Sustainability Opportunities for CPAsby
Sustainability is an issue that is receiving an ever-increasing amount of air time and attention in both the mainstream media and accounting publications, but the direct link between the two may sometimes be difficult to articulate.
CPAs, as well as accountants working in industry or in a nonprofit role, face a host of challenges and changes that already are consume a significant amount of energy. Blockchain, artificial intelligence, and the looming automation of many lower level activities are creating quite a bit of anxiety within the profession, as current practitioners and future entrants (students) attempt to stay abreast of these changes.
Compounding these concerns is the reality that, as a whole, the CPA and accounting profession as a whole have large number of leading practitioners and current leaders who will be retiring in the coming years – succession is a concern for organizations large and small. In order to successfully update the profession to the emerging leaders, and up-and-coming practitioners, the profession will have to evolve and address the changing needs of the marketplace.
As automation and artificial intelligence take hold over ever-increasing swaths of traditional accounting responsibilities, accountants must find new revenue and client engagement opportunities.
Reflecting on my recent opportunity to present at the Sustainable Brands, New Metrics conference, with my co-panelists Joy Pettirossi-Poland and Desire Carroll, the connection between accounting, finance, and sustainability, already clear, crystallized. Although I have studied, researched, and advocated for sustainability initiatives in the past, the engagement, energy, and number of engaged individuals in these areas was both encouraging and empowering.
In addition to presenting at this conference I had the opportunity to attend the finance-related boot camp, or a deep dive into the financial and accounting of sustainability, and I have included some of the takeaways specifically applicable to accounting professionals here:
1. Sustainability is Key to Succession Planning
Effective succession planning is a hot topic at virtually every accounting conference, and in order to successfully transition the firm from current owners to future owners, the firm must have a revenue plan going forward. Engaging in sustainability related assurance projects, reports, and consulting arrangements represents both a way to increase current revenues and attract new clients going forward.
2. Millennials are Embracing Sustainability
The Millennial generation has received numerous articles and analysis from both the mainstream media and accounting oriented publications, and that is for good reason. Millennials already account for the largest percentage of the workforce, will only continue to increase their influence as they mature and move up in the workforce, and Millennials are interested in sustainability and doing business in a sustainable manner.
Doing business in a sustainable manner represents a straight forward and logical way to embrace this important generation and their needs. An additional benefit is that by emphasizing sustainability and sustainability business operations, a practice and organization will be more appealing to professionals as they enter and mature within the workforce.
3. Clients are Expecting Sustainability Information
It is no secret that sustainability information and data are playing an increasing role in both how management interacts with clients, and what customer and clients expect from their business practice advisors. Engaging with clients, and being proactive about client needs and expectations from a business management perspective allows accountants to elevate their role from mere record keeper to business partner.
4. Sustainability is a Revenue Opportunity
Building on point #1, CPA professionals and organizations must plan for succession in a continuous manner and sustainability offers both a potential stream of new revenue, and a way to engage new clients. Virtually every organization is interested in understanding how they are performing from both an operational and financial point of view – CPAs who are able to capitalize on this growing need will be well positioned going forward.
Additionally, there are opportunities for practitioners to engage other specialty firms, and divide the revenues generated from these expanded services to initiate this process.
5. Sustainability is an Iterative Process That Can Start Today
Sustainability is a business issue that can generate significant financial results and opportunities for both the organization involved, as well as the accounting professionals involved in analyzing and reporting this information. In addition to helping build a more sustainable and healthy environment, these items and issues can generate direct business benefits in the form of increased revenues, cost savings, and opportunities to attract new clients.
The key is to initiate the conversation, and to get this ball rolling between you and your client. Sustainability is an issue and item that has received a tremendous amount of coverage and analysis, but there is still significant confusion about what exact steps can be taken to implement these forces into the accounting profession.
That said, viewing the potential and obstacles linked to sustainability from the perspective of both the CPA profession and a customer/client role reveals there are steps that can be taken today to get this ball rolling. Sustainability is good for the environment and can be good for the bottom line.
Sean Stein Smith is a professor at the City University of New York – Lehman College. He also is the chairperson of the NJCPA's Emerging Technologies Interest Group (#NJCPATech). He serves on the Advisory Board of the Wall Street Blockchain Alliance, where he co-chairs the Accounting Work Group. Sean is on the Advisory Board of Gilded, a...