Insight Magazine September / October 2008

Eco -minded CFOs see the green

Low - cost, highimpact sustainability

Business greening: altruism or greenwashing?

Environmental accounting comes of age

Goodbye office park, hello green office

Have a conscience, see the profits

Illinois legislators push for green

Follow in big business’ green footsteps

Track your corporate social responsibility

Green investing: Will the bubble burst?

Eco -friendly tax incentives

Plus, How Green Are You? survey results

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36 The Visionary CFO

CFOs across the nation are waking up to the legitimate call for corporate greening

40 Saved

High-impact, low - cost ways to green your office and pad your budget.

46 The Greening of Business

Is ecological economics an altruistic money pit? Or can going green actually improve the bottom line over time?

10

Research How Green are You?

Is Illinois’ finance community answering the call for greening?

12 Corporate Finance Follow the Leaders

The biggies are taking leaps and bounds towards the Green Zone

16 Bottom Line Green for Green

Is environmentalism worth it to you?

18 Workplace Office 2040

The workplace of the future will be anything but gray.

22 Young Professionals Tree Huggers Wanted

“ Think Green” is the motto of the 21st century finance pro

24 Reporting CSR on the Radar

Your impact on society, the economy and the environment is now crystal clear

28 Investing Birth of a Bubble

While investors see green technology companies as the next panacea, financial experts cast their minds back to the dotcom bubble that burst

30

Government Lincoln Green

Illinois lawmakers still have a long way to go on the road to environmental sustainability

34 Tax Environmental Tax

Do you know your solar from your hydro?

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SM

There’s no denying or escaping the fast pace of our 21st century lives. Change happens at an ever-quickening rate. Tomorrow our morning paper may be unrecognizable and our cell phone outdated

The same is true of our profession In what seemed like only a moment to catch our breath following issues of financial fraud and the passage of Sarbanes-Oxley, comes another fundamental change: The introduction of International Financial Reporting Standards (IFRS).

Are we up to this latest challenge which asks us to drastically rethink our way of doing business? There’s been a lot of talk

a b o u t g o i n g g l o b a l ; n o w t h a t g l o b a l a c c o u n t i n g i s o n o u r doorsteps, does it seem just too close to home? Can we adapt and redefine ourselves?

The world is showing a preference for IFRS over Generally

A c c e p t e d A c c o u n t i n g P r i n c i p l e s ( G A A P ) T h e S e c u r i t y a n d Exchange Commission (SEC) has already proposed a timetable f o r t r a n s i t i o n i n g p u b l i c l y t r a d

a

r e p o r t i n g s t a n d a r d s D e s p i t e o n g o i n g p u b l i c d e b a t e o v e r i t s pros and cons, IFRS is gaining momentum By some accounts, it could be a reality as early as 2011

What we choose to do in these next two years is critical. Rather than just debating the issues or taking a wait-and-see approach, the Society is getting right down to the work of planning, and preparing and educating our members If you haven’t already done so, check out the IFRS section on our website (www icpas org) for answers to your questions, as well as materials and resources.

A task force headed by Immediate Past Chairperson Debra Hopkins is exploring ways to educate members, identify and assist in reconciling practice issues, and reach out to our network of educators on all IFRS-related issues, such as changes to curricula, books and materials, and even the CPA Exam

All of us will be affected by the switch to IFRS. It may seem that only big companies with international clients need to worry, but repercussions will be felt from the largest to the smallest CPA firm, and even by the general public.

The global reach is wide, whether we’re talking about going green (the theme for this month’s issue of INSIGHT) or changing accounting standards. Each requires coming together from all corners of our small worlds for something better, be it a quality set of standards or a livable environment for generations to come. The world is changing How that change happens is up to us

ICPAS

President & CEO

I C P A S O F F I C E R S

C h a i r p e r s o n , D e b r a R H o p k i n s , C P A Northern Illinois University CPA Review S e n i

n Sheldon P Holzman, CPA Virchow Krause & Company LLP V

Sara J Mikuta, CPA The Leaders Bank V

Ira Solomon, CPA University of Illinois V i c e

a

r p e r s o n , Kathryn A Stanton, CPA Follett Corporation

Publisher Elaine Weiss

Editor-in-Chief

Publications Director

Judy Giannetto

Creative Director

Gene Levitan

Design Manager

Rosa Garcia Mary Burr

Assistant Editor Derrick Lilly

National Sales & Advertising

Patrick Filippelli pfi l i ppel l i @ connect2amc com

Lindsay Lozmack l l ozmack@ connect2amc com

Advertising Sales Associate Tito Apatira apati rat@ i cpas org

Circulation Jim Jarocki j arocki j @ i cpas org

Editorial Office 550 W Jackson, Suite 900, Chicago, IL 60661

Advertising Sales Office 4700 W Lake Avenue, Glenview, IL 60025

INSIGHT is the official magazine of the Illinois CPA Society, 550 W Jackson, Suite 900, Chicago, IL 60661, USA Its purpose is to serve as the primary news and information vehicle for some 23,000 CPA members and professional affiliates Statements or articles of opinion appearing in INSIGHT are not necessarily the views of the Illinois CPA Society The materials and information contained within INSIGHT are offered as information only and not as practice, financial, accounting, legal or other professional advice Readers are strongly encouraged to consult with an appropriate professional advisor before acting on the information contained in this publication It is INSIGHT’s policy not to knowingly accept advertising that discriminates on the basis of race, religion, sex, age or origin The Illinois CPA Society reserves the right to reject paid advertising that does not meet INSIGHT’s qualifications or that may detract from its professional and ethical standards The Illinois CPA Society does not necessarily endorse the non-Society resources, services or products that may appear or be referenced within INSIGHT, and makes no representation or warranties about the products or services they may provide or their accuracy or claims The Illinois CPA Society does not guarantee delivery dates for INSIGHT The Society disclaims all warranties, express or implied, and assumes no responsibility whatsoever for damages incurred as a result of delays in delivering INSIGHT INSIGHT (ISSN-1053-8542) is published bimonthly except monthly in July and August by the Illinois CPA Society, 550 W Jackson, Suite 900, Chicago, IL 60661, USA, 312-993-0393 or 800993-0393, fax 312-993-0307 Subscription price for nonmembers: $30 U S , $40 Canada and International addresses, $42 Mexico Copyright © 2008 No part of the contents may be reproduced by any means without the written consent of INSIGHT Permission requests may be sent to: Editorial Director, at the address above Periodicals postage paid at Chicago, IL and at additional mailing offices POSTMASTER: Send address changes to: INSIGHT, I l l i n o i s C PA S o c i e t y, 550 W Jackson, Suite 900, Chicago, IL 60661, U S A

