:23:00] between, you know, the R&D or the science and engineering and the tax law.

Rita Choueiri: So an R&D consultant can assist a company to frame its activities in a way that's going to be eligible for the R&D tax incentive. I suppose from an R&D perspective it's critical to 

Jessica Oliver: document the technical risk that you're about to take, why are you going to develop this new product or process, or why are you making improvements to an existing product.

Jessica Oliver: What's the uncertainty that you're setting out to overcome through your R&D procedures or your R&D experiments? So, yeah, ideally, it's something you're thinking about in real time and even before the event so that we can help, help you to appropriately capture and document what you're doing. Which makes for a much easier R&D claim process down the track once the once the deadline's due.

Andrew Sykes: So you're helping with some of the science part as well? 

Rita Choueiri: Yeah, so applying the scientific method basically to the work that they're already doing. And sometimes it's those simple tweaks that [00:24:00] enables them to be either eligible or ineligible. So, sometimes if you're just undertaking a development, it's not necessarily experimental by nature, it's just developing something step by step so just enabling them to understand that scientific process.

Andrew Sykes: So that's on the R&D side of things. What sort of assistance do you offer on the business end? 

Jessica Oliver: Obviously one of the things is to be appropriately structured as a business for the R&D tax incentive. As an example, trusts typically can't claim or sole traders, so. Yeah, absolutely. Again, talking to your adviser up front about what you're intending to do, whether you're, whether you've got the relevant structure in place to claim is really important.

Jessica Oliver: We have, we send out grant alerts when new programs are available and then, yeah, making sure that you, the right people are advising you to make, help you make a claim. Hopefully get some funding, whether it be through tax credits, grants, et cetera. 

Andrew Sykes: So would you say that some of the value that an adviser brings is keeping you informed on that side of things, like [00:25:00] those opportunities?

Jessica Oliver: We, we know your business inside out. We know our clients inside out. So we'd like to think that across the firm, not only within my team, but your, your, the other advisers within RSM know, know what's available for you. will reach out to us to help you. And certainly, yeah, it's, it's knowing what's there and being prepared.

Jessica Oliver: And we don't, you know, it's hard to be across everything, as I said, running a staff, it's, is a time consuming business and it's swept up in the day to day. So it's very hard to have the time and the energy and resources to devote to a grant application or to the R&D claim preparation process. The other thing to mention is that for those companies that might be eligible for the R&D Tax Incentive and all.

Jessica Oliver: There are, there are financiers out there, third party financiers who will look at financing those types of things up front to give you some cash a bit quicker. They might not be the cheapest form of finance, but obviously sometimes just waiting for that whole grant application process to be reviewed and paid out or lodging an R&D claim, waiting for that to be processed by the [00:26:00] ATO can take some time.

Jessica Oliver: So there are options out there. 

Andrew Sykes: That's a great point as well, and speaks to the value that your adviser brings, particularly where they know the options and you don't need to wait until the last minute or until you're feeling desperate. Just reach out. We promise RSM advisers don't bite. Thank you, Jess and Rita.

Andrew Sykes: And you'll probably notice a theme from our experts this episode, that it's better to speak to a professional early rather than late. One of the areas where the risk of waiting too long gets very, very dangerous for both businesses and individuals with significant wealth or assets is, of course, cyber security.

Andrew Sykes: Joining us today to talk a little bit about that, we have Ashwin Pal. Ashwin is a partner in our cyber security area and an expert with extensive experience. He currently works in our risk advisory division here at RSM and he's [00:27:00] recognised for his strategic approach to cyber risk management and has been honoured as one of the global top 100 leaders in information security.

Andrew Sykes: So Ashwin, who needs cyber security? 

Ashwin Pal: When it comes to cyber security, the, the issue I guess you have is everybody needs it. So you've gotta look at organisations or the size of the organisation in turn. So you've got the small organisations, and then you've actually got the medium organisations, and you've got the very large organisations as well.

