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INSIGHTS

Demand Mounts for ESG Attestations

October 22nd, 2021/Advisory

Interest in environmental, social and governance (ESG) matters has grown significantly during the COVID-19 pandemic. And that momentum may continue under the Biden administration. Currently, about 90% of large public companies voluntarily publish so-called “sustainability reports” that communicate performance on ESG matters, according to a recent report published by the Center for Audit Quality and the American Institute of Certified Public Accountants.

However, the information that sustainability reports provide isn’t based on U.S. Generally Accepted Accounting Principles (GAAP). And there aren’t currently any mandatory attestation requirements for sustainability reporting. An external audit can help ensure transparency and reliability when reporting on ESG matters.

Covering all the bases

The term “sustainability” encompasses a broad range of nonfinancial issues that may affect a company’s financial condition and performance. Media attention on ESG matters has increased public awareness and prompted concerns about how sustainability issues could impact value or increase a company’s risk of litigation.

A sustainability report communicates the company’s sustainability goals and how the company plans to meet them. It focuses on the following three areas:

1. Environmental. This component address how the company manages risks related to climate, natural resource scarcity, pollution and waste. For example, a company may discuss the size of its carbon footprint, efforts to replace fossil fuels with renewable energy sources and overall use of natural resources.

2. Social. This section covers such issues as workplace, health and safety, and consumer product safety risks. Over the last year, interest in human capital issues — such as diversity and inclusion policies — has grown dramatically.

3. Governance. This includes information on boardroom diversity, executive compensation, critical event responsiveness and corporate resiliency. It also may address policies and practices on lobbying, political contributions, bribery and corruption.

During the pandemic, stakeholders may have specific concerns about how your company is handling such issues as public health and safety, supply chain disruptions, strategic resilience, and human resources. Stakeholders want assurance that companies are engaged in responsible corporate governance in their COVID-19 responses. Sustainability reports can showcase good corporate citizenship during these challenging times.

Assuring stakeholders

Without independent, external oversight, stakeholders may view sustainability reports with a significant degree of skepticism. That’s where audits come into play.

Many organizations — such as the Global Reporting Initiative, the Sustainability Accounting Standards Board and the Task Force on Climate-related Financial Disclosures — have developed standardized sustainability frameworks. External auditors can verify whether sustainability reports meet the appropriate standards. If not, they can adjust them accordingly.

We can help

ESG factors can affect risk and return. Most companies agree that sustainability information is an important part of their communications with lenders and investors. In some cases, financial statement disclosures that are required under GAAP might not provide enough information to satisfy stakeholder concerns. Contact us , we can help expand your current disclosures or issue a separate audited sustainability report to position your organization as a leader in ESG matters.

© 2021

TAGS: Advisory

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Insights

Changes in Sec. 174 make it a good time to review the R&E strategy of your business

March 15, 2023/0 Comments/in Tax/by KKB CPAs

A tax law that passed in 2017 makes a major change to Section 174 research and experimental (R&E) expenses. Here’s what it might mean for your 2022 business tax return being filed this year. Continue Reading Changes in Sec. 174 make it a good time to review the R&E strategy of your business

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Additional Tax Relief Provided for Californians Impacted by Winter Storms

March 9, 2023/0 Comments/in Tax/by KKB CPAs

The California Franchise Tax Board is conforming to the IRS’s postponement of filing and payment deadlines to October 16, 2023, for taxpayers located in most California counties due to the recent winter storms. Continue Reading Additional Tax Relief Provided for Californians Impacted by Winter Storms

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Answers to your questions about 2023 limits on individual taxes

March 8, 2023/0 Comments/in Tax/by KKB CPAs

How much is the standard deduction in 2023? How much do you have to earn this year before you can stop paying Social Security on your salary? Here are some Q&As about these and other tax-related amounts for 2023. Continue Reading Answers to your questions about 2023 limits on individual taxes

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http://kkbcpa.com/wp-content/uploads/2023/03/1.jpg 292 560 KKB CPAs https://kkbcpa.com/wp-content/uploads/2021/12/KKB-Logo-w-text.png KKB CPAs2023-03-08 11:01:362023-03-08 11:01:44Answers to your questions about 2023 limits on individual taxes

Additional Tax Relief Provided for Californians Impacted by Winter Storms

March 9, 2023/0 Comments/in Tax/by KKB CPAs
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http://kkbcpa.com/wp-content/uploads/2023/03/2.jpg 334 500 KKB CPAs https://kkbcpa.com/wp-content/uploads/2021/12/KKB-Logo-w-text.png KKB CPAs2023-03-09 12:19:552023-03-09 12:25:57Additional Tax Relief Provided for Californians Impacted by Winter Storms

Answers to your questions about 2023 limits on individual taxes

March 8, 2023/0 Comments/in Tax/by KKB CPAs
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http://kkbcpa.com/wp-content/uploads/2023/03/1.jpg 292 560 KKB CPAs https://kkbcpa.com/wp-content/uploads/2021/12/KKB-Logo-w-text.png KKB CPAs2023-03-08 11:01:362023-03-08 11:01:44Answers to your questions about 2023 limits on individual taxes

How the new SECURE 2.0 law may affect your business

February 28, 2023/0 Comments/in Tax/by KKB CPAs
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http://kkbcpa.com/wp-content/uploads/2023/02/1.jpg 292 560 KKB CPAs https://kkbcpa.com/wp-content/uploads/2021/12/KKB-Logo-w-text.png KKB CPAs2023-02-28 12:27:112023-02-28 12:27:14How the new SECURE 2.0 law may affect your business
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