I C P A S B O A R D O F D I R E C T O R S

Therese M Bobek, CPA PricewaterhouseCoopers LLP

Robert E Cameron, CPA Cameron Smith & Company PC

William J Cernugel, CPA Alberto - Culver Company (Retired)

Daniel J Fensin, CPA Blackman Kallick LLP

Anthony Fuller Grant Thornton LLP

William P Graf, CPA Deloitte & Touche LLP

James P Jones, CPA Edward Don & Company

Charles G Kuyk III, CPA Crowe Chizek & Co LLC

Annette M O’Connor, CPA RR Donnelley Logistics

Mary Lou Pier, CPA Pier & Associates Ltd

S e c r e t a r y, ,

o n n i e S W a t k i n s , C P A Lakeside Bank (Retired) Tr e a s u r e r, , Lee A Gould, CPA Gould & Pakter Associates LLC

I m m e d i a t e Pa s t C h a i r p e r s o n , Lawrence A Wojcik, CPA DLA Piper US LLP

Marian Powers, PhD Northwestern University

Eunice K Sullivan, CPA S&P Tax Solutions Ltd

Mary Ann Webb, CPA Sulaski & Webb, CPAs

Ray Whittington, CPA DePaul University

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Banking Execs See Green

I B T E n t e r p r i s e s ’ 2008 Market Pul se Survey r e v e a l e d t h a t g o i n g green is no longer just a trend or an environmentalist initiative Of the 124 predominantly bank and credit union financial executives who participated in the survey, 70 percent said “being green” is important to their financial institutions not only for the good of the environment, but also for reasons of reduced operating costs and importance to members and customers. In fact, 86 percent of survey participants said being green is important to their clientele “We have found that green efforts tend to start small but grow into important initiatives,” said Tom Tedrow, IBT Enterprises vice president of design and construction services. “Like many organizations, banks and credit unions truly understand the benefits associated with going green ”

V i si t www.i btenterpri ses.com or www.arketi .com for more.

12 trillion

The Greensource List

Call them “ greensources ” places you can go online to find resources, ideas, tips and trends for ways to make your business world a little greener Here is a partial list Some websites provide links to other useful sites

The Green Business Alliance

www greenbusinessalliance com/go - green- business aspx Become green by following the alliance’s Greenify™ program.

Xerox Calculator

www consulting xerox com/flash/thoughtleaders/suscalc/xerox

Calc html

Use this plug-in-the -numbers calculator to determine how much energy, waste and greenhouse gas emissions can be reduced by making changes to your office products

GreenBiz

www greenbiz com

Get the latest on all things relating to business and the environment, as well as a daily news round-up and the weekly GreenBuzz newsletter A similar site, www environmentalleader com, is aimed at company executives

Texas A&M University

acct tam u edu:8 0 /sm ith/env acct/envm ain htm

Accounting professor L Murphy Smith talks about environmental auditing and accounting issues

Environmental Defense Fund

www edf org

A cc ess c o m pr ehensi ve research, c om bi ned wi th the l atest news and ideas to promote the green life

Database of State Incentives for Renewables & Efficiency

www dsireusa org

Get state -by- state rundowns of energy- saving credits and incentives, as well as green federal incentives.

3 Ways to Stop Unwanted Mail

1. Remove the name of your business or employees from major mail databases like Dun & Bradstreet and InfoUSA

2 Purge former employees from existing mailing lists

The Ecological Mail Coalition allows businesses to remove employees from marketers’ lists for free

3 Prevent companies from adding your business to mailing lists in the first place. Specifically, ask to be excluded from mailing lists at conferences and events, and while placing orders.

For more mai l reducti on ti ps, vi si t www go- green com

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ChrisVitrano MarketingDirector ec-connection Milwaukee,Wisconsin

$2.1 billion

T h e a m o u n t G o l d m a n S a c h s i n v e s t e d in alternative energy projects last year.

Green Technology FYI

Green Technology Forum Director, George Elvin, says that leading green technology advances in the years ahead will include:

• Solar nanotechnology “[N]anotech-based cells like those m a d e b y N a n o s o l a r c a n b e p r i n t e d o n p l a s t i c o r m e t a l substrates, making them much less expensive than silicon ”

• L i g n o s i c c e l l u l o s e - b a s e d b i o f u e l s “ C o m p a n i e s l i k e Range Fuels are perfecting techniques that will enable us to make fuel from trees and agricultural waste ”

• Algae -based biofuels. “A number of companies worldwide a r e w o r k i n g t o m a k e f u e l f r o m a l g a e , w h i c h i s c h e a p t o grow, requires little energy input and doesn’t compete for cropland the way corn does ”

• Carbon sequestration “New technologies will enable us t o s t o r e c a r b o n u n d e r g r o u n d o r i n o c e a n s r a t h e r t h a n release it into the atmosphere ”

INSIGHT Wins Award

INSIGHT Magazine has been awarded a Communications Concepts 2008 Apex Award for Publication Excellence in the category of Magazine & Journal Writing (for the May/June 2007 Small Business Special Issue). This is the 20th annual Apex Award Program, which recognizes “excellence in publications work by professional communicators.” Since its redesign, INSIGHT has been honored with 12 industry awards Visit our archives at www icpas org/insight htm to read the winning issue

Citi Takes the “LEED”

A recent Commercial Property News (CPN) article by Dees Stribling revealed that financial powerhouse Citigroup, Inc. has entered into a new pilot portfolio program with the US Green Building Council (USGBC) to integrate permanent green building and operational measures into the company ’ s practices and facilities The portfolio program has been designed to cut the costs of LEED (Leadership in Energy and Environmental Design) certification and building operational expenses N e w C i t i Fi n a n c i a l b r a n c h e s i n A u s t i n , Te x a s a n d F l i n t , Mich , and the Citibank financial center in Warrington, Pa , are the first Citi branches to be certified in the pilot program Twenty- seven additional CitiFinancial and Citibank branches under construction are in the process of pursuing LEED certification Citi has already earned its first LEED certification for its office parks in Irving and Las Colinas, Texas, and has since been awarded LEED Gold certification for a new 15- story skyscraper in New York City For more on LEED certification and green building, visit www usgbc org

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How Green Are You?