Ashwin Pal: If you look at the, and, and trust me, every single one is targeted equally. And at the moment, the, the statistics on breaches is actually reported according to size as well. The smaller organisations. tend to have lower resources in-house. In fact, a lot of them don't have any resources. So the best approach for them would be to actually get expert help.

Ashwin Pal: Get help from cyber security experts, who can [00:28:00] effectively understand the risk that they're actually exposed to, their vulnerabilities and actually help plug the gap, so to speak. It won't be any different to how a small business would go to say an accounting firm to actually get accounting and business advisory services.

Ashwin Pal: The next tier are obviously the mid sized organisations who may have one or two professionals internally. Now, with those, what we actually find is a capacity issue for sure. And in some cases, there may be a capability issue as well. Again, it's important for them to actually understand where those gaps in terms of capacity as well as capability exist.

Ashwin Pal: Reach out to the to, you know, our sourced firms to actually try and plug those gaps. So they don't in turn actually have gaps within their environment. And finally, the larger organisations, they will tend to actually have quite large teams internally - and where we tend to engage with them are very specialised skills, which they [00:29:00] may actually not have internally. Or if they actually have multiple projects running where they simply don't have the bandwidth to be able to address those. Where we can effectively act as part of their team.

Ashwin Pal: So each organisation will have different needs depending on their size. 

Ashwin Pal: So 

Andrew Sykes: is it just business that needs cyber security or are individuals at risk as well? 

Ashwin Pal: And of course sitting on top of that would be what we call high net worth individuals who obviously carry a degree of risk because they have assets that may be actually at risk. For those individuals, it's important to actually understand you know, what is at risk? What type of risks that they're actually exposed to? That's going to be different to a business. What we have seen a lot of recently is what you call business email compromise, where they may be tricked into, you know sending money you know, to, to, to a hacker who may be pretending [00:30:00] to be one of their suppliers and things like that.

Ashwin Pal: So, yes, it's, it's about working with these folks, helping them understand what risks they're actually exposed to and then putting in, educating them against those risks and then putting in specific solutions such as email and web filtering who may, that, and tools and technologies that actually may be able to help them pick any attempts to try and you know, hack them.

Andrew Sykes: Thank you for that Ashwin. Whether it's your business or personal finances, the damage that can be done by a hacker is frightening stuff. It really does pay to be protected. So Laurel, can you tell me when you need professional support with your technology stack and digital services? 

Laurel Grey: It's always a really hard decision to know when to reach out for help around technology, especially since you can go online and Google so many great options and sign up for free trials.

The big differentiator of knowing when you should reach out and get support [00:31:00] from a business like RSM is dependent on what level of comfort you and your business need. If you know you've got board reporting or some senior executive stakeholders that need to be bought into the decision making around picking the right software, planning out the right IT roadmap, or actually implementing the right software solution, then a professional services provider can help you step back. And make that decision objectively.

Laurel Grey: Basically by adding evaluation criteria and a really clear concrete process over the top so that you meet the exact requirements of the stakeholders that are going to be signing off on the decision. We service a range of businesses from sole traders up to large corporates and government agencies as well, so there really is no limit around being too small for using RSM services around technology. It's really dependent [00:32:00] on how much time is it going to take for you or your team to do the right research and ensure that you're going to get a great outcome. So even if you're a sole trader or you run a small business with maybe 10 or 20 people, if it's going to take you longer to go back and do the research and get all the validation that you need to make the right decision, then it could be a good opportunity to reach out.

Laurel Grey: And we don't always have to quote on a big project basis. Sometimes just getting an hour with someone in the team to bounce ideas off of and get that level of comfort can be enough. 

Andrew Sykes: Thank you, Laurel, for those insights on managing those digital transformations. Now, let's switch gears and talk about another topic that is becoming increasingly important for businesses of all sizes and sectors, ESG.

Andrew Sykes: To answer all our questions about ESG strategy and reporting, we have Linda Romanovska, one of our [00:33:00] leaders of our ESG and sustainability services training. So, Linda, can you tell me a bit more about the difference between sustainability services and ESG services? And when might you need to consult with one of these professionals?

