CPAs Wanted for Lead Role in Sustainability
If there’s one realism that has emerged since it first appeared on the leadership front more than 30 years ago, it’s that sustainability is neither a passing fad nor a fleeting priority. Time has proven that a focus on sustainability initiatives, linked to business strategy, as a top organization priority, can deliver measureable bottom-line and reputational returns far beyond initial expectations.
Growth in Scope and Value
As with many emerging business initiatives, sustainability’s story can best be told through the numbers. A recent EY survey, conducted in cooperation with GreenBiz Group, polled executives and thought leaders in corporate environmental strategy and performance and found that 80 percent of respondents believe the possibility of capitalizing on new revenue opportunities will drive their organizations’ sustainability initiatives. And 66 percent have seen an increase in inquiries about sustainability-related issues from investors and shareholders in the past 12 months.
It’s not just the IBMs, Dells and Yahoos! of the world that are working sustainably and reaping financial and marketplace rewards for doing so. Other organizations ranging from insurance companies to doctors’ offices are all realizing the value of sustainability initiatives linked to business strategy and are changing their policies, processes and mindset so that they can be successful. Even an industry that’s been as conflicted with sustainability as mining has
raised its environmental consciousness and recognizes the value of the triple bottom line: financial prosperity, environmental stewardship and social responsibility.
The CPA’s Role
Sustainability’s rise to such a level of visibility and focus didn’t happen overnight. In fact, it would likely have never happened at all without the concerted effort of a diverse group of professionals that include management and communications consultants, non-governmental organizations NGOs), lobbyists and government agencies as well as consumers. However, also included in this group, but noticeably underrepresented, are CPAs, who are among the most qualified to help organizations fully realize the benefits of sustainability.
CPAs should own this market. Sustainability is best achieved when it’s linked directly to business strategy and enterprise risk management as part of a broader accounting for what we refer to as the sustainability cycle. The cycle moves from internal sustainability initiatives tied to strategic objectives, to stakeholder engagement based in part on formal reporting with assurance.
As financial and nonfinancial experts widely recognized in core areas of the sustainability cycle—risk management, assurance, reporting, controls, performance measurement and independence—CPAs can make invaluable contributions across the cycle’s different phases that help make the link to strategy and ERM. Chief among their contributions are accounting for, reporting on and
obtaining assurance for sustainability activities. When necessary, CPAs can partner with subject-matter experts including operations team members, engineers, scientists and government agencies.
What follows are business sustainability efforts that positively affect efficiency, revenues from products and services, stakeholder and shareholder interests, and ultimately, the creation of both short- and long-term value, for the organization and shareholders.
Opportunities and Benefits
Accounting for sustainable activities does more than deliver greater value to the organization. It also puts significant opportunities in front of CPAs in both public accounting and in business and industry. Opportunities include a higher professional profile for them, their organization and the CPA profession; foothold in a booming service area; revenue growth; broader professional development opportunities; and an enhanced image and brand before clients, C-suite executives and boards of directors.
This environment of opportunity and growth is sending a clear and distinct message to CPAs: fully understand the diverse range of skills you can bring to the sustainability cycle, and proactively position yourself before senior leaders and other decision-makers as a valued team member and contributor to the cycle.
CPAs need to seize these opportunities and make sustainability a valued service offering and leadership priority for their firm or organization.
Are you looking for guidance in these areas? The AICPA has developed several webcasts to get you started. They include How Accountants Can Add Value to Sustainability Activities, part of the AICPA Insights Live webcast series, to be held 1 to 2 p.m. ET on Nov. 1, and Improving Controls Over Sustainability Disclosures and Other Non-Financial Information, 2 to 3 p.m. ET on Nov. 6.
For additional information and resources, and to find the latest thought leadership on sustainability, including the new whitepaper Accounting for the Sustainability Cycle: How the Accounting Profession Can Add Value to Sustainability-Oriented Activities, please visit the Sustainability Reporting and Assurance homepage.
Brian Ballou, Ph.D., CPA, EY Professor of Accountancy and Dan Heitger, Ph.D., Deloitte Professor of Accountancy. Brian and Dan are co-directors of the Center for Business Excellence with the Farmer School of Business at Miami University in Ohio.