Is Il linois’ finance community answering the call for greening?

By Judy Giannetto

W h e n a s k e d a b o u t t h e l e v e l o f i m p o rtance of green initiatives within their organi z a t i o n s , o n l y 2 2 p e rc e n t r e p o r t e d t h a t these i nitiatives are a high or moderately h i g h p r i o r i t y. T h e m a j o r i t y ( 4 3 p e rc e n t ) indicated that they are moderately important, while 35 percent stated that they are either not a priority or a low priority at best

nity. But engage it must.

Why? Because green isn’t just about improving air quality or preventing deforestation. That’s an extremely blinkered view. Rather, it’s about public image, employee retention, client satisfaction, marketability and, most important for most, the bottom line The Internet is swimming in studies, surveys and research that prove the point again and again and again…

Still adamant that environmental issues don’t impact your corner of the business world? Then cast your mind back to the boss who said information technology would never have a place in finance, and that no self-respecting, reputation-worthy accounting firm would need a website to market its services You get the point, right?

To g a i n i n s i g h t i n t o w h a t I l l i n o i s C PA s think about “the greening of business,” the I l l i n o i s C PA S o c i e t y r e c e n t l y s u r v e y e d a group of 113 ICPAS members all holding leadership and major decision-making positions, including CFO, controller, president, executive director, vice president, owner, principal and director of finance.

T h e m a j o r i t y ( 6 6 p e rc e n t ) w e r e d r a w n from small businesses (less than $50 million in annual revenues), with the next largest s e g m e n t ( 1 4 p e rc e n t ) r e p r e s e n t i n g l a rg e companies (over $250 million in revenues) Sixty-five percent of respondents identified themselves as business & industry, 20 percent as public practice, and 14 percent as nonprofit/government/education

Furthermore, only 11 percent stated that their organizations currently have a green policy in place, versus 84 percent who have no green policy Only 17 percent intend to implement a policy in the next 3 years. The majority (82 percent) either do not intend to implement a policy or don’t know whether a policy is on the horizon.

And yet, when asked about the importance of corporate social responsibility (CSR) to their organizations, only 6 percent responded “not at all.” In fact, 26 percent stated that it is very important, and 68 percent consider it to be moderately important

Ta k i n g a “ g l a s s i s h a l f f u l l ” a p p r o a c h , perhaps this indicates an awakening within t h e f i n a n c e i n d u s t r y a n a c k n o w l e d g ement that corporate social responsibility is important to business sustainability. However, a disconnect obviously exists between r e c o g n i t i o n a n d i m p l e m e n t a t i o n w h e n i t comes to the role of environmental issues in CSR programs.

Of the greening strategies outlined, the vast majority (69 percent) do make it a policy to recycle, with 61 percent encouraging t h e i r e m p l o y e e s t o d o s o . S i x t y p e rc e n t i n d i c a t e t h a t t h e i r o rg a n i z a t i o n s r e c y c l e p a p e r a n d p a p e r p r o d u c t s s p e c i f i c a l l y, w h i l e 4 8 p e rc e n t u s e r e c y c l a b l e s u p p l i e s and 44 percent refill ink cartridges Other high-scoring initiatives include energy-savi n g l i g h t i n g ( 4 8 p e rc e n t ) a n d p a p e r l e s s technologies (40 percent).

Among those organizations planning for t h e f u t u r e , t h e t o p t h r e e i n i t i a t i v e s u n d e r c o n s i d e r a t i o n a r e p a p e r l e s s t e c h n o l o g i e s

(43 percent), energy-saving lighting (33 p e r cent) and recyclable supplies (33 percent) Less popular are per-department paper quotas (71 percent not interested), initiating a double-sided print policy (57 percent not interested), owning, renting or leasing hybrid cars (48 percent not interested), using renewable energies (42 percent not interested), using biodegradable supplies (31 percent not interested), and installing water-filtering systems (34 percent not interested) It’s worth noting that, of the least popular greening strategies outlined, the top two paper quotas and double-sided printing offer companies the means to save money without any initial investment Are we missing a golden opportunity here?

Making it a policy to do business with green companies and suppliers also fell to the bottom of the list Only 19 percent indicated that they do indeed make this a policy

workplace practices, the numbers look a bit more promising. A whopping 81 percent of respondents favor teleconferencing and telemeetings, 57 percent support sensitivity to paper usage, 56 percent support telecommuting, and 40 percent support public transportation However, only 17 percent promote carpooling

Vital to an understanding of where we stand in the move towards greening is an awareness of the barriers to implementing green programs Topping the list of major obstacles is a commitment to other priorities (55 percent), followed by cost and not having enough time to devote to such programs (both at 28 percent) Considering that the majority of respondents herald from small businesses, the validity of these reasons isn’t hard to appreciate.

In light of these responses, you’d think that the question, “Do you support the government mandating green compliance among businesses in the United States,” would meet with a resounding

“No!” Surprisingly, though, the split was far more 50/50 48 percent do support government mandates, while 52 percent do not

In the context of the United States, the concept of green business is still in its infant stages, which is probably why some of the responses to this survey fall in the “split personality” category A point in fact:

“ G o i n g g r e e n w i l l p o s i t i v e l y i m p a c t t h e o rg a n i z a t i o n ’s p u b l i c image”:

Yes 53 percent No 28 percent

Not sure 19 percent

However, “Going green will help my organization hire and retain top recruits”:

Yes 11 percent

No 59 percent

Not sure 29 percent

A n d , “ G o i n g g r e e n w i l l b o o s t c u s t o m e r / c l i e n t l o y a l t y t o o u r product/service”:

Yes 24 percent

No 51 percent

Not sure 25 percent

Historically, perhaps, the finance industry has been cautious when it comes to jumping on bandwagons Caution isn’t a bad t h i n g R e s i s t a n c e t o c h a n g e , w h e t h e r i n b u s i n e s s p r a c t i c e s o r world view, is

