This document summarizes a presentation given by Ken Witt of the AICPA and John DeRose of Ernst & Young on the evolving corporate reporting landscape and the role of the CFO. The presentation covered topics such as sustainability accounting and reporting frameworks like GRI and integrated reporting. It also discussed emerging standards like the Sustainability Accounting Standards Board for industry-specific ESG issue disclosure.

1. #AICPAcfo
The Role of the CFO in the
Evolving Corporate Reporting
Landscape
AICPA CFO Conference
Marriott Marriot City Center
Session 202
May 15, 2015
Ken Witt, AICPA
John DeRose, E&Y

2. American Institute of CPAs #AICPAcfo
Ken Witt, CPA, CGMA
Ken is the staff liaison to the Business & Industry Executive Committee which provides insight
and guidance on professional issues and trends relevant to AICPA’s members working in
business and industry. He is especially involved in thought leadership and professional
development activities for the Chartered Global Management Accountant (CGMA) designation
Ken previously managed the development of a portfolio of guidelines on strategy, risk and
performance management topics and launched the AICPA Sustainability Initiative. He also
created and manages the AICPA Business & Industry Economic Outlook survey, was a member
of the task force for the COSO Internal Control over Financial Reporting – Guidance for Smaller
Public Companies and served as project leader for the AICPA Audit Committee Toolkit: Not for
Profit Organizations.
Ken received his BBA in accounting from the University of Iowa and started his career with
Touche Ross & Co. He has held management positions in audit and control for both public and
privately held companies. He has also consulted to businesses in a wide range of industries
including manufacturing, distribution, technology, financial services, insurance and real estate,
as well as not-for-profit profit and public institutions.
Kenneth W. Witt, CPA, CGMA, serves as Technical Manager in the
Business Industry and Government team at the American Institute of
Certified Public Accountants.
2

3. American Institute of CPAs #AICPAcfo
John DeRose, CPA,
Executive Director, Ernst & Young
• John works with clients to help address operational risks and capitalize on value creation related
to environmental, social, governance and compliance matters. Including addressing Section 1502
of the Dodd-Frank Wall Street Reform and Consumer Protection Act which requires companies to
publicly disclose their use of conflict minerals. He has more than 17 years of reporting,
assurance, risk management, and controls experience serving large multi-national organizations.
John works with those responsible for financial and non-financial reporting, risk management,
internal audit, sustainability, investor relations, supply chain and procurement.
 John is experienced in leading innovative teams tasked with the identification, development,
coordination, roll-out and scaling of new and emerging service offerings at a global level. He has
also worked as a member of a team which specialized in the integration of structured and
unstructured third-party data into business workflow applications and tools, which include
business intelligence targeting and risk profiling. John is comfortable in leading large global
teams to accomplish strategic objectives.
 John is a member of the American Institute of Certified Public Accountants (AICPA) Assurance
Services Executive Committee Sustainability Task Force. He also works with the AICPA’s Conflict
Mineral task force. He is frequently published on sustainability topics and is often asked to
present at conferences, universities, trainings and on webinars.
John DeRose is a CPA in Ohio and Colorado and is a practice leader in
E&Y’s Sustainability services group in Boulder, Colorado
3

4. 444
Agenda
Sustainability and sustainable business
Sustainability accounting and reporting
 Climate Disclosure Standards Board (CDSB)
 Global Reporting Initiative (GRI)
 Integrated Reporting (IR)
Sustainability accounting and assurance
 Sustainability Accounting Standards Board (SASB)
 Sustainability assurance standards

5. Sustainability and
Sustainable
Business

6. 666
What is Sustainability?
Image – Ethical Corporation

7. 777
Green Growth
Indicators
The 3Rs
Reduce
Reuse
Recycle

8. 888
More than Green Initiatives
“CORPORATE SUSTAINABILITY IS A
COMPANY’S DELIVERY OF LONG-TERM
VALUE IN FINANCIAL, ENVIRONMENTAL,
SOCIAL AND ETHICAL TERMS.”