Linda Romanovska: When do we need to talk to an ESG expert versus when do we need to talk to a sustainability expert or perhaps someone more specialised such as adaptation expert? That is a really good question and a lot of people get really confused around the variety of different terms that are being used in this area.

Linda Romanovska: To ease the understanding and help you understand on what these different terms mean and how they're used today, I will go a little bit in the history of how they emerged. Let's start with the term sustainability. The term sustainability is not a new term. It really arose in a series of events organised by the United Nations, starting from the very early eighties.

Linda Romanovska: In the early eighties, we had the Brandtland Commission that published a report called 'Our Common Future' in the late [00:34:00] eighties. And this is where the conceptual thinking about what sustainable development for the world means and what aspects of that development would need to be in place to ensure that development really is long term and maintainable in the near and further future.

Linda Romanovska: As a result of that report, also, that fed into the Rio conference in the early 90s, which is also where the beginnings of some of the current international agreements on climate change and biodiversity stemmed from. So, it was the series of events, series of reports that cemented the understanding of what sustainable development is, and that was in the development context, and that relied on 3 pillars.

Linda Romanovska: For development to really be sustainable. It has to be financially, economically sustainable. It has to be environmentally sustainable and socially sustainable. And then it's in that intersection of these three pillars where the true sustainability lies. And so that was really applied to a really broad world level, world development [00:35:00] level context.

Linda Romanovska: And then. The question is, how do we translate that into the business context and more local individual entity context? And that's where various terms come into play, such as ESG. So ESG, in essence, is a way to adopt the concept of sustainability to the business concept. And it's also a bit more precise way of describing of what we are focusing on.

Linda Romanovska: When we talk about sustainability in a private sector context. 

Andrew Sykes: Okay, so just for our audience who may not have heard the term, what does ESG mean? 

Linda Romanovska: So E stands for environment, S stands for social, and G stands for governance, as these are the main issues that we would be focusing on when we work on sustainability in a company.

Linda Romanovska: There are some other terms that have been in play in the recent years and decades, such as corporate social responsibility. Those have somewhat gone out of fashion, perhaps because they couldn't be misunderstood as social responsibility, did extend also to environment, and now we're a bit more [00:36:00] precise in how we name these things.

Linda Romanovska: In reality, the terms ESG and sustainability are used interchangeably. So, when you're looking for advice on your sustainability or ESG... these terms do not really matter. Either one will do. And either expert, if they call them ESG expert, they're also a sustainability expert and vice versa. Now, when you want something a bit more specialised and you want to work on a specific topic within sustainability or specific topic in E, S, or G, this is where you would want to look for more specialised experts.

Linda Romanovska: And that's where adaptation expert would come in because that expert would primarily be focusing on helping you to work on adapting to climate change, which means adapting to the climate change risks that you may be experiencing or are anticipating to experience in the future. 

Andrew Sykes: Thank you, Linda, for that bit of history and for sharing your insights and expertise with us today.

Andrew Sykes: So I hope everyone listening learned a few things about when you need different professional services. And if you walk [00:37:00] away with one lesson learned, I hope that it's to remember that the earlier the call, the better. Call or email, just talk to an adviser, talk about your situation and take advantage of the knowledge and expertise available.

Andrew Sykes: We are, after all, here to help. 

Andrew Sykes: That's all for this episode of talkBIG, the podcast where we explore the big challenges and opportunities in business and in life to help you save, create, and protect wealth. If you enjoyed this episode, please subscribe to our show on your favorite podcast platform and leave us a rating or a review.

Andrew Sykes: You can also visit our website rsm.com.au/talkbig to find more episodes and articles relating to our topics. As always, we'd love to hear from you, so feel free to share your feedback, questions, or [00:38:00] suggestions with us. 

Andrew Sykes: Thank you for listening, and until next time, stay curious and keep learning.

Andrew Sykes: talkBIG:

Narrator: create, save, and protect with RSM.