Beyond Traditional Financial Statements

September 26, 2018

Presented by:

Today’s Speakers

Desiré CarrollSenior Technical

Manager AICPA

Christopher McClurePartner

Crowe LLP

Jessica GehlManager, Sustainability Services

and Risk ManagementPwC

What You Will Learn

• Sustainability reporting and assurance trends and opportunities;

• Trends on the intersection of Public and Private companies as it relates to supply chain management

• Real world examples of how CPAs are helping companies in this rapidly evolving landscape

• Developments in integrating ESG into traditional Enterprise Risk Management (ERM)

• Trends in SDG reporting

Join Sustainable Brands and AICPA at New Metrics ‘18Use code

JoinUs for a 20% discount!

October 29-31, 2018Philadelphia, PA

NewMetrics18.com/registration

Sustainability Reporting & Assurance

Desiré CarrollSenior Technical

Manager AICPA

Sustainability Reporting Trends

Sustainability

Environmental, Social and Governance (ESG)

Corporate Social Responsibility (CSR)

US: S&P 500

2011: 20%2017: 85%

Source: KPMG Survey of Corporate Responsibility Reporting 2017

Source: G&A Institute

Sustainability Assurance Trends

Global growth in independent assurance of CR information

US: S&P 500

2015: 14%2016: 16%

Source:The Conference Board/Bloomberg, 2017 https://www.cpajournal.com/2018/07/20/sustainability-assurance-services/

CPA Roles in the Sustainability Accounting Cycle

Strategy

Risk Management

Performance Measurement

Sustainability Reporting

Sustainability Assurance

Source: Adapted from Accounting for the Sustainability Cycle – How the Accounting Profession can Add Value to Sustainability-Oriented Activities – Brian Ballou, Dan L. Heitger and Charles E. Landes

Coming soon from COSO & WBCSD:

Applying Enterprise Risk Management to Environmental,

Social and Governance-related Risks AICPA & SASB

Educational EventOct 11, NYC

AICPA Sustainability-Related Resources

1. Free sustainability toolkita. Sustainability assurance brochure b. Sustainability assurance backgrounderc. Key definitions – one pager d. 7 steps to implementing the SGDs

2. Sustainability attestation guide

3. Free AICPA & SASB educational event on sustainability reporting and assurance - NYC, October 11

4. General sustainability resources: www.aicpa.org/sustainability

5. Coming soon: Sustainability attestation CPE course (Dec)

Supply Chain

Christopher McClurePartner

Crowe LLP

© 2017 Crowe Horwath International 1111

Sustainability Topics – Supply Chain The Intersection of Public

and Private Companies

➢ Regulatory Drivers

➢ Conflict Minerals US / EU / Globally

➢ Anti-Human Trafficking California / UK

➢ Prop 65 / REACH / RoHS

➢ Corruption / Anti-Bribery

➢ EU Non-Financial Disclosure Directive

➢ Reputational Concerns

➢ Socially Responsible Investors

➢ Companies must ask themselves: What role do we play in the community? How are we managing our impact on the environment?

Are we working to create a diverse workforce?

➢ Compliance Trends

© 2017 Crowe Horwath International 1212

What are Conflict Minerals?

• The following commercial ores and their derivatives from the

Democratic Republic of the Congo (“DRC”) and adjoining

countries*:

• Tantalum – Extracted from Columbite-tantalite (also known as

coltan)

• 17% of the world’s supply is from the DRC

• Tin – Extracted from Cassiterite

• 4% of the world’s supply is from the DRC

• Tungsten – Extracted from Wolframite

• 3% of the world’s supply is from the DRC

• Gold

• 2% of the world’s supply is from the DRC

* Adjoining Countries refers to the

following countries that presently share

an internationally recognized border

with the DRC: Angola, Burundi, Central

African Republic, the Republic of the

Congo, Rwanda, South Sudan, Tanzania,

Uganda, and Zambia.

© 2017 Crowe Horwath International 1313

EU Non-Financial Disclosure

Large public-interest entities with more than 500 employees should disclose in their management report

relevant and useful information on the policies, main risks and outcomes relating to:

• The Environment

• Social and Employee matters

• Human Rights

• Anti-corruption

• Anti-bribery

• Diversity on their board of directors

• Companies are encouraged to align their disclosures with recognized guidelines such as:

• UN Global Compact

• OECD Guidelines for Multinational Enterprises

• ISO 26000

© 2018 Crowe Global 14

Pulling it All Together Comprehensive Programs

1. Assess

Obligations

and

Company

Goals

4. Establish

“compliance

calendar”

3. Leverage and

combine outreach

efforts

2. Conduct Risk

Assessment

5. Scorecards to

measure success

© 2017 Crowe Horwath International 1515

Key Resources

✓ https://www.crowe.com/insights/issues/conflict-minerals

✓ http://www.responsiblebusiness.org/initiatives/rmi/

✓ https://www.globalreporting.org/standards

✓ https://www.sourcingnetwork.org/

✓ https://www.amnesty.org/en/latest/news/2017/11/industry-giants-fail-to-tackle-child-labour-allegations-in-cobalt-battery-

supply-chains/

✓ https://www.blackrock.com/corporate/investor-relations/larry-fink-ceo-letter

© 2017 Crowe Horwath International 1616

Integrated Reporting & SDG’s

Jessica GehlManager, Sustainability

Services and Risk Management

PwC

QUESTIONS?

Join Sustainable Brands and AICPA at New Metrics ‘18Use code

JoinUs for a 20% discount!

October 29-31, 2018Philadelphia, PA

NewMetrics18.com/registration