Beyond Traditional Financial Statements
September 26, 2018
Presented by:
Today’s Speakers
Desiré CarrollSenior Technical
Manager AICPA
Christopher McClurePartner
Crowe LLP
Jessica GehlManager, Sustainability Services
and Risk ManagementPwC
What You Will Learn
• Sustainability reporting and assurance trends and opportunities;
• Trends on the intersection of Public and Private companies as it relates to supply chain management
• Real world examples of how CPAs are helping companies in this rapidly evolving landscape
• Developments in integrating ESG into traditional Enterprise Risk Management (ERM)
• Trends in SDG reporting
Join Sustainable Brands and AICPA at New Metrics ‘18Use code
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October 29-31, 2018Philadelphia, PA
NewMetrics18.com/registration
Sustainability Reporting & Assurance
Desiré CarrollSenior Technical
Manager AICPA
Sustainability Reporting Trends
Sustainability
Environmental, Social and Governance (ESG)
Corporate Social Responsibility (CSR)
US: S&P 500
2011: 20%2017: 85%
Source: KPMG Survey of Corporate Responsibility Reporting 2017
Source: G&A Institute
Sustainability Assurance Trends
Global growth in independent assurance of CR information
US: S&P 500
2015: 14%2016: 16%
Source:The Conference Board/Bloomberg, 2017 https://www.cpajournal.com/2018/07/20/sustainability-assurance-services/
CPA Roles in the Sustainability Accounting Cycle
Strategy
Risk Management
Performance Measurement
Sustainability Reporting
Sustainability Assurance
Source: Adapted from Accounting for the Sustainability Cycle – How the Accounting Profession can Add Value to Sustainability-Oriented Activities – Brian Ballou, Dan L. Heitger and Charles E. Landes
Coming soon from COSO & WBCSD:
Applying Enterprise Risk Management to Environmental,
Social and Governance-related Risks AICPA & SASB
Educational EventOct 11, NYC
AICPA Sustainability-Related Resources
1. Free sustainability toolkita. Sustainability assurance brochure b. Sustainability assurance backgrounderc. Key definitions – one pager d. 7 steps to implementing the SGDs
2. Sustainability attestation guide
3. Free AICPA & SASB educational event on sustainability reporting and assurance - NYC, October 11
4. General sustainability resources: www.aicpa.org/sustainability
5. Coming soon: Sustainability attestation CPE course (Dec)
Supply Chain
Christopher McClurePartner
Crowe LLP
© 2017 Crowe Horwath International 1111
Sustainability Topics – Supply Chain The Intersection of Public
and Private Companies
➢ Regulatory Drivers
➢ Conflict Minerals US / EU / Globally
➢ Anti-Human Trafficking California / UK
➢ Prop 65 / REACH / RoHS
➢ Corruption / Anti-Bribery
➢ EU Non-Financial Disclosure Directive
➢ Reputational Concerns
➢ Socially Responsible Investors
➢ Companies must ask themselves: What role do we play in the community? How are we managing our impact on the environment?
Are we working to create a diverse workforce?
➢ Compliance Trends
© 2017 Crowe Horwath International 1212
What are Conflict Minerals?
• The following commercial ores and their derivatives from the
Democratic Republic of the Congo (“DRC”) and adjoining
countries*:
• Tantalum – Extracted from Columbite-tantalite (also known as
coltan)
• 17% of the world’s supply is from the DRC
• Tin – Extracted from Cassiterite
• 4% of the world’s supply is from the DRC
• Tungsten – Extracted from Wolframite
• 3% of the world’s supply is from the DRC
• Gold
• 2% of the world’s supply is from the DRC
* Adjoining Countries refers to the
following countries that presently share
an internationally recognized border
with the DRC: Angola, Burundi, Central
African Republic, the Republic of the
Congo, Rwanda, South Sudan, Tanzania,
Uganda, and Zambia.
© 2017 Crowe Horwath International 1313
EU Non-Financial Disclosure
Large public-interest entities with more than 500 employees should disclose in their management report
relevant and useful information on the policies, main risks and outcomes relating to:
• The Environment
• Social and Employee matters
• Human Rights
• Anti-corruption
• Anti-bribery
• Diversity on their board of directors
• Companies are encouraged to align their disclosures with recognized guidelines such as:
• UN Global Compact
• OECD Guidelines for Multinational Enterprises
• ISO 26000
© 2018 Crowe Global 14
Pulling it All Together Comprehensive Programs
1. Assess
Obligations
and
Company
Goals
4. Establish
“compliance
calendar”
3. Leverage and
combine outreach
efforts
2. Conduct Risk
Assessment
5. Scorecards to
measure success
© 2017 Crowe Horwath International 1515
Key Resources
✓ https://www.crowe.com/insights/issues/conflict-minerals
✓ http://www.responsiblebusiness.org/initiatives/rmi/
✓ https://www.globalreporting.org/standards
✓ https://www.sourcingnetwork.org/
✓ https://www.amnesty.org/en/latest/news/2017/11/industry-giants-fail-to-tackle-child-labour-allegations-in-cobalt-battery-
supply-chains/
✓ https://www.blackrock.com/corporate/investor-relations/larry-fink-ceo-letter
© 2017 Crowe Horwath International 1616
Integrated Reporting & SDG’s
Jessica GehlManager, Sustainability
Services and Risk Management
PwC
QUESTIONS?
Join Sustainable Brands and AICPA at New Metrics ‘18Use code
JoinUs for a 20% discount!
October 29-31, 2018Philadelphia, PA
NewMetrics18.com/registration