The Sustainability Commodity
When I saw Sunday’s New York Times article on eco-concierges—consultants who advise consumers on how to make their homes and lifestyle more environmentally-friendly—I did a double take. At a time when so many consumers are facing economic uncertainty, how can anyone afford to pay someone to tell them which recycled paper towels to buy? As it turns out, there’s more to it than that.
Consumers are not only looking for guidance on how to be more environmentally conscious, they are also looking at many products that provide cost savings, whether immediately upon purchase (cheaper, chemical-free cleaning supplies, for instance), or over the long haul (like investing in more energy-efficient appliances or vehicles). The subtext here is that consumers are increasingly concerned about the part they play in the environment, and are making affordable purchases accordingly. At the same time, they are holding businesses, services and governments accountable for the part they play in the environment as well.
Hiring eco-concierges may be the trend among some consumers, but CPA involvement in accounting for sustainability isn’t just a trend—it is, and will continue to be, a competitive requirement. Consumers are going to demand to know more about the businesses with whom they spend their money. They are going to want to know what the real cost of a pair of sneakers is—from the refining of the rubber for the sole, to the water needed to prepare the fabric dye, to the effects of the plume of smoke produced in the manufacturing process, to the recyclability of the packaging. Small and medium-sized businesses who are on the cutting edge of accounting for sustainability know that in addition to monitoring strategy and financial performance, understanding their company’s use of raw materials and natural resources and their impact on the environment, is essential to day-to-day operations.
For CPAs, this isn’t about filling Erin Brokovich’s shoes, it’s about striving for better business practices, setting long-term goals and driving success. It’s about helping businesses be resource efficient, cost-effective, environmentally conscious and build a consumer and community-friendly reputation, which carries a lot of weight—as the Times article indicates—and makes businesses more competitive. Finally, it’s about understanding the social, economic and environmental impacts of doing business.
CPAs are the professionals who will be advising on this issue, assuring businesses are participating in sound corporate citizenship, building corporate recognition and improving profitability. That, as we know, is the bottom line.
Want to find out more about how you can help businesses, especially those small and medium-sized, play a stronger role in accounting for sustainability? Read the joint AICPA, Chartered Institute of Management Accountants and Canadian Institute of Chartered Accountants report: SMEs Set Their Sights on Sustainability, which provides nine case studies of small and medium-sized enterprises in the U.S., U.K. and Canada.
Carol Scott, CPA, Vice President - Business, Industry and Government, American Institute of CPAs.