Stakeholders Invested in Sustainable Business Practices

Have you seen the CGMA Report “Thirsty Planet”? The report expertly underscores the need for businesses to consider social and environmental sustainability as a means to sustain business. Ensuring that natural resources, such as water, are safe and clean for future generations, communities and businesses to come should be a priority for businesses. 

A sustainable enterprise has a clear strategy not only on how it will make money, but also on its social and environmental impact. An organization’s ability to create and preserve value for itself, its stakeholders and society at large, depends on the strength of its business model;  the sustainability of the financial, social, economic and environmental systems within which it operates; as well as on the quality of its relationships with, and assessments and decisions by, its stakeholders.  Businesses need to consider environmental and social impacts in order to have a genuinely sustainable business that makes money—not just because it is the right thing to do, but also because it makes good business sense. 

Integrated Reporting Essential for Useful Business Reporting

The current model for financial reporting has long been under discussion; investors and other stakeholders want more than a historical look back and one that only focuses on financial measures. They want to see the value companies create through intangible assets too.  Part of the solution is integrated reporting, which provides a holistic presentation of data and brings together the many disparate reports that organizations provide (as opposed to being an add-on to existing reports).

4 Reasons CFOs Should Care about Integrated Reporting

On Nov. 15, the AICPA organized a roundtable discussion for the International Integrated Reporting Committee at SAP’s headquarters in Palo Alto, Calif. I attended the meeting along with representatives from major investors, companies and other stakeholders. It allowed us the opportunity to discuss the business case for integrated reporting, and the challenges surrounding the acceptance of this critical reporting framework. Among those challenges is communicating the benefits of integrated reporting to businesses and their stakeholders, especially CFOs.

Why should you care about integrated reporting?

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.

In the News: PCGAAP, Accounting Jobs, Sustainability

Happy Friday, dear readers – it has been a while. My weekly news wrap up post will now appear bi-weekly, with a post which spotlights interesting content from around the web appearing on alternate weeks. Should you want more frequent updates of news related to the accounting profession, please consider following AICPA Media Relations on Twitter @AICPANews or subscribing to the Media Relations RSS feed.

Now let’s get to the news, shall we?

One of, if not the most, pressing issues facing the accounting profession is the debate over the creation of separate reporting standards for private companies. The chorus of voices on one side of the issue got a lot louder this week with the announcement that thirty-three state CPA societies have joined the AICPA in calling upon the Financial Accounting Foundation to create a separate standard setting board for privately held companies. Michael Cohn of Accounting Today writes that AICPA advocates a separate board for private company accounting standards independent of the Financial Accounting Standards Board, under the oversight of the FAF. AICPA Chairman Paul Stahlin, CPA, said “after over 30 years of research by numerous diverse and independent groups, the only conclusion is that an autonomous standard-setting body under FAF to set differential standards for privately held companies must be created.”

Integrated Reporting Framework in the Profession’s Future

At the end of June, I had the pleasure of attending the International Integrated Reporting Committee (IIRC) Roundtable meeting at the Bloomberg global headquarters in New York. What a great event!

Business leaders from corporate, investor, standard-setting and regulatory communities sat down to discuss opportunities for creating a business reporting model that links environmental, social and governance (ESG) reporting to mainstream reporting. This integrated framework would then give investors and the public more comprehensive information on how organizations use their resources and perform over the long term.