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Think sustainability’s unsustainable? Think again.

IStock-614011264As a CPA, you build strong relationships with your small business clients, so you’re not surprised when one of your clients, who is running a startup, asks for a meeting to talk about her goals for the coming year and beyond. She is looking to enable growth by attracting new investors, to continue recruiting quality talent and to differentiate the company in the marketplace by giving it a competitive edge going forward. You want to help, but where do you start?

Rethinking the business  

While such goals can sometimes seem daunting, you know that there are simple steps she can take to improve her chances of achieving all three: Make changes that ensure her company is operating in a sustainable manner. There are some direct results of embracing greater sustainability. These include fostering innovation, driving financial performance and improving risk management, according to a Harvard Business Review article. Other benefits include improved brand image, greater appeal to employees and investors and increased ability to comply with regulations. 

Have your clients already raised questions about environmental, social or governance matters i.e., sustainability concerns? If they haven’t, you should be prepared to hear more on this topic as interest increases. There are two main suggestions you can make to clients to get them thinking about the importance of sustainability.  

Consider what sustainability can do for you. Your clients may not be aware of the benefits that sustainability can offer, or they may think this is a topic that only applies to much larger organizations. CPAs can take the opportunity to bring it up when:

  • A client is moving locations. Moving into or building a greener site may help them enhance profitability and productivity. For example, a manufacturer may cut costs by lowering energy or water use or by reducing reliance on toxic chemicals, thereby improving environmental conditions.
  • A client is seeking to enhance risk management. With the increasing prevalence and severity of environmental, social and governance (ESG) related risks, ranging from product safety recalls to extreme weather events, managing ESG-related risks and opportunities is critical to enhancing organizations’ resiliency. The Committee of Sponsoring Organizations of the Treadway Commission (COSO) and the World Business Council for Sustainable Development recently released guidance intended to bring ESG risks into clearer focus for businesses and organizations.
  • A client is seeking funding. Many investors and venture capital firms focus specifically on green businesses or prefer to work with organizations that demonstrate an understanding of environmental, social and governance concerns. They consider sustainability important to long-term financial performance.
  • A client wants a competitive edge in a crowded market. Once again, a commitment to business practices that acknowledge sustainable issues is likely to appeal to many workers, companies and potential investors.

Become a B Corp.  Don’t know what a B Corporation is? Over 2,500 corporations in more than 50 countries have decided to expand their business purpose beyond maximizing short term profits. Their business models are intentionally designed to create a positive social or environmental impact. They’re all for-profit companies that have been certified by the nonprofit B Lab because they’ve met high standards of social and environmental performance, accountability and transparency.

CPAs are well qualified to work with companies becoming B Corps because many of the areas assessed involve good business practices. You can, for example:

  • Help them prepare a required Impact Assessment.
  • Develop a work plan to address identified areas for improvement and implement process improvements.
  • Prepare external reporting.
  • Provide assurance on sustainability reporting.

Many challenges, one solution

It’s rare that one answer can address a variety of concerns, but for many small companies, a greater understanding of sustainability can really make an impact. CPAs can seize the opportunity to provide advice and ideas that can help clients position themselves for a more sustainable future. Check out our new sustainability toolkit, featuring a backgrounder on sustainability assurance, a brochure outlining the benefits of CPA provided sustainability assurance, a document defining key sustainability terms and a guide to implementing the United Nations’ Sustainable Development Goals.  

You may also be interested in attending the Sustainability Investment Leadership Council Conference, taking place May 9, 2019 in New York, NY. Register using the coupon code “AICP” before December 31, 2018 for the early bird rate ($255 instead of $595).

Desire Carroll, CPA, Senior Manager- Assurance and Advisory Innovation, Association of International Certified Professional Accountants

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