W e wi sh to thank those ICPAS members who parti ci pated i n our survey Y our comments and i nvol vement are i nval uabl e to our conti nui ng efforts to meet the needs of an i ncreasi ngl y di verse membershi p

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Fol low the Leaders

The biggies are taking leaps and bounds towards the Green Zone

By Carolyn Tang

More an d more , gl ob al co rporate l e a d e r s a r e l e v e r a g i n g t h e i r r es o u rc e s a n d i n f l u e n c e t o p o s it i v e l y i m p a c t t h e e n v i r o n m e n t T h r o u g h t h e u s e o f a l t e r n a t i v e e n e rg y s o u rc e s , widespread recycling programs and other g r e e n - o r i e n t e d i n i t i a t i v e s , t h e f o l l o w i n g b i g n a m e fi r m s , a m o n g m a n y o t h e r s , a r e leading by example

KPMG “Cl i mate change i s now wi del y regarded as one of the most seri ous chall enges the worl d faces It has reached a ti ppi n g po i n t i n g l o ba l a w a r e n e s s a n d de m a n ds a g l o ba l r e s po n s e ” T i m o th y P

Fl ynn, Chai rman, KPMG Internati onal

KPMG recently announced a three-tiered global approach to help to address the challenges of climate change. The principal ambition of the financial firm’s “Global Green Initiative” is a 25-percent reduction of its carbon footprint by reducing waste and consumption of non-renewable resources It hopes to achieve this through energy-efficient building and alternatives to business travel, and by working with its business partners and selected not-for-profit organizations to identify verifiable and credible environmental programs

“[O]ur core values call for us to care for the communities where we live and work,” s a y s B r u c e P i l l e r, K P M G L L P ’s C h i c a g o managing partner.

The Chicago KPMG office recently completed an expansion of its work space area, i n w h i c h i t u s e d r e c y c l e d f u r n i s h i n g s a s opposed to new acquisitions “The calculated sustainability benefits of this furnishing decision include energy conservation equal to powering 4 6 homes for a year, disposal cost avoidance and conservation of landfill space,” says Piller

Additionally, the firm is increasing its use of recycled paper, leveraging digital-scanning technologies, and reducing its use of b o t t l e d w a t e r a n d d i s p o s a b l e b e v e r a g e containers, which is expected to result in a 10-percent decrease in waste volume

Furthermore, KPMG expects to reduce its o f f i c e - r e l a t e d e n e rg y c o n s u m p t i o n b y 5 percent by using green building standards o n a l l n e w o f f i c e c o n s t r u c t i o n , i n c l u d i n g the use of energy-conserving technology.

“As global citizens, KPMG member firms have responsibilities to do what we can to improve our impact on the environment,” says Piller “And we expect that by working together to raise awareness, apply our collective knowledge and put our ideas into action for improving the environmental perf o r m a n c e o f o u r b u s i n e s s a n d p r o m o t i n g change in our communities, KPMG will set t h e s t a n d a r d f o r t h o u g h t l e a d e r s h i p a n d m e a s u r a b l e r e s u l t s t h a t w i l l m o t i v a t e a l l global firms ”

Goldman Sachs “W e take seri ousl y our responsi bi l i ty for envi ronmental stewardshi p, and bel i eve that as a l eadi ng gl obal fi nanci al i nsti tuti on we shoul d pl ay a constructi ve rol e i n hel pi ng to address the chall enges faci ng the envi ronment ” Gol dman Sachs Envi ronmental Pol i cy Framework

In November 2005, Goldman Sachs announced an ambitious environmental policy framework, which outlined the firm’s phil o s o p h y t h a t c a p i t a l m a r k e t s “ c a n a n d should play an important role in addressing t o d a y ’s e n v i r o n m e n t a l c h a l l e n g e s ” T h e framework touches upon key topics such as climate change, ecosystem degradation and o t h e r c r i t i c a l e n v i r o n m e n t a l i s s u e s , a n d then defines how the firm intends to leverage its resources to find effective marketbased solutions to address those issues

“Goldman Sachs believes that a healthy environment is necessary for the well-being of society, our people and our business, and is the foundation for a sustainable and strong economy,” says Michael DuVally, spokesman for Goldman Sachs.

A c c o r d i n g t o D u Va l l y, t h e k e y t o t h e framework’s success is that it begins with a f o c u s o n m i n i m i z i n g o p e r a t i o n a l i m p a c t .

“

A c c o r d i n g l y, w e w i l l m a k e e f f o r t s t o ensure that our facilities and business prac-

tices adopt leading-edge environmental safeguards We will disclose the environmental impact of our operations and reduce those impacts, wherever possible,” he explains.

For example, the firm has committed to building environmentally sound procurement practices and incorporating environmental criteria into its supplier selection and review process Additionally, the firm seeks to purchase local products in order to reduce the environmental impact associated with shipping In accordance with these goals and others, Goldman Sachs releases an a nnual report that documents investments and actions taken in the context of the framework.

T h e f i r m f u r t h e r c o m m i t t e d t o i n v e s t i n g u p t o $ 1 b i l l i o n i n renewable energy and energy-efficiency projects By the end of 2006, it had surpassed that goal with an aggregate investment of more than $1 5 billion in alternative energy projects in the United States, Europe and Asia And in 2007, Goldman Sachs invested more than $600 million in new technologies related to alternative energy and energy efficiency.

Another way that the firm incorporates its environmental philosophy into the workplace is by leveraging its own core competencies to advance green measures For example, its investment arm actively incorporates an environmental review into its process for e v a l u a t i n g p o t e n t i a l i n v e s t m e n t s “ T h e e n v i r o n m e n t a l r e v i e w process is an integral part of our private equity investment groups’ d u e d i l i g e n c e r e v i e w o f c o m p a n i e s a n d t h e i r m a n a g e m e n t , ” explains DuVally. “The review process analyzes our prospective portfolio companies’ compliance with applicable environmental laws and regulations ”

HSBC “HSBC i s determi ned to devel op a sustai nabl e busi ness

Our sharehol ders, customers and empl oyees consi der these i ssues to be i m po r ta n t, a n d (o u r a c ti o n s ) de m o n s tr a te o u r c o n ti n u i n g progress i n pl aci ng sustai nabi l i ty at the very core of how we do busi ness ” Si mon Marti n, head of Group Sustai nabi l i ty and Corporate Responsi bi l i ty, HSBC

With a physical presence in 83 countries, it’s certainly no small t a s k f o r H S B C t o e m b e d s u s t a i n a b l e b u s i n e s s p r a c t i c e s i n t o i t s operations So, in June 2007, HSBC committed to investing $90 million in a Global Environmental Efficiency Program designed to reduce the firm’s impact on the environment.

