ESG & Sustainability
ESG & Sustainability
Joe Donnelly
CPA
Principal
Ed Mahon
Principal
Caitlin M. Humrickhouse
M.P.A., SWP
Principal
Mark Herzinger
Principal
The rise of sustainability risks and regulations
Companies face a multitude of emerging regulations and increasing risks surrounding their sustainability disclosures. Baker Tilly provides critical support across the lifecycle from baselining emissions, to setting goals and developing strategies to decarbonize, to assurance and reporting. Setting achievable goals is essential in the ESG reporting space and this can only be done with a strong baseline, benchmarking and technical and economic analysis.
Explore end-to-end corporate sustainability solutions
ESG and sustainability reporting is no longer a voluntary exercise and can be a risk to corporate reputation if done without rigorous analysis, processes, controls, and governance. As regulations evolve, the sustainability disclosures including non-financial data require the same rigor as financial statement reporting to meet investor grade standards. As a trusted CPA firm with a long history in reporting readiness and assurance services, we are uniquely positioned to guide organizations through evolving regulatory requirements and meet the highest standards of data integrity and transparency demands. Our approach recognizes the challenges of integrating sustainability reporting with traditional financial functions and systems. Our ESG advisory engagements include both CPA and sustainability specialists to ensure seamless integration and help companies bridge these two disciplines. Baker Tilly can help organizations prepare for the future of sustainability reporting, today.
- Reporting
- Assurance
- Strategy
Reporting
Organizations face a multitude of emerging regulations and increasing risks surrounding their sustainability disclosures. As environmental, social and governance (ESG) moves from a voluntary opportunity to a compliance process, companies must navigate how to prepare their data collection and reporting for materiality, accuracy and assurance. We help clients understand a myriad of regulations, develop processes and controls to address regulatory requirements and advise the development of disclosures to meet assurance requirements.
Capabilities:
- Materiality assessments: Assist in the process to identify material ESG and sustainability topics utilizing either a single (financial) or double (financial and societal impact) approach to materiality in compliance with regulations such as the Corporate Sustainability Reporting Directive (CSRD) or standards such as the International Sustainability Standards Board (ISSB).
- ESG and sustainability reporting: Assist with drafting ESG and sustainability disclosures aligned with frameworks such as ISSB or Global Reporting Initiative (GRI), comply with regulatory reporting requirements such as the California Climate Corporate Data Accountability Act, SEC Climate Rule or the European Union’s CSRD and address vendor questionnaires such as EcoVadis or CDP (formerly Carbon Disclosure Project).
- Climate-related risk reporting: Utilizing the Task Force on Climate-related Financial Disclosures (TCFD) framework, assess current risk management processes, identify climate-related risks and opportunities and evaluate their associated impacts. Develop risk responses and mitigation plans considering your organization’s risk tolerance and strategic priorities.
- Greenhouse gas (GHG) emissions reporting: Assist with data gathering and reporting for scope 1, 2 and 3 greenhouse gas emissions utilizing the GHG protocol standards. Develop standard policies and procedures for carbon accounting utilizing Inventory Management Plans (IMP).
- Data solutions: Derive value from data, through advanced machine learning, data visualization and implementing new data to support digital sustainability initiatives and establish a “single source of truth”.
Assurance
As ESG disclosures are increasingly scrutinized by investors and regulators, third-party assurance is a foundational part of sustainability reporting integrity. As a trusted CPA firm with specialized skills and deep knowledge, third-party assurance provides stakeholders with confidence in the accuracy of data, compliance with regulatory standards and safeguards against allegations of greenwashing.
Capabilities:
- Assurance readiness: Assess the systems, controls and processes to collect, report and comply with selected frameworks, metrics and regulatory reporting requirements. Support the identification and design of controls over sustainability reporting.
- Limited assurance: Performed under the American Institute of Certified Public Accountants (AICPA) standards, provide limited assurance conclusion over Corporate Social Responsibility (CSR) reports, required disclosures, GHG emissions, ESG and sustainability data, metrics and reporting in accordance with applicable frameworks and standards.
- Reasonable assurance: Performed under AICPA standards, provide reasonable assurance opinion over CSR reports, required disclosures, GHG emissions, ESG and sustainability data metrics and reporting in accordance with applicable frameworks and standards.
- Internal controls: Identify, design and evaluate internal controls over sustainability reporting. Integrate ESG and sustainability risks into your internal audit plan and assist with the evaluation of related risks. Assist in the development of systems, controls and processes to collect, report and comply with selected frameworks, metrics and regulatory reporting requirements.
