PricewaterhouseCoopers has been expanding its involvement with sustainability reporting as more of its clients account for their efforts to go green.

Kathy Nieland, the U.S. sustainable business solutions leader at PwC, has been with PwC for the past 23 years and led the firm’s sustainability practice for the past five years or so. “The practice is kind of different from almost any other practice we have at PwC,” she told me in an interview Tuesday. “It’s cross disciplinary. I’ve got a team of consultants that are experts in sustainability issues, and then we also have individuals that are experts in the reporting and auditing side of the business. Then there also folks who are experts in what I would call the green tax incentives area. It’s organized a little bit differently in that we all come together in one national team.”

Nieland’s background is as an audit partner and she still signs audit opinions for SEC clients, but increasingly she has been spending her time in discussions of sustainability reporting and integrated reporting. She represents PwC as an advisor to the Sustainability Accounting Standards Board, in addition to an AICPA sustainability group and the Global Reporting Initiative. In two weeks, she will visit Frankfurt, Germany, to represent the U.S. firm in an effort to pilot the International Integrated Reporting Council’s draft standard on integrated reporting.

She explained how SASB has been shaping its business plan. “They’re really trying to fill a bit of a void in terms of how sustainability reporting is delivered to the stakeholders,” said Nieland. “Right now almost all corporate responsibility reports are using a framework called the Global Reporting Initiative, or GRI. That framework is pretty detailed and it results in pretty long, voluminous reports that can be upwards of 100 pages when you go through the GRI methodology and report on the metrics that are required to do that methodology. What SASB is really trying to do is to take that as a baseline and then to prioritize the industry-related issues into a set of metrics that are agreed on by the industry.” The metrics could then be reported in public filings with the Securities and Exchange Commission.

SASB is proposing that in the management discussion and analysis section of their annual financial statements, companies report on meaningful metrics related to their industry. “Maybe it’s an environmental metric like greenhouse gases emitted,” said Nieland. “It might be a social metric that’s more meaningful to your organization, and therefore that should be included upfront in your discussion of results for the year. They’re really trying to come up with some mechanism. When they say material, they mean material from an environmental perspective or a social governance perspective or economically material to the organization. The challenge right now is the framework around that, and how you determine what’s material for organizations.  Each major industry will have a set of metrics and therefore we can at least start there with prioritization of what’s material.”

With the airline industry, for example, carbon emissions and customer satisfaction are likely to be some of the metrics on the scorecard, among the items that are considered meaningful to the sustainability and environmental impact of the business.

So far, PwC does not have too many clients trying to apply such metrics in their reporting to the outside world. “It’s very limited right now,” Nieland admitted. “You have companies that are really considering these metrics, as it relates to what’s prescribed by the Global Reporting Initiative now. They tend to report that in their sustainability report. There has been some interest in what integrated reporting looks like. A limited number of U.S. companies are participating in the pilot program for the IIRC. There’s quite a bit of monitoring to see what’s going on, so they may be thinking about what they should be reporting, but they’re likely going to be reporting those things internally for management’s use rather than externally reporting in the near term. They see a lot of trending towards more transparency. I think that the positives are that they are preparing, but it’s pretty measured and limited right now.”

Integrated reporting of factors like sustainability may be a good idea for some organizations so they can learn more about how they can improve their value. “We have a pretty clear point of view that if you can get good solid insight from thinking through an integrated reporting opportunity for you as an organization, then it makes sense for you to think about it,” said Nieland. “When you consider as an organization what you would report in an integrated report, you actually go through a process of strategic alignment with the executive team as to what the important performance goals are and what’s going to drive value to the business. You’ll definitely go through a process of getting more insight.

"Strategically our point of view is it does make sense from an internal management perspective," she added. "If you don’t have some of the information that you would otherwise have if you were preparing an integrated report, it’s a good exercise. Having said that, whether or not an integrated report is right for your organization to publish externally is very company specific. For certain organizations that have a lot of stakeholders and investors who want to see an integrated report, or if they think they have a very strong and crisp story to tell, I’d say that makes sense. But for the most part, our point of view is to use that process for insight to make good management decisions now and then consider your path long-term to what you would want to branch out to in terms of integrated reporting. We see a lot of benefits from it, especially when you get comparability among industries. That can really help an organization. We also see benefits in terms of the correlation between that transparent reporting and the company’s long-term performance externally. Maybe not proscriptively do you see a correlation with shareholder value, but you see a lot of indirect relationships between increasing performance and value.”

She also sees a trend with the SEC issuing rules such as the regulations for disclosure of so-called “conflict minerals” extracted in the Congo, and disclosures of payments to governments by oil and gas companies, which were called for under the Dodd-Frank Act (see SEC Requires Disclosure of ‘Conflict Minerals’).

“The more you can do to get a handle on those environmental, social and governance risks, and drivers to your business, the better off you are in anticipating and responding to future requests for information,” said Nieland.

Most of the companies that have been considering integrated reporting have been consumer-facing companies as opposed to the ones who cater to other businesses, according to Nieland. “They have the most near-term need to be able to respond to the requests for this kind of information,” she said. “If I’m having a conversation on integrated reporting, the kind of companies we are actually supporting now are heavily branded, consumer-facing companies. When I speak to my clients about the next level, I do have some B2B companies that are thinking about this in terms of their internal engagement process and performance goals, but aren’t necessarily in the near term going to publish an integrated report. But they want the insight.”

She suggested accountants keep an eye on the industry-specific standards coming out of SASB and that industry groups weigh in as they determine what is the material inforrmation that should be reported for their industry, as well as be aware of a recently issued consultation paper from the Ceres-led Investor Network on Climate Risk proposing that publicly listed companies include environmental disclosures in their reports. "The trend line is increasing, not decreasing, the amount of information that's reported," Nieland noted.