“Sustainability is at the heart of HSBC’s global strategy, and our aim is to be one of the world’s leading brands in corporate sustainability,” says Francis Sullivan, advisor on the environment, HSBC Holdings Plc

Just one look at the firm’s London-based global headquarters confirms its commitment In May 2008, HSBC announced that it had completed installation of 422 solar panels on the roof of its corporate office building, which, according to the firm, will generate enough electricity to power 20 homes a year.

“Not only do the panels increase the energy efficiency of our building, but they also symbolize our commitment to the environment and send a strong message to our corporate real estate teams across the world that HSBC supports and promotes the use of renewable technology,” explains Sullivan.

HSBC also can be credited with building the first structure in Latin America that is Gold certified by the Leadership in Energy and Environmental Design (LEED) organization The building serves as

HSBC’s Mexico headquarters and showcases the latest energy- and water-efficiency measures. For example, the building utilizes partit i o n s a n d c l e a r w a l l s , a n d m a k e s m a x i m u m u s e o f d a y l i g h t t o reduce the need for artificial lighting. The building also features the largest green roof in Latin America, which serves to enhance biod i v e r s i t y a n d , i n c o n j u n c t i o n w i t h h i g h l y r e f l e c t i v e s u r f a c e s , reduces potential heat island effects Further, the building utilizes a graywater recycling system, which includes a treatment plant and storm-water tank to eliminate the need for potable water for irrigation HSBC believes that the cost-effectiveness of such projects will provide the firm with a short-term return on investment

HSBC’s environmental efforts don’t stop there Employee remuneration and reward is also based on the achievement of green objectives “Sustainability targets are included in the annual objectives set for senior managers and so is cascaded down the organization,” says Sullivan

Hewlett-Packard “HP has a responsi bi l i ty that starts wi th the desi gn of a product and goes ri ght through to i ts di sposal , and we ta k e th a t r e s po n s i bi l i ty v er y s e r i o u s l y ” T h o k o M o k g os i - M w a ntembe, managi ng di rector, HP South Afri ca

Wi t h t e c h n o l o g y d e v e l o p i n g a t l i g h t n i n g s p e e d , n e w d e v i c e s quickly become obsolete, resulting in a growing pile of discarded equipment and parts. This pile of neglect is commonly referred to as electronic waste, or e-waste Since many components of e-waste are considered toxic and/or nonbiodegradable, the human impact of technology on the environment is substantial

Hewlett-Packard is tackling this issue head on In March 2008, the company unveiled a pilot project in South Africa that not only focuses on dismantling electronic waste in a safe and responsible way, but also succeeds in creating new jobs in disadvantaged communities by equipping people with the relevant training needed to break down discarded equipment

“We see this project as a way to help develop a sustainable infrastructure to safely deal with electronic waste based on local practices that will benefit local communities Once fully operational, this pilot project will process up to 150 tons of equipment per year a n d c r e a t e a r o u n d 2 0 j o b s , ” s a i d T h o k o M o k g o s i - M w a n t e m b e , managing director of HP South Africa in a press release

The main focus of the Cape Town-based e-waste facility is to m a x i m i z e t h e p o t e n t i a l f o r r e f u r b i s h m e n t , r e p a i r a n d r e u s e o f e q u i p m e n t , w i t h e n v i r o n m e n t a l l y r e s p o n s i b l e d i s m a n t l i n g a n d recycling only as a last resort.

“This equipment is being refurbished to be used by the community, and people are making everything from toys to art out of it,” s a y s G a r r y N e w s o n o f R e c o v e r- e A l l i a n c e , a n o rg a n i z a t i o n t h a t partnered with HP on the South Africa e-waste project. “We are looking to develop effective methods of dealing with waste that will allow this sector to flourish in a safe and sustainable manner ”

This isn’t HP’s only attack on e-waste The company has similar projects underway in Morocco and Kenya

These are only four of countless high-profile companies both public and private that are taking the initiative to go green. Is this merely a case of expendable income gone wild? No These successful businesses recognize the value of greening, not only to the environment, but also to their profitability

Green for Green

Is environmentalism worth it to you?

By Robert J Derocher

Re c y c l i n g c o n t a i n e r s i n t h e l u n c h r o o m , b r o w n p a p e r i n t h e c o p y m a c h i n e , c o m p a c t f l u o r e s c e n t bulbs overhead...It seems so easy for businesses of just about any size to go green But is it?

M e a s u r i n g “ t h e i m p a c t o f a c o m p a n y ’s operation on the environment the cost

a n d q u a n t i f y i n g t h e b e n e f i t o f a d o p t i n g more environmentally friendly processes g o i n g g r e e n i s d i f f i c u l t , ” s a y s K a r e n Schuele, CPA, dean of the Boler School of Business at John Carroll University, Ohio

“

T h e m e a s u r e m e n t d i f f i c u l t y s e e m s t o b e the biggest stumbling block ”

As Schuele and fellow finance and environment observers note, hardly a day goes by without a firm making a proclamation a b o u t i t s c o m m i t m e n t t o g o i n g g r e e n , whether that means using environmentally f r i e n d l y p r o d u c t s o r e l i m i n a t i n g e n v i r o nmentally unfriendly business practices

Yet the commitment to going green also r e q u i r e s a f i n a n c i a l i n v e s t m e n t t h a t , f o r many companies, is a tough pill to swallow For CPAs and financial services firms in particular, the cost of going green can be an internal and external dilemma. Often, that’s where the deliberation ends, which is a very big mistake

W h i l e o p e r a t i o n a l s a v i n g s f r o m g o i n g green can sometimes be elusive, the public relations and marketing opportunity might p r o v i d e e n o u g h o f a f i n a n c i a l b o o s t t o m a k e i t w o r t h w h i l e f o r a c c o u n t i n g f i r m s and their clients

Why Go Green?

