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CPAs’ Important Role in Navigating ESG Requirements

As the ESG landscape evolves, CPAs’ responsibilities will likely only become greater. To prepare their organizations for the future, here’s what CPAs and other accounting professionals should consider. By Susan “Susie” Kurowski | Digital Exclusive – 2024


Environmental, social, and governance (ESG) considerations are reshaping corporate decision-making more than ever, often transforming business operations beyond financial statements and profit margins. With increasing demand for enhanced ESG disclosures and the United States Securities and Exchange Commission (SEC) finalizing its landmark climate rule, it’s important for organizations to have robust, integrated sustainability strategies and priorities woven into their DNA. Beyond regulatory requirements, ESG initiatives can also drive tangible business benefits, impact corporate reputation, and can shape investor strategies and relationships.

ESG encompasses some complex issues, including climate change, diversity and inclusion, labor practices, data privacy, and more—and investors, consumers, and stakeholders are increasingly weighing these factors as they demand greater transparency and accountability from businesses.

As the ESG landscape evolves, certified public accountants (CPAs) and other accounting professionals should adapt quickly to continue to play an important role in business practices. If well-prepared for the changes ahead, not only can CPAs spearhead organizations’ transformations in complying with new ESG mandates, but they can also help organizations thrive in an increasingly transparent, sustainability-conscious world.

Understanding the ESG Regulatory Landscape

To be prepared for the future, CPAs should first gain a comprehensive understanding of today’s ESG reporting standards. Here are some leading standards-setting groups to know and follow:

  • Global Reporting Initiative (GRI): The GRI’s standards are a good starting point, and they offer guidance to companies on reporting information that impacts the economy, environment, and people, including issues like climate change and child labor.
  • Sustainability Accounting Standards Board (SASB): While GRI standards offer a comprehensive approach to sustainability reporting, SASB’s indicators enable more specific ways to measure and disclose material information, often within context of specific industries.
  • Task Force on Climate-Related Financial Disclosures (TCFD): As investors increasingly seek clearer information on the impacts of climate change, the TCFD’s guidance can help CPAs and other accounting professionals improve how their companies report on climate-related financial information.
  • International Sustainability Standards Board (ISSB): The ISSB’s framework has been broadly accepted as the global baseline standards for disclosing climate-related financial information that can bring greater transparency to financial markets.
  • Greenhouse Gas (GHG) Protocol: As the world becomes more carbon conscious, accounting professionals should understand how the GHG Protocol Corporate Accounting and Reporting Standard can help them meet reporting requirements for GHG emissions.

Additionally, some businesses may soon need to address new mandatory disclosure requirements, such as the European Union’s (EU’s) Corporate Sustainability Reporting Directive (CSRD), which has already started to be phased in as of this year. The wide-reaching scope of the CSRD has the potential to affect many U.S.-based companies with activities in the EU, requiring them to disclose risks and opportunities that stem from social and environmental issues.

Closer to home is the recently passed SEC Climate Disclosure Rule, which impacts U.S. public companies, depending on certain criteria. While the rule leverages some of the existing disclosure frameworks mentioned above, such as those from the GHG Protocol and TCFD, the SEC’s final rule only addresses climate-related disclosures. Since many parts of the rule won’t go into effect until January 2025, CPAs and other accounting professionals are advised to lend their skill sets during this transitionary period as companies develop their ESG reporting strategies.

Of course, individual states are also considering their own climate-related bills. In California, for example, Senate Bill 253, which was passed in September 2023, will require companies with greater than $1 billion in annual revenues to file annual reports disclosing GHG emissions. Similar bills in New York, S5437 and S897A, are in the early stage of their legislative formation.

Importantly, ESG regulations, like all the ones noted above, can significantly impact a company’s financial disclosure and risk assessment. Therefore, CPAs should understand what risks are most significant to their organizations so that they can strengthen governance and internal controls in their ESG measurement and disclosure. To do so, they should educate themselves on the connections between ESG issues and financial disclosures. This means not only recognizing the potential risks to their companies, but the opportunities for growth and value creation through responsible ESG practices.

How CPAs Can Shape the Future of ESG Reporting

With the right experience, CPAs and other accounting professionals can serve as strategic advisors in ESG reporting. Gaining such experience starts with specialized ESG training and education programs. Notably, many universities and professional organizations now offer courses and certifications focused on emerging sustainability and ESG reporting rules.

CPAs should also collaborate with colleagues who play a role in ESG-related functions within their organizations. Since ESG is a multidisciplinary field that encompasses various areas (e.g., sustainability, ethics, and social impact), it’ll likely be necessary to involve individuals from executive leadership, strategy, HR, legal, and other relevant departments. By collaborating with these professionals, CPAs can develop a comprehensive approach to addressing ESG issues within their organizations. Once they’ve gained additional ESG knowledge, CPAs should consider how to leverage relevant technologies to integrate ESG considerations into financial practices, such as developing strategies for collecting, analyzing, and reporting ESG data alongside traditional financial data.

Using data analytics tools, for example, can streamline ESG data collection and analysis to ensure accuracy. Integrating ESG metrics into financial analysis and risk assessments can provide a more comprehensive view of a company’s performance. It can also help organizations establish leading practices for ESG risk assessment and mitigation. Identifying these risks upfront and implementing smart mitigation strategies can help safeguard a company’s financial stability and reputation.

Of course, enhancing stakeholder communication is important as well. CPAs should understand their role in transparently communicating ESG efforts to stakeholders. This transparency can instill trust and strengthen relationships with investors, regulators, customers, and the public. After all, it’s not just about compliance; it’s about demonstrating a genuine commitment to responsible business practices.

Preparing for future ESG reporting requirements will likely be a multifaceted and indispensable role for CPAs and other accounting professionals. Their analytical thinking, strategic guidance, and comprehensive understanding of ever-evolving rules can be an asset to an organization’s financial and reputational integrity. By taking proactive steps now, CPAs can help prepare their organizations for the ESG requirements of the future, helping them thrive in the evolving landscape of sustainability and accountability.


Susan “Susie” Kurowski is an audit & assurance partner at Deloitte & Touche LLP.

This publication contains general information only and Deloitte is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte shall not be responsible for any loss sustained by any person who relies on this publication.

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