Sustainable services: CPAs positioned for burst in opportunities

At first glance, it might appear that the growing number of regulations related to sustainability will affect only the largest CPA firms.

In reality, many in the accounting profession would be wise to proactively take a second look – with an eye toward opportunity.

“The market forces that are driving these compliance requests are accelerating,” Good.Lab co-founder and CEO Andries Verschelden said. “It’s all moving in a single direction – upwards.”

Verschelden recently participated in the ESG Symposium Virtual Update, hosted by AICPA & CIMA and AICPA subsidiary CPA.com, providing a detailed overview of the current sustainability reporting and auditing landscape. Verschelden was a partner at top-25 firm Armanino prior to founding Good.Lab, a software company that recently partnered with CPA.com to launch the ESG Practice Development Program.

At this moment, the SEC’s climate reporting rule is in legal limbo. And, on the surface, pending regulations in California and in the EU seem to focus on a set of larger companies and, relatively speaking, won’t have a widespread effect on smaller CPAs whose clients aren’t directly affected by the regulations.

But the turning of the calendar to 2025 will begin in earnest the shift from voluntary to mandatory reporting and attestation of sustainability data, and rapidly developing trends in the space signal that CPAs in a variety of roles soon will see a stream of new opportunities.

“In order to perform these services, you really need to be upskilled and competent in this area,” Ami Beers, CPA, CGMA, senior director­–Assurance & Advisory Innovation for AICPA & CIMA, said during the symposium.

Survey attests to massive increase in auditing opportunities

In a voluntary reporting environment in 2022, when 99% of the largest 100 U.S. companies were reporting some sustainability information, just 23% that obtained assurance turned to an audit firm.

Fast forward to 2025, and the dawn of mandatory regulations is set to shatter the previous state of play. Among 300 U.S.-based executives at public companies with at least $500 million in annual revenue surveyed by Deloitte for its 2024 Sustainability Action Report, 92% plan to obtain assurance of their companies’ sustainability disclosures for the next reporting cycle.

Among those, 89% said they plan to turn to a CPA firm for assurance.

“The profession has to seize this opportunity to be the key provider, do it well, and win the marketplace with clients or prospective clients,” AICPA & CIMA CEO Barry Melancon, CPA, CGMA, told sustainability-focused leaders during the ESG Symposium Virtual Update.

Chain reaction: Helping clients with requests along the supply chain

In the Deloitte survey, executives cited the pursuit of accurate and complete data as their single-biggest challenge related to sustainability reporting – an increasingly crucial challenge as reporting requirements related to Scope 3 greenhouse emissions begin to shift from voluntary to mandatory.

When Scope 3 disclosures – the reporting of emissions from a company’s supply chain – soon become required for larger companies that do business in California and the EU, pressure to obtain emissions reports from those companies’ supply chains will dramatically increase.

That will lead to opportunities for CPAs who advise smaller-company clients.

“When these large enterprise companies are subject to rules that say you have to measure and report on the emissions in your supply chain, that trickles down into requirements for middle-market organizations,” Verschelden said during “Navigating Supplier Sustainability Information Requests,” a webcast produced by Good.Lab and AICPA & CIMA that debuted Aug. 30. “We think in the next few years, there is going to be an even faster acceleration in requests to share in particular greenhouse gas data and also an increased pressure on the quality of data that is being shared.”

Retail giants Amazon and Walmart and technology giants Apple and Microsoft are among the companies beginning to require their suppliers to report data if they want to continue to operate as suppliers. Often, those requests extend beyond reporting on the “E” in ESG (environmental, social, and governance).

The webcast, set for rebroadcast Sept. 24 (during Climate Week NYC) as well as Oct. 23 and Nov. 21, introduces accounting and finance professionals to ways they can help clients respond to sustainability information requests and how they can work with clients to improve their sustainability profile in the eyes of potential business partners.

Helping companies profit from sustainable initiatives

For CPAs looking for opportunities to establish themselves as trusted advisers for their employers or for companies they advise, an ambitious effort by KPMG to identify sustainability-related initiatives that improve a company’s bottom line is worth a read.

The authors of the report, Is sustainability good for financial performance?, readily admit some limitations they currently face in pursuit of wholly reliable metrics, but the report’s meticulous approach should improve the reliability of subsequent reports as sustainability reporting matures.

In this first iteration, KPMG research unearthed several initiatives that appear to improve gross profit margins, including:

• Lowering carbon dioxide emissions and implementing land environmental impact reduction and e-waste reduction initiatives.
• Developing staff transportation impact reduction initiatives and providing daycare services for employees.
• Limiting executive team turnover and prioritizing gender diversity within the team.
• Including business ethics policies in codes of conduct.

The study features an econometric analysis of more than 2,500 companies across 18 industries in 60-plus countries.

— To comment on this article or to suggest an idea for another article, contact Bryan Strickland at Bryan.Strickland@aicpa-cima.com.