W h e n v i e w e d g l o b a l l y, t h e t a s k o f g o i n g g r e e n m i g h t s e e m i m p o s s i b l e . A l e n g t h y r e p o r t is s u e d i n J u n e b y t h e I n t e r n a t io n a l Energy Agency estimates that it would take a worldwide investment of $45 trillion over the next 40-plus years to reduce CO2 emissions by 50 percent from current levels It would take only $17 trillion to return CO2 levels to 2005 levels by the year 2050.

“ A g l o b a l r e v o l u t i o n i s n e e d e d i n t h e ways that energy is supplied and used Far greater energy efficiency is a core require-

ment,” the report stated “A dramatic shift is needed in government policies, notably creating a higher level of long-term policy certainty over future demand for low carbon technologies, upon which industry’s decision-makers can rely ”

That’s not to say companies shouldn’t do their part, however The Canadian accounting firm of Bennett Gold LLP in Toronto, for example, says that taking steps toward sustainability can increase the profits of small and medium-sized firms by up to 65 percent over a five-year period

The seemingly simple steps of reducing water, paper and electricity consumption, c o m b i n e d w i t h r e c y c l i n g p r o g r a m s , c a n get companies well on their way to going green and saving green, says Hilary Kusel, e x e c u t i v e d i r e c t o r o f t h e G r e e n B u s i n e s s Alliance in Boca Raton, Fla. The alliance c a l l s t h e s e a n d o t h e r e n v i r o n m e n t a l l y f r i e n d l y s t e p s a n e f f o r t t o G r e e n i f y ™ t h e business environment

“A few of the most compelling reasons for a company to Greenify are to benefit the environment, gain a competitive advantage, boost company morale, set a positive example for employees and lower expenses by improving efficiency,” Kusel explains “CPAs should lead by example and Greenify their practices and be recognized for their efforts in order to differentiate themselves from their competition ”

Where CPAs Play In

Like any other attempt to change a business s t r a t e g y o r o u t l o o k , t h e C - s u i t e n e e d s t o stand firmly behind the message However, involvement at all levels is key, says Robert Pojasek, senior associate with First Environment, Inc., an environmental management c o n s u l t i n g f i r m w i t h o f f i c e s n a t i o n w i d e Pojasek has visited hundreds of worksites over the course of his career to help establish and improve environmental operations

“The employee has to be involved in the planning process You need to make everybody in charge,” says Pojasek, who lectures on business sustainability at Harvard University “They’re all (about) environmental,

health and safety in their jobs They’re the risk managers on the job You need to get them to think about their jobs from an environmental point of view.”

Pojasek says accountants are ideally situated to track the costs associated with going green, and advocates keeping “a second set o f b o o k s ” t o t r a c k a c t i v i t y - b a s e d c o s t s W h i l e h e a d m i t s t h a t accountants at some of the factories and businesses he’s visited have been reluctant to keep dual books, he believes that the practice can help to ferret out waste, and therefore save money while making the company greener.

“Yes, it’s a second set of books, but every project manager reconciles these books,” he says. “You can look at them and feel better about what you’re accomplishing environmentally, and be impressed at your cost savings There are a lot of intangibles ”

These intangibles are important, not only internally for employees, but externally for clients as well, says George Elvin, director o f t h e G r e e n Te c h n o l o g y F o r u m , a n e n v i r o n m e n t a l c o n s u l t i n g firm. Although there may be upfront costs involved, dividends will come down the road.

“Companies are finding that going green improves customer loyalty,” says Elvin “Green buildings typically cost less than 5 percent more than standard ones, but green improvements pay for t h e m s e l v e s q u i c k l y t h r o u g h e n e rg y c o s t s a v i n g s a n d i m p r o v e d worker health, thanks to improved indoor environmental quality

“Most initial costs of going green end up saving money in the long run, insulation and energy conservation being a good example, since they save on fuel costs,” he continues “Energy conservation is critical Reducing transportation of products and employees helps considerably But the biggest impact is actually through green building Insulation is the most economical way to reduce carbon emissions ”

Incentives for Going Green

While good public relations offers the impetus for voluntary green efforts, government programs also can be attractive. Some states provide tax incentives for business owners to operate in a more e n v i r o n m e n t a l l y c o n s c i o u s m a n n e r, K u s e l e x p l a i n s , w i t h m o r e states and the federal government also intending to add or increase these perks

“If you want to build a commercial building in Chicago, you have to meet certain green building standards,” says Elvin “But the city offers expedited permitting to green projects, which allows businesses to open their doors sooner.”

A c h a l l e n g e f o r r i s k - a v e r s e a c c o u n t a n t s i n p a r t i c u l a r, s a y s Pojasek, is convincing them that any additional upfront costs or changes in established practices will be beneficial eventually “ Yo u h a v e t o i d e n t i f y f o r t h e m t h e r i s k y o u ’ r e a v o i d i n g b y n o t going green,” he explains

The same holds true for accounting clients, he adds. “If a CPA has a customer who improves his or her operations by going green, then they’re going to have a bigger customer and more business.”

Ultimately, says Jim Key, CPA, a risk management consultant and former IBM Corp auditor, a company’s decision to go green can be an all-around sound business option for most any financial services firm both for themselves and their clients

“I believe it’s an opportunity for CPA and audit professionals to add value to the companies they serve,” he says. “They can identify processes that present opportunities for the enterprise, and provide consulting and assurance services to provide management with recommendations to more effectively meet corporate social responsibility (CSR) objectives It’s a competitive issue: If enterprises want to maintain their competitive advantage, they need to embrace CSR objectives that will satisfy various stakeholders ”

TheIllinoisCPASocietyisseekingnominationsforits prestigious2009PublicServiceAward,whichispresented eachyeartoaSocietymemberinrecognitionofhisorherlifetime ofpublicservicecontributionsandforpresentingapositiveimage ofCPAsandtheaccountingprofession.

