An interim rule issued May 31, 2011, amending
the Federal Acquisition Regulation requires
federal agencies to promote sustainable
technologies, materials, products, and services.
More than 80 percent of consumers surveyed in
a 2010 national poll indicated that it’s somewhat
or very important that the companies they
purchase from practice sustainable business.
A recent study by Stanford University shows
that MBA graduates will take a $13,000 pay cut
to work for a company they deem responsible.
Another study found that employees at
companies with strong sustainability programs
are happier, more satisfied, and have better
retention rates than those at other organizations.
Many private equity firms, investors, and mutual
funds use sustainability activity reports to
determine their investment decisions.
To truly improve the bottom line and bring
sustainability beyond philanthropic goals, a
company needs to measure its efforts in the same
way it would measure other investments. Despite
all the sustainable activity in the private sector
around the world, most companies haven’t been
able to fully track, measure, and report on their
endeavors. That said, it’s critical that private
enterprises get credit for their efforts and that
outside investors and influencers can verify
activities. Otherwise the risks of sustainability
liability will potentially grow over time.
Many companies are now issuing sustainability
reports, but there’s a growing concern among
stakeholder groups that some of the information
reported is, at best, inaccurate and, at worst,
calculated to mislead. This concern has led
many companies to have their published
reports certified or substantively verified by
independent third-party auditors. Having reports
independently verified establishes unquestioned
credibility regarding sustainability claims and
helps ensure that internal data collection and
reporting processes are disciplined and accurate.
As more companies report on sustainability data,
it’ll be increasingly important for those that are
serious to differentiate themselves from those that
aren’t with a process of independent verification
to ensure stakeholders of report accuracy.
Michelle Gall has been in public accounting since 2002 and
provides financial statement audits for food processing,
manufacturing, and not-for-profit organizations.
Bob Bunting has over 40 years of public accounting
experience. He served as the CEO of Moss Adams for 23 of
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