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Sustainability: How CPAs Can Help Save the Earth

Mary-Jo Kranacher, MBA, CPA/CFF, CFE

Environmental sustainability has taken center stage as the responsible and successful way to operate a business in the 21st century. According to the U.S. Environmental Protection Agency, “Sustainability creates and maintains the conditions under which humans and nature can exist in productive harmony” (http://www.epa.gov/sustainability/basicinfo.htm). It is essential to ensuring the continued availability of water, materials, and other natural resources needed to safeguard human health, while also balancing the environmental, social equity, and economic demands of present and future generations.

Large corporations, such as Walmart and the Ford Motor Company, have already followed the impetus to “go green.” Some achievements cited in Walmart's 2013 Global Responsibility Report include the installation of doors on refrigerated supermarket cases in Brazil and Mexico, as well as a change to higher efficiency motors for walk-in coolers and freezers in the United States and Puerto Rico. Ford reduced the carbon dioxide emissions from its vehicles by 37% from 2000 to 2010, and the company is planning an additional 30% decrease by 2025. Ford also substantially reduced the amount of waste it sent to landfills by sending paint solids from its factories to utility plants for use as a fuel source. Ford's CFO, Robert L. Shanks, has made it clear that the company's sustainability decision is part of a larger strategy to enhance its financial stability and profitability.

The CPA's Role

Sustainability efforts are increasingly becoming the responsibility of those in control of an organization's purse strings, and most financial experts relate to the bottom line—a business can't be sustainable if it isn't profitable. But are sustainability and profitability mutually exclusive? The following ideas (inspired by the Sustainability Initiative) represent some strategies that a business can use to enhance its sustainability efforts while improving its profitability:

  • Use automation to control costs. Automation can help businesses work more efficiently, reduce labor costs, and control energy usage.

  • Reduce chemical use. This can save money and can represent an appealing marketing aspect for consumers.

  • Use energy efficiently. This can control costs while reducing one's carbon footprint. According to the U.S. Department of Energy, “Quality LED products can last 25 times longer than an incandescent bulb and use 75% less energy” (http://www.energy.gov/energysaver/articles/led-lighting).

  • Consider alternative resources. Advancements in technology have made renewable energy sources, such as wind and solar, viable options for business. Durable and fast-growing wood, such as bamboo, helps to ensure a plentiful supply of materials to satisfy customer demand.

  • Conserve water. Rainwater recapture systems used by greenhouse businesses have helped to add to the bottom line while saving a precious resource.

  • Consider logistics. Better product tracking from shipping point to destination can improve the efficiency of the shipping process and enhance customer relations.

Whenever businesses—especially small businesses—consider going green, one primary concern has been the cost-benefit relationship. In reality, businesses that are serious about sustainability are focused on the efficient use of limited resources. The examples above challenge the common misconception that going green will cost more. Sustainability and profitability are not actually at odds with one another; rather, they are complementary.

Looking to the Future

We've already begun to see the effects of energy-related carbon dioxide emissions and the resulting rise in temperatures: droughts, heat waves, changing rainfall patterns, rising sea levels, and floods. This is just the tip of the iceberg.

So, CPAs, here's your chance to be a superhero. Whether you're a trusted advisor within your company or to your firm's clients, you can help save the earth by making sustainability-conscious decisions.

As always, I welcome your comments.

The opinions expressed here are my own and do not reflect those of the NYSSCPA, its management, or its staff.

Mary-Jo Kranacher, MBA, CPA/CFF, CFE. Editor-in-Chief. ACFE Endowed Professor of Fraud Examination, York College, The City University of New York (CUNY), mkranacher@nysscpa.org.

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