With the launch last fall of the Global Reporting Initiative's U.S.-based arm, Focal Points USA, comes the expectation that American companies may finally close the gap with the sustainability leaders in the U.K. and Europe.

This domestic prioritization also presents an opportunity to the accounting profession, as more corporations seek assurance of their environmental health, safety and corporate social responsibility data.

The GRI built the most widely implemented sustainability-reporting framework, and compiles a list of the companies that annually report on environmental, social and governance performance. "Many of the world's largest companies are listed as GRI reporters," said Mike Wallace, director of Focal Points USA. "You should ask yourself if you should be involved in that work."

The latest version of the GRI framework, G3, is used as a de facto sustainability-reporting standard for more than 70 percent of reporting companies globally, while more than 80 percent of Global Fortune 250 companies issue sustainability or corporate responsibility reports. The guidelines are currently used in 65 countries, and by the U.S. Army, Air Force and Postal Service.

Another player in the arena is the Prince Charles Accounting for Sustainability Project (A4S), which was created by the Prince of Wales in 2004 and launched two years later as a network of "businesses, investors, the public sector, accounting bodies, NGOs and academics to develop practical guidance and tools for embedding sustainability into decision-making and reporting processes."

"The ultimate goal is to be a standard-setting apparatus," revealed Arleen Thomas, senior vice president of member competency and development at the American Institute of CPAs, one of the supporting organizations.



The A4S has moved in this direction by developing its Connected Reporting Framework as a model for integrating non-financial sustainability data, such as that presented in the GRI's framework, with standard financial data. However, chief executives at the world's largest companies are still struggling to realize this contextual benefit, as Thomas described it, judging by a 2010 survey conducted by the U.N. Global Compact and Accenture.

While 93 percent of the 766 CEOs surveyed worldwide said that sustainability will be critical to the future success of their companies, they saw obstacles in the very functions necessary for integrated reporting, including the complexity of implementing strategy across business functions (cited by 49 percent), competing strategic priorities (48 percent) and lack of recognition from the financial markets (34 percent). Despite these setbacks, 54 percent of CEOs envision a tipping point - when the majority of companies worldwide will embed sustainability into core business strategies - happening within the next decade, while 80 percent see this occurring within the next 15 years.

In Environmental Sustainability: Tools and Techniques, published by the Society of Management Accountants of Canada, the AICPA and the Institute of Management Accountants, author Helenne Doody emphasized the importance of combining reports: "As environmental sustainability moves from being 'an optional extra' to a 'must-have,' management accountants must learn to fully integrate environmental considerations alongside information on financial and operational impacts and performance."

According to Kathy Nieland, PwC's partner of U.S. sustainability and climate change, "You're seeing an increasing number of clients integrating [CSR] in their annual reports and talking about the journey to getting their data in there. And an increasing trend around requests for assurance of that data."

To satisfy this rising need for external verification of sustainability data, the GRI framework provides three levels - A, B and C - that correspond to degrees of disclosure and transparency. At each level, a plus sign signifies that the report was externally assured. Starbucks, for example, achieves its plus sign with the help of Seattle-based accounting firm Moss Adams, which has been verifying the coffee chain's global responsibility annual report since 2003.

Beyond the GRI framework, Nieland suggested that accountants continue to benchmark what other corporations are doing in this area so they can better advise on what potential reporting requirements will be.



Pressure for sustainability reporting doesn't just come from regulators. "Through the supply chains of large purchasers, Wal-Mart can influence many suppliers," said Wallace.

So while larger corporations are feeling the most pressure from stakeholders and customers to meet sustainability goals, the CSR movement is trickling down to smaller companies as well. "One of the encouraging trends is that companies of all sizes - particularly larger - do a good job of linking business strategies and goals and strategies with sustainability," said Peter Minan, KPMG's assurance leader of the climate change and sustainability practice in the U.S.

Ann Brockett, Ernst & Young's climate change and sustainability services assurance leader, agreed: "In terms of trends, it went from what was really something new that you only saw very large companies doing or in very large industries, to now becoming a lot broader. Even very small companies are looking at it, as strategic growth for companies to get a competitive advantage."



Some accounting firms are finding client opportunities in the sustainability market by starting internally.

Lauren Elizabeth Joyce, audit manager and leader of Raleigh, N.C.-based Hughes Pittman & Gupton's clean-tech client team, shared that the firm found its edge after being the first accounting firm to be certified Green Plus by the Institute for Sustainable Development last year. The institute also named HPG a Green Plus Mover of the Year in February.

"There's a real benefit," Joyce said. "Internally, we are creating a better environment for employees and also expanding our network and building new client relationships."

HPG followed a "people, planet, profits" system in which employees set up a recycling program, replaced all products with more eco-friendly options and worked on overcoming the Achilles' heel of the profession: paper waste. Joyce also cites supportive partners and a growing clean-tech team as instrumental to HPG's success. "It's a fun group," she added, "and more fun than just talking about accounting."

According to Doody's Environmental Sustainability report, accountants should seek these benefits now. "Environmental sustainability needs to become 'business as usual,' and it must become routine for management accountants to incorporate environmental sustainability into their decisions and actions," she wrote. "Understanding this key opportunity for the management accountant is vital if finance professionals are to secure themselves a place for the future."

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