Strategy
Corporate sustainability remains a highly dynamic discipline and best practices are evolving for every industry. As stakeholder expectations for corporate transparency grow, companies must stay ahead of industry trends and peers to realize the full value of sustainability reporting. Action toward an intentional ESG and sustainability strategy will help your organization manage risks, prepare for regulatory reporting and compliance requirements, heighten market competitiveness and ultimately drive growth.
Capabilities*:
- Current state assessment: Assess current state performance of current policies, procedures, measurement systems and data collection sources through regulatory reporting requirements, frameworks and peer benchmarking. Provide prioritized recommendations to improve performance and address gaps.
- Ratings and questionnaires: Enhance reporting processes to meet vendor and rating agency information requests and improve scoring.
- Target and goal-setting: Develop an ESG and sustainability vision and set goals aligned with the organization’s strategy and based on deep techno-economic analysis. Develop metrics and targets to establish key performance indicators (KPIs) and collect relevant data to measure, monitor and track progress against the goals.
- Scope 1 and 2 reduction roadmap: Conduct scenario-based techno-economic analyses to determine the best path for achieving decarbonization goals. Building or leveraging existing GHG baseline data, site, market, and client information to develop scenarios for scope 1 and 2 reductions and building Science Based Initiative (SBI) goals and roadmaps for achieving those goals including energy efficiency, operational improvements and efficiencies, energy generation and storage options.
- Scope 1 and 2 decarbonization strategy: Assess pathways to decarbonization and net zero, strategies for climate resilience, operational efficiency, system energy efficiency, and electrification. These strategies span industries and organizations (ex. industrial, energy, transportation, real estate, finance) and provide a clear pathway to abate emissions through a lens of economic feasibility.
- Energy market analysis: Determine current market opportunities to support decarbonization strategies, including energy procurement analysis, emerging technology analysis, site due diligence and selection, funding and grant support, fleet transition analysis, and regulatory analysis to determine the best levers to support decarbonization.
- Energy feasibility studies: Project-specific determinations of various clean thermal and electrical energy options, including feasibility of solar, wind, landfill gas, renewable diesel and natural gas, carbon capture and storage, battery storage, digital technologies and other technology solutions. Studies also address operational and building efficiency.
- Green cloud services: Transition to green cloud operations with implementations to minimize your firm’s energy consumption, carbon emissions, and resource utilization such as AWS, Oracle, and Microsoft Azure.
- IRA tax advisory: Assess businesses and projects to determine alignment with IRA funding and provide actionable steps to qualify for available tax credits.
- Tax credit marketplace solutions: If an organization has a surplus of tax credits or seeks to purchase qualifying credits, our Ever.green clean energy product funding and tax credit marketplace provides opportunities to sell and buy tax credits that are vetted, secure and compliant with regulatory requirements.
- Green and social bond designation: Provide support with bond issuance for any type of environmental or social impact designation to improve bond pricing and placement outcomes.
*Flex capability
We can support implementation of recommendations, address gaps and otherwise provide ongoing support as an outsourced sustainability function. This includes evaluation and implementation of ESG and sustainability software solutions. This provides:
- A coordinated approach
- Depth and breadth of specialized skillsets and knowledge customized to your needs
- Increased efficiency and flexibility
Guiding insights
ESG controllers are here to stay: What you need to know
The ESG controller role can support and prepare companies as they mature their corporate sustainability reporting procedures.
Navigating the CSRD: A sustainability reporting guide for U.S. companies
U.S. companies doing business in Europe must consider and prepare for CSRD reporting and compliance.
Integrating the sustainability function with compliance, internal audit, accounting and IT
ESG and sustainability regulations require organizations to integrate the sustainability function with compliance, accounting, internal audit and technology teams.
Starting your ESG and sustainability journey
Organizations see many benefits to having an environmental, social and governance (ESG) and sustainability programs. These programs can be utilized to achieve operational cost savings, brand recognition and supply chain optimization if implemented effectively.
Compliance with the SEC’s climate disclosure rule
In this podcast, Baker Tilly principal sat down with Sustain. Life to discuss corporations’ compliance with the SEC’s climate disclosure rule.
Impacts of climate-related risk and reporting requirements
Baker Tilly discusses the business impacts of climate-related risk and reporting requirements for ESG and sustainability during IIA’s Great Audit Minds (GAM) conference.
Getting started with the SEC: A checklist for climate-related disclosures
This checklist helps companies navigate the SEC’s new climate-related disclosure requirements to prepare for reporting.
SEC announces final rules for climate-related disclosures
On March 6, 2024, the SEC announced final rules for climate-related disclosures, including the disclosure of material direct emissions.