Criteriatobeconsideredinclude:

>Impactonacommunity

>Uniqueefforts

>Leadershipandinitiative

>Highlevelofinvolvement

>Diversityofpublic servicework

>IllinoisCPASociety membership

2008

DanG.Loescher,CPA

CherylS.Wilson,CPA

2007

MichaelA.Cullen,CPA

2006

GregoryS.Dowell,CPA

2005

DavidA.Hirsch,CPA

2004

JohnF.May,CPA

2003

JeromeH.Lipman,CPA

2002

WalterF.Nolan,CPA

2001

HowardG.Kaplan,CPA

KennethR.Diel,CPA

2000

ErnestG.Potter,CPA

Office 2040

The workplace of the future wil l be anything but gray

By Christine Bockelman

Th e c i t y o f C h i c a g o i s d e v i s i n g a g g r e s s i v e p l a n s t o r e d u c e u r b a n traffic congestion, currently boasts m i l e s o f g r e e n b i k e t r a i l s , a n d h a s s u pported the creation of more than 200 green rooftops, including one on City Hall. This, however, is only the beginning

The federal and state funded Chicago Metropolitan Agency for Planning (CMAP) is developing a long-range, wide-reaching plan for future land use, economic development, human services, transportation and more Called the GO TO 2040 plan, it addresses how Cook, DuPage, Kane, Kendall, Lake, McHenry and Will counties will ideally function in 32 years time. If CMAP’s

ambitious plans succeed (read more at www goto2040 com), every moment of your day, from picking up a gallon of (organic) milk to balancing a spreadsheet at the office, will be greener.

We a s k e d e n v i r o n m e n t a l e x p e r t s a n d others in the know what might be different about the 9 to 5 in the not-so-distant future. This is what they had to say

Technology

Technology is changing fast, and while it’s hard to predict what we’ll be using or not u s i n g ( r e m e m b e r V H S t a p e s ? ) 3 2 y e a r s f r o m n o w, t h e r e a r e s o m e d e f i n i t e g r e e n trends to watch for.

First, the process of manufacturing techn o l o g y w i l l c h a n g e L a p t o p s , P D A s , a n d the like will be made using more recycled content, says Yalmaz Siddiqui, director of e n v i r o n m e n t a l s t r a t e g y f o r O f f i c e D e p o t , the global multi-channel retailer based in South Florida, with more than 60 locations in Illinois. “The greening of businesses is a l r e a d y s t a r t i n g i n E u r o p e a n d w i l l c o ntinue to grow in the United States ” Companie s are paying attenti on to “remov ing lead and mercury, increasing the recycled content of the product, and designing for recyclability,” he explains

Remember how big desktop computers and cell phones were in the 1980s? Well, they, and other gadgets, are probably going to continue to shrink, says Siddiqui “This design for minimization dovetails with the trend of portability,” he adds The petite size also means there’s less product to dispose of and recycle a big environmental plus

What’s more, the amount of work-related travel will most likely take a nose dive by 2040, Siddiqui predicts, thanks to spectacular advances in videoconferencing Comp a n i e s a l r e a d y h a v e d e v e l o p e d s y s t e m s that eliminate grainy visuals and time-lag conversations.

“ Yo u c a n h o l d g l o b a l m e e t i n g s a n d i t almost feels like everyone is sitting at the same table talking with you,” he says. “This is a very exciting innovation ”

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Facilities

Chicago’s proliferating green roofs won’t be the only earth-friendly aspect of the 2040 office building Commercial properties actively will look for ways to waste less energy and bring workers closer to nature.

“In Chicago, we have to look into adaptive reuse of existing buildings, and part of that will be a bigger connection to nature,” says Frank Pettinati, a regional discipline leader at the Chicago office of Perkins+Will, a design firm with expertise in sustainability.

Office parks, in particular, are in for big changes How big? By the year 2040, they might not even exist “The idea of the office park where everyone drives from a house and then goes into an office where the windows don’t open those kinds of architectural designs will be rethought,” says Dr Mark Laska, Ph D , president of Great Eastern Ecology, an ecological consulting group “Offices will be clustered more, and public transportation to them from suburban areas will increase.”

E x p a n s i v e c o n c r e t e a n d h e a t - a b s o r b i n g p a r k i n g l o t s m a y b e another casualty “One of the strategies of the 2040 plan is conservation design,” says Talbot. “For example, we’d use plants that are native to the Chicago metropolitan region, like prairie grasses and other plants present before the area was developed ”

“I think in the future we’re going to look more at a site holistically, in addition to the building,” says Talbot. “Is the office near transit? Can we minimize parking? Are there parks outside? Can people walk to lunch? The whole commercial site will be better throughout, and be much more efficient.”

Utilities

In many cases, the air you breathe all day at work isn’t very healthy “A lot of buildings recirculate air without introducing enough conditioned fresh air,” says Scott Lenger, director of strategic relation-

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ships at Trane “Without adequate fresh air, carbon-dioxide levels increase throughout the building. Recirculated air, if not properly treated, doesn’t filter the germs, and allows them to recirculate Also, one of the big issues is that if a building’s air, fresh and recirculated, is not properly dehumidified, you could exacerbate mold and mildew growth ”

Moving forward to 2040, newly constructed buildings will bring in more fresh air and do a better job with filtration and dehumidi f i c a t i o n , w h i l e o l d e r b u i l d i n g s w i l l h a v e t h e i r H VA C s y s t e m s retrofitted. “There are going to be some big changes,” says Lenger. “The generation about to enter the workforce has much different e x p e c t a t i o n s o f t h e i r w o r k i n g e n v i r o n m e n t T h e y ’ v e g r o w n u p thinking sustainable.”

Commercial buildings will be more energy efficient, with systems being used only as much as needed “Rather than having a system that’s always on full speed if there’s one person in the building or 500, you’ll be able to measure what the needs are to bring the air to a high quality for the number of occupants,” says Legner

A n e x a m p l e o f t h i s t y p e o f f o r w a r d -t h i n k i n g , e n e rg y - e f f i c i e n t building is the Chicago Tribune’s pressroom, which was designed by Perkins+Will.

“There’s a three-story space down the middle of it We devised a strategy where we only heated and air-conditioned where people are going to be. That extra 10 to 15 feet of space above isn’t the same temperature as the floor, so less energy is used,” says Pettinati W h a

“There will be times of the year when buildings will take power off the grid, but will be able to replace that energy over time through solar, geothermal and wind power That’s something

s o u t f r o m n o w, ”

Legner projects

Lake Michigan might be in for a rest, too. In future office buildings, rainwater and the water that washes hands and cleans dishes in the cafeteria called graywater might be recycled through the system and used to flush toilets.