9. 999
Life Cycle of
a Pair of Levi
Jeans

10. Sustainability
Reporting
Frameworks

11. 111111
Sustainability Accounting and
Reporting
Triple
Bottom Line
• Economic Viability
• Social Responsibility
• Environmental
Responsibility

12. 121212
Major Sustainability Frameworks

13. 131313
Data and Reporting Considerations
• Relevant
• Consistent
• Comparable
• Clear and
understandable
• Inter-connected
• Forward-looking
Data
• Materiality
• Reporting boundary
• Reporting period
• Faithful
representation
• Assurance
Reporting

14. 141414
Climate Disclosure
Standards Board
CDSB is an international
consortium of business
and environmental
organizations
committed to the
integration of climate
change-related
information into
mainstream corporate
reporting.
“CDSB
connects
corporate
non-financial
reporting
approaches”

15. 151515
Global Reporting
Initiative – New GRI
G4 Guidelines
 Designed to be a universally recognized
standard
 Compatible with other frameworks
including Integrated Reporting
 G4 Focus on -
Materiality
Key stakeholder views
Link between business strategy, operations and
sustainability impacts

16. 161616
GRI Content – Aspects and
Boundaries
Boundaries
Assess whether inside or outside
of organization
Own operations, suppliers,
distributors, etc.
Aspects
Significant economic,
environmental and social
impacts, that
Substantively influence
assessments and decisions of
stakeholders

17. 171717
GRI – Types of disclosures
• Overall context
• Reporting process
• Seven types of GSDs
General Standard
Disclosures
• Why material
• How managed
• How evaluated
Management
Approach (DMA)
• Comparable information
• Primarily quantitative
• Indicators in G4
Indicators

18. 181818
GRI – Scoping Decision
Core
Essential
elements -
DMA
+ One indicator
for all material
Aspects
Comprehensive
Additional
Disclosures
+ All indicators
for all material
Aspects

19. 191919
G4 Economic and Environmental Aspects
Economic Aspects
• Performance
• Market Presence
• Indirect Impacts
• Procurement Practices
Environmental Aspects
• Materials
• Energy
• Water
• Effluents and Waste
• Biodiversity
• Emissions
• Other

20. 202020
G4 Social- Sub-categories and Aspects
Labor Practices and Decent Work
• Labor relations
• Occupational health and safety
• Diversity and equal opportunity
Human Rights
• Child labor
• Freedom of association and collective bargaining
• Non-discrimination
Society
• Local communities
• Anti-corruption
• Compliance
Product Responsibility
• Customer health and safety
• Privacy
• Product and service labeling

21. Integrated
Reporting

22. 222222
What is Integrated Reporting?
The primary purpose
of an integrated
report is to explain to
providers of financial
capital how an
organization creates
value over time.
International Integrated
Reporting Committee

23. 232323
Key Concepts of Integrated
Reporting
 The creation of value
 The use of “capitals”
 The definition of the organization’s
business model
 Integrated thinking

24. 242424
What is Integrated Thinking?
Integrated thinking begins with a
thorough understanding of the business
model within the context of the external
environment.
This understanding creates a more robust
basis for identifying risks and
opportunities.
Integrated thinking helps companies
develop a better understanding of
financial and non-financial factors and
how they impact their businesses.

25. 252525
Traditional Financial Statement
Model

26. 262626
Integrated Reporting Model
International Integrated
Reporting Committee

27. 272727
Integrated Report Content Elements
Organizational overview and external environment
Governance
Business model
Risks and opportunities
Strategy and resource allocation
Performance
Outlook

28. 282828
IIRC Vision
Integrated
Thinking
Integrated
Reporting
Capital
Allocation
Financial
Stability
Sustainability

29. 292929
What companies are doing -

30. Sustainability
Accounting and
Assurance
Standards

31. 313131
Sustainability Assurance Standards
 AA1000, Assurance Standard (2008) - an open-
source set of principles that focuses on addressing
CSR issues developed by AccountAbility
 ISAE 3000 (2003) - Assurance Engagements Other
Than Audits or Reviews of Historical Financial
Information, a set of basic principles and procedures
for nonfinancial assurance engagements
 ISAE 3410 (2012) - Assurance Engagements on
Greenhouse Gas Statements
 AICPA SOP 13-1 (2013) - Attest Engagements on
Greenhouse Gas Emissions Information

32. 323232
Sustainability Accounting Standards
Board (SASB)
The Sustainability
Accounting Standards
Board (SASB)
provides
sustainability
accounting standards
for use by publicly-
listed corporations in
the U.S. in disclosing
material sustainability
issues for the benefit
of investors and the
public.
SASB Unique focus:
U.S. public equities
Industry-specific issues
Disclosure of minimum
performance standards

33. Questions?
Thank you!
Ken Witt – kwitt@aicpa.org
John DeRose – John.DeRose@ey.com