CPAs help companies measure sustainability [Long Island Business News (NY)]

In addition to calculating financial information, accountants are compiling and verifying a wide range of environmental and social responsibility data.

Even if U.S. regulators don't require reporting regarding carbon footprints, diversity or green initiatives, more firms are rolling out reports with this information.

And they're turning to accounting firms' consulting practices - from KPMG to PricewaterhouseCoopers and Deloitte - and boutique consulting firms for guidance.

"We're helping them set up the infrastructure that supports the reporting," said Mike Percent, partner at KPMG in charge of the Melville office's corporate responsibility practice." It starts with identifying the metrics they'd want to report or should report."

He said KPMG helps companies find and verify carbon footprint data and diversity statistics, as well as measure the use of sustainable work-force practices and renewable energy.

"What's driving the growth is the need for companies to understand what their peer group is doing in terms of sustainability," Percent said. "And helping them translate that into their aspirations."

Eighty-three percent of the biggest 100 U.S. companies by revenue issued reports on corporate responsibility in 2010, up from 74 percent in 2008, according to KPMG.

"It started at the most-global organizations. It seems to be moving down," Percent said. "We've put a lot of resources behind it. We think that's an evolving marketplace."

While companies try to tell their financial story in annual reports, they're increasingly producing hefty narratives showing environmental and other practices in sustainability reports.

"A lot of a sustainability report is a story being told, the great things a company does and its challenges," said Lawrence Ballard, a partner at PricewaterhouseCoopers' sustainable business solutions practice.

But unlike financial data, the environmental information typically remains unaudited.

"Most are not audited. It's a trend, but at this point, it's not the norm," Ballard said. "As [investors] put more pressure on companies to report sustainability information, more companies are deciding to have the data audited."

CA Technologies' financial information is vetted, but the Islandia firm's environmental information (cutting carbon emissions by 30 percent since 2008) isn't submitted to the same scrutiny.

"Our latest report is not audited. It's one of these things that's evolving. As a next step in sustainability best practices, you would go for verification," said Cynthia Curtis, CA's vice president and chief sustainability officer. "Our next report, which we've just kicked off, will be verified."

KPMG Partner Peter F. Minan, U.S. audit leader for climate change and sustainability, said as more data is assembled, "data quality has become an issue."

More than one-fifth of large companies, he said, restate data related to corporate responsibility.

"Assuring the accuracy of this nonfinancial data becomes critical as more companies work to include carbon reporting information in their annual reports," Minan said.

Curtis said part of the problem is the difficulty in obtaining information to calculate carbon footprints.

"The data isn't easy to get, particularly when you're talking about suppliers," she said. "We know how many sheets of paper we have avoided using. We're not asking for that verification. The verification is on greenhouse gas emissions."

Without a single standard for sustainability reports, accounting firms and other consultants help companies design documents based on various formats.

The most common format is that of the Global Reporting Initiative, developed by the United Nations and Ceres, an alliance of companies conducting sustainability reporting.

Although some accounting firms are carving out a niche in green reporting, they don't obtain special certification to do these calculations but instead rely on professional standards.

"As a firm, when you do a lot of strategy and assurance business, the core of what you do is underpinned by AICPA standards," Ballard said.

PwC has set up a standalone sustainable business solutions practice to help with reporting and assurance as well as "analytical assessment of information and testing data," Ballard said.

In addition to environmental measures, sustainability reports typically include information about philanthropy and workplace flexibility.

CA's sustainability report found 82 percent of employees were satisfied with managers, but only 72 percent believe the company is taking meaningful steps toward sustainability.

"What it said to me is a percentage of our employee base is unaware of the things we're doing," Curtis said, "which is not surprising."