This Philly Finance Leader Thinks Corporate Responsibility Is Key to a Business’s Success

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Stakeholders are increasingly choosing to do business with companies who are environmentally friendly, socially aware, and have strong governance. Because of this, environmental, social, and governance (ESG) matters have become key areas companies are targeting to strengthen their position in the market. Carbon emissions, diversity, and management structure are just a few of the areas that companies should carefully examine to keep pace with the market’s consciousness. Alyssa Kaye from Citrin Cooperman discusses what you should know about ESG and the future of ESG reporting.

Why is ESG important?

With the shifting economic and political landscape, suppliers, customers, and investors are increasingly making decisions based on a company’s ESG initiatives. For suppliers, product sourcing and labor management can all impact the supply chain of goods and services and can have a direct influence on the company’s ability to manage operations. Customers are actively researching companies before choosing whether to be associated with their product or service. As a result, having this information readily available is crucial. Finally, investors are turning to an entity’s ESG initiatives to determine the overall strategic fit into already established ESG portfolios. For these reasons, it is essential for companies to ensure specific measures are being taken to communicate their ESG journey. This is most commonly done in an ESG report.

How do I prepare for ESG reporting?

The goal of ESG reporting is to share a compelling, distinct story of the company. To do this, businesses should first educate themselves on the various ESG standards and frameworks. Companies should simultaneously engage both internal and external stakeholders to determine which material topics are most relevant and critical to the company. Next, companies should begin the information-gathering phase. What are your environmental impacts and risks? How does your company communicate values and concerns? What benefits do you provide your staff, and how happy are they in their careers? After considering these and other factors, the company can then compile the information in an ESG report, which will provide users with a clear understanding of their ESG story.

When should I start?

Creating an effective ESG report may not be a top priority for many organizations, but to ensure that a company’s report is successful and positively received by users, entities should begin the process as soon as possible. ESG reporting will require significant time and involvement from numerous stakeholders, so being transparent about the various aspects of the report is integral. All team members should be actively engaged in the process and should understand the company’s ESG initiatives and their relation to its mission. This will ensure individuals expend the necessary time and effort needed to create a report that showcases those initiatives in a clear, positive manner. While ESG reporting takes time and resources to create and publish, it is essential to ensure that the company is in the best position for the changing marketplace.

How Citrin Cooperman Can Help

Citrin Cooperman’s team of professionals help companies and high net worth individuals find smart solutions to all their accounting and business advisory needs. Contact us to schedule a personal consultation. Alyssa Kaye can be reached at 215.545.4800 or akaye@citrincooperman.com.

About Citrin Cooperman

“Citrin Cooperman” is the brand under which’ Citrin Cooperman & Company, LLP, a licensed independent CPA firm, and Citrin Cooperman Advisors LLC serve clients’ business needs. The two firms operate as separate legal entities in an alternative practice structure. Citrin Cooperman is one of the nation’s largest professional services firms. Clients are in all business sectors and leverage a complete menu of service offerings. The entities include more than 340 partners and over 1,900 employees across the U.S.