Global regulations are reshaping corporate sustainability. Are U.S. companies prepared for mandatory reporting?
Organizations should assess the applicability of ESG and sustainability mandatory reporting regulations with Baker Tilly’s ESG regulation checklist.
ESG regulatory impacts to the middle market
Middle market companies should start evaluating their ESG risk and reporting needs now as a result of the ESG, sustainability and governance pressures from public companies.
How TCFD and the GHG protocol are driving ESG regulations
Don’t get lost navigating the U.S., U.K. and EU ESG regulations. Get started by developing an annual disclosure approach in alignment with the TCFD and GHG protocol.
Greenhouse gas emissions 101: GHG reporting basics
Organizations now face regulatory impacts and the need for GHG reporting, which can include scope 1, 2 and 3 emissions. Get started with the greenhouse gas reporting basics.
Companies are realizing the benefits of third-party ESG data assurance
ESG data assurance refers to the process of verifying and validating ESG data by a third-party assurance provider. Learn more about the importance of third-party assurance and the benefits it brings to ESG reporting and sustainability initiatives.
Federal Supplier Climate Risks and Resilience Proposed Rule would increase GHG emissions reporting requirements for federal contractors
The Federal Supplier Climate Risks and Resilience Proposed Rule will increase the transparency of climate-related information reported by federal contractors.
Is your internal audit function ready for ESG?
As the environmental, social and governance (ESG) landscape evolves, internal audit’s role is adapting to address emerging risk areas within an organization.
Aligning ESG risks with existing ERM program key for creating value, attracting talent
A successful environmental, social and governance (ESG) strategy should build on your existing enterprise risk management (ERM) program and align with an organization’s strategic initiatives and priorities.
Jump-start your sustainability road map with an ESG maturity assessment
Before building a strategic and intentional sustainability roadmap, an organization must assess the current state of ESG maturity against four levels – initial, growth, operational and transformational
Client stories
Printing and distribution company looks to boost EcoVadis score with assurance
A Wisconsin-based printing and distribution company is committed to environmental sustainability and boosts EcoVadis score with GHG emissions assurance.
Not-for-profit leverages GHG emissions reporting to improve OASIS+ RFP scoring
Not-for-profit establishes scope 1 and 2 GHG emissions calculations and self-assessment disclosure to meet OASIS+ contract RFP and proactively prepare for future reporting.
Not-for-profit makes internal reporting changes to align with its external ESG efforts
An organization that historically reported on external sustainability impact, as opposed to internal operations, prioritized advancing its ESG efforts to become a leader in not-for-profit ESG reporting.
Controlled Thermal Resources builds a foundation to align ESG strategy with business strategy
Controlled Thermal Resource (CTR) proactively aligned sustainable business goals to an ESG strategy, resulting in a strong foundation for the company’s future state ESG disclosures.
Private equity firm packages existing initiatives to build ESG strategy
Private equity firm serving middle-market businesses builds an ESG strategy by evaluating existing initiatives and prioritizing topics relevant to investors.
Manufacturing and kitchen design company begins their ESG journey
Food service business manufacturing and service provider creates an ESG policy and framework to meet critical stakeholder needs and to streamline and enhance RFP submissions.
Metlakatla Indian Community keeps the lights on and replenishes resources by restructuring their utility
The Metlakatla Indian Community in southern Alaska faced the prospect of the lights going out due to climate change, loss of industry and outdated, inflexible management protocols. Learn how Baker Tilly’s tribal services team mitigated the immediate crisis and developed a new management structure to better equip future generations to face the energy challenges ahead.
Seneca Nation continues quest for energy independence
The Seneca Nation sought Baker Tilly’s tribal energy consultants for development of a strategic energy plan. Learn how the Nation is making strides toward sustainable energy independence, utilizing green energy and existing fossil resources to develop their community and protect future generations.
Media mentions
Connect with ESG leaders
Count on our ESG team to serve as an extension of your organization. We leverage industry specialization to understand the regulatory, operational, financial and organizational pressures that organizations face. Our professionals are dedicated to helping clients drive ESG-related efficiencies, elevating them to become best-placed within their industries.
Beyond Tomorrow™
ESG is not a checkbox for Baker Tilly
To us, ESG means erasing the boundaries between company, client, community and planet. It means understanding how our organization can do its part to help nurture a more connected world.
We intend to dedicate ourselves to making a difference inside and outside our organization. Our impact will be traceable through our footprints and fingerprints and will leave a legacy that will last Beyond Tomorrow.