Sustainability: The CPA's Role

Source: AICPA CPA Insider

The following includes excerpts, reproduced with permission, from an article by Kenneth Witt, CPA.

A recent AICPA-, CIMA- and CICA-released survey report shows that though the finance function's involvement in corporate sustainability initiatives is highly valued in some leading organizations, it remains limited.

While compliance is the most common driver for sustainability initiatives in both large and small companies, cost-cutting and efficiency ranked second among smaller companies, and managing reputational risk ranked second as the most significant driver of sustainability efforts among larger companies responding to the AICPA/CIMA/CICA survey.

In addition to looking for cost savings and efficiencies, consumers and business customers are increasingly looking to products and companies that are environmentally and socially responsible, creating upside revenue opportunities and driving job creation for companies embarking on the sustainability path.

In addition to cost-cutting, efficiency, and risk management, CPAs can play an important role in other aspects of accounting for sustainability. Companies look to CPAs to provide analysis of the business case and investment return calculations, and to develop and monitor performance measures or key performance indicators (KPIs) for important sustainability metrics. Providing objective analysis and measurement of sustainability elements – like energy usage, recycling or other solid-waste reductions, employee well-being progress and greenhouse gas emissions inventories – are critical skills that CPAs can bring, especially to companies that provide external-sustainability reports.

One recent development in the world of sustainability and business reporting that will likely have significant impact on the role of the CPA is the evolution of integrated reporting. In 2010, the Prince's Accounting for Sustainability Project (A4S) and the Global Reporting Initiative (GRI) formed the International Integrated Reporting Committee (IIRC) to oversee the creation of a globally accepted integrated-reporting framework that would connect financial and sustainability reporting.

For the complete article, read “What Do CPAs Have to Do With Sustainability?”

From AICPA CPA Insider, July 18, 2011, www.CPA2biz.com.