ACCOUNTING. CPAs are becoming key players in the implementation of environmental, social and governance (ESG) factors in companies. Their role is both to certify the quality of the non-financial information disclosed and to ensure that the integration of ESG elements creates value.

A current KPMG survey showed that despite their desire to further expand their ESG programs, a majority of Canadian CEOs struggle to clearly define their ambitions in this area. They struggle to understand how to strategically embed ESG factors into their business, let alone present a compelling narrative to their stakeholders.

“CPAs are among the best places to demonstrate to companies, concretely and quantitatively, that the integration of ESG criteria enables the creation of value and sustainability, that sustainable development must be at the heart of business decisions and plays a crucial role in the image of sound corporate governance that businesses need to deliver to earn consumer trust,” said Geneviève Mottard, president and chief executive officer of CPA Québec.

Learn before you advise

To play this role properly, CPAs must first educate themselves on these topics. In recent years, CPA Quebec has added several training courses on ESG criteria, green taxes and sustainable development and will continue to improve this offer. “CPAs also receive a mandatory weekly information bulletin that includes a section on sustainable development,” explains Geneviève Mottard. It presents articles on various topics, including the certification of ESG data, the integration of sustainable development into corporate strategic planning, or the strategy, funding and resources to implement a more circular and sustainable economy. »

The regulation also contributes to attempts to implement Canadian standards for the integration of ESG factors and to harmonize the standards for the disclosure and verification of this non-financial data. CPA Quebec supports the creation of the Canadian Sustainability Reporting Standards Council to complement the International Sustainability Standards Council. He also offered to work with the President of the International Sustainability Standards Board (ISSB) during a meeting last March. The ISSB works to harmonize disclosure standards for ESG data.

A strategic vision of ESG

Marie David, head of KPMG’s ESG verification team, points out that ESG factors “receive strong investor attention and are increasingly impacting access to capital and company valuations”. For these reasons, they believe they fall squarely within the scope and authority of CPAs.

She explains that CPAs are often the primary data stewards within an organization and play a strategic advisory role. They are therefore in the best position to make the connections between strategic and financial aspects and to help quantify the risks and opportunities associated with ESG elements. “CPAs have an overall view of the business,” she recalls. They help place ESG factors in a long-term value creation perspective by integrating ESG factors into strategy, decision-making and reporting. »

One thing is for sure, companies will gain nothing by delaying the establishment of a true ESG strategy. The expectations of investors, but also of customers, and the introduction of new regulations are not passing fads and will have a lasting impact on their prospects for value creation.

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Three best practices in ESG issues

1. Set the tone at the top of the organization

“The board and senior management must be aware of and committed to the company’s ESG ambitions and strategy,” says Marie David. They have to understand how they want to position themselves, know what added value they are looking for and they have to mobilize themselves. »

2. Mobilize everyone

Marie David suggests involving all stakeholders and all areas of the company. Everyone needs to understand where the organization is going. They should help executives fully understand what business processes are in place across the organization and what data is being generated. The organization must also ensure that it adequately trains its employees to facilitate the integration of ESG factors.

3. Generate reliable information

“If it wants to prevent its commitments and goals from being just hope, the organization must implement strict processes and ensure the reliability of its data by having it checked,” claims Marie David.