CPAs will be influential in assisting private companies in adopting proposed SEC ESG Reporting Standards
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Withum, a national advisory and accounting firm, has identified opportunities for CPAs to assist private companies with their ESG strategy development and execution. Joe Holman, Market Leader of Withum’s ESG Services, believes private companies should adopt elements of the SEC’s proposed ESG Reporting Standards and use their internal accounting or audit group to help them effectively implement and maintain their reporting structure.
“Private companies should consider their goals when defining their strategy for ESG impact,” said Holman. “Are you looking for investors? Satisfying customer demands? Or seeking to identify new opportunities in a low-carbon economy?” All establishments are under the microscope to share what actions they’re taking to create a more sustainable future because consumers, investors and employees want accountability.
The SEC is expected to release new ESG disclosure requirements for public companies that will outline reporting guidelines. While private companies won’t be required to adopt, they can use the SEC’s framework to build or enhance their current ESG reporting model.
“It’s a natural fit for CPAs to help support your ESG strategy and create controls – they already know your business, financial controls, reporting and finance team operations,” said Holman. CPAs can advise on creating a framework to collect, validate and report a company’s ESG activities and impact. They have the training to:
- Apply AICPA assurance standards to define a company’s ESG framework.
- Identify critical ESG factors for your business.
- Create a data collection process.
- Provide internal control over the capturing, validating and reporting impact data and how it is shared.
- Implement a strategy to identify and quantify the impact of climate risk on the financial statements.
CPAs can issue review and examination reports on ESG activities like financial results. They can assist in capturing ROI on ESG activities like making a net-zero emissions pledge, implementing zero waste options and expanding company-sponsored social initiatives.
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