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Anderson ZurMuehlen assurance leader and shareholder, Jill Galle, recently blogged, “A positive ESG profile has become table stakes to standing out in the private sector. Focus on Environmental, Social, and Governance Issues is Rising and may likely change the way you operate your business and your household… Brace yourself, ESG is Coming.”

Jill Galle | CPA, Shareholder • Anderson ZurMuehlen

What Is ESG and Why Is It Important?

How businesses navigate, manage and report their Environmental, Social, and Governance “ESG” activities and intentions is of rising interest in the public eye.  A company’s image may make a difference in attracting a valuable customer, recruiting and retaining top talent, or securing capital from investors and lenders. 

Business Leaders Respond

The world’s richest man and Tesla CEO, tweeted his displeasure in 2021 when his company’s ESG score was downgraded.  Launched in 2019, the S&P 500 ESG Index measures the stock value of some of the largest companies by market capitalization listed in the U.S. which meet specific sustainability criteria. It is similar in scope to the original S&P 500 Index but aims to help investors choose between companies based on their commitment to strong environmental, social, and governance goals.

While Tesla and the large-cap public companies operate in a different circle than Anderson ZurMuehlen and the clients we serve, our firm closely monitors contemporary developments in our industry, like ESG.  In June, shareholders from Anderson ZurMuehlen attending the BDO USA Alliance conference listened keenly to the keynote speaker presentation from Barry Melancon, President, and CEO of the American Institute of Certified Public Accountants. 

Mr. Melancon explained that ESG is not solely a metric for public companies; it is relevant and strategically important for privately owned small and mid-sized companies and their constituents.  The more effective a business of any size can measure, report, and promote its ESG performance, the more likely it will thrive in the modern marketplace.

The AICPA is currently developing tools and reporting standards for member firms to assist their clients in accomplishing their ESG objectives.  The professionals at Anderson ZurMuehlen are closely following these developments.  Please contact your advisor at Anderson ZurMuehlen to discuss this topic and how we can assist you in enhancing and promoting your ESG image.

This article was written by Bill Mills, CPA and Shareholder in our Bozeman office.

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