Issue link: https://resources.tangoanalytics.com/i/1522476
RISK Sustainability issues pose various business risks, including regulatory compliance, reputational damage, and operational disruptions. By committing to sustainability practices themselves, CPAs can help their clients mitigate and identify this physical and transition climate change-related risks to ensure business resilience and advise on how to operate in new markets and regulatory environments. The SEC climate rule in particular places significant emphasis on reporting a company's risk scenario planning and mitigation efforts, which accounting firms may be able to help with. Finance teams will need to understand new types of sustainability risks(eg climate, nature, social) and review the risk management processes accordingly, since sustainability risks may have varied timelines and be very localized, with multiple dimensions and drivers, requiring scenario planning. PROCUREMENT & ADVISORY Beyond reporting and assurance, accountants may be expected to take on advisory roles, helping businesses to implement sustainable practices effectively and capture opportunities. This can range from developing internal controls that address sustainability risks to advising on the financial aspects of environmental compliance. CPAs can also leverage their accounting expertise to guide clients in making sustainable investment decisions, improving renewable energy strategies through feasibility analysis, and acquiring green bonds. For instance, your firm may have clients who want to know how energy tax credits and other incentives are calculated and reported, especially given that the Inflation Reduction Act is awarding more funds than ever towards sustainable investments for many corporations. Those tax credits can also be allocated towards the use of software systems like WatchWire that can manage sustainability data for municipalities. CPAs also have the tools to reflect the financial link between the sustainability projects of a company and its long-term value creation in ROI valuations and cost- benefit analyses. By presenting a comprehensive financial picture, CPAs can empower their clients and organizations to make more informed decisions. Sustainability & Energy Management Simplified