Work Environment

“I think there will be much more consideration of the lifestyle impacts of furniture not only toxin reduction, but also the recycled content and the entire lifecycle impact of the furniture,” Siddiqui predicts.

Bamboo flooring, non- or low-toxic paint, and other eco-friendly b u i l d i n g c h o i c e s a r e l i k e l y t o b e c o m e t h e n o r m , s a y s L a s k a “ S e a l a n t s c a n e m i t c h e m i c a l s , c a r p e t s c a n e m i t c h e m i c a l s , a n d that’s all added to the air and recirculated through many buildings,” says Talbot

Another improvement will be greater individual control over the environment “We tend to generalize how people work,” says Pettinati “Everyone is in a cube ” By 2040, he predicts flexible workstations where wall panels open and close depending on whether the space is being used by a lone worker or a collaborating group A flat screen or keyboard might be integrated into the furniture, and workers will be able to customize the level of light at their workspace and even the level of privacy

“They have this technology now in hotels and high-end propert i e s w h e r e y o u c a n f l i p a s w i t c h a n d g l a s s g o e s f r o m c l e a r t o opaque I think it will make its way into the office,” says Pettinati Although the workspace of the future will be more functional, there will be much less of it With people working from home more and more, there’s less need for everyone to have their own desk, Siddiqui states. If businesses can get by with only, say, two-thirds of their current space, they will be using less energy for heating, cooling and lighting.

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Tree Huggers Wanted

“Think Green” is the motto of the 21st century finance pro.

By Judy Giannetto

For all those young professionals out there who want to make a difference just as much as they want to make a buck, the wave of environmentalism embracing the nation is opportunity knocking. No longer solely the domain of government and nonprofits, green accounting is expanding into the private sector, as well.

E n v i r o n m e n t a l a c c o u n t a n t s b r i d g e t h e gap between the bottom line and environmental sustainability by factoring environm e n t a l c o s t s i n t o t h e f i n a n c i a l s t r a t e g i c plan and decision-making process In other w o r d s , t h e y t o u c h u p o n p r o fi t a b i l i t y, r i s k management, operations, sourcing, waste management, and more, to look for ways to save businesses money through measures that also protect the environment

Sounds appealing, doesn’t it? Remember, though, that environmentalism is a scorching hot topic If being financially accounta b l e w e r e n ’t s t r e s s f u l e n o u g h , t h i s n e w breed of professional has the weight of envir o n m e n t a l a c c o u n t a b i l i t y r e s t i n g o n i t s shoulders as well

Broadly speaking, positions fall into three areas: Environmental management accountants, environmental financial accountants and environmental national accountants.

According to John Rossheim, senior contributing writer for Monster com, the first collects and analyzes “information on materials flows and pollution controls for an internal audience of executives ” The second makes “analogous reports to external audiences, including investors and regulators ” The third looks at the big picture, “analyzing how national resources are used and how environmental impacts are managed across the nation ”

The majority of professionals entering this field first gain experience in general accounting, earning their CPA credentials before focusing in on green accounting. In preparation for their specialization, they keep up-todate on environmental legislation and learn all they can about environmental policies.

Traditionally, the majority of these positions are found in government agencies and

the nonprofit arena. And, obviously, a good place to start for anyone interested in this career path is the Environmental Protection Agency [www.epa.gov], which was ranked one of the top ten “Best Places to Work” in the federal government in 2007.

However, a growing number of consultancies and private businesses are integrati n g c o r p o r a t e r e s p o n s i b i l i t y i n t o t h e i r s t r a t e g i c s t a t e m e n t s , w h i c h m e a n s b u s inesses that have made green issues a drivi n g f o rc e i n t h e i r c o r p o r a t e m i s s i o n s a r e also good places to look

While a professional designation for environmental accounting isn’t yet offered, the game has changed with the introduction of “ G r e e n M B A s ” f r o m u n i v e r s i t i e s s u c h a s P r e s i d i o S c h o o l o f M a n a g e m e n t i n S a n F r a n c i s c o , S t a n f o r d G r a d u a t e S c h o o l o f Business, Dominican University, San Rafael, C a l i f . a n d B a i n b r i d g e G r a d u a t e I n s t i t u t e , Wash These new Green MBAs target three k e y a r e a s : p e o p l e , p r o f i t a b i l i t y a n d t h e health of the planet. As such, ethics, environmentalism and social values are incorporated into the curriculum

Rebecca Massoud, director of marketing for Presidio, stresses that, “All the traditional courses are offered economics, accounting, finance but all incorporate how to use business for positive social and environmental change while making money.”

“We attract students who are passionate about advancing environmental and social initiatives through business,” says John Stayton, co-founder and director of the Green MBA program at Dominican University.

With regulatory pressure mounting and p u b l i c o p i n i o n o n g r e e n i s s u e s s h i f t i n g m o r e f a v o r a b l y t o w a r d s c o m p a n i e s t h a t practice green business, graduates of these t y p e s o f p r o g r a m s c o u l d h a v e a d i s t i n c t advantage over their traditional peers in the very near future.

T h e e x i s t e n c e o f t h e s e p r o g r a m s i s a neon flashing light of sorts, advertising the fact that the accounting profession is taking a new direction and staying on course

The Illinois CPA Society has made it easier than ever to identify the up and comers in the accounting profession. Just visit the Illinois CPA Society’s Career Center and search student resumes to fill your next internship.

All across the state, Illinois CPA Society student members have uploaded their resumes for you to view online. These students represent the future of the profession and your guidance as a seasoned member of the profession can put them on the right track. These students are available for summer, fall or spring internships.

You can search by various criteria, including:

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CSR on the Radar

Your impact on society, the economy and the environment is now crystal clear

By Selena Chavis

Consider companies like Coca-Cola and UPS industry giants with farreaching global impact, huge supply chains and many stakeholders Alongside their public financial reporting initiatives, these companies also have opted to voluntarily and publicly divulge how their operations and strategies affect the social and environmental landscape

It comes in the way of corporate social responsibility reporting (CSR) an emerging trend touching small, mid-sized and large companies alike Specifically, CSR reporting means that organizations actively consider the interests of society by reporting the impact of their activities on customers, suppliers, employees, shareholders, communities and the environment

W h y t h e t r e n d ? M a n y i n d u s t r y e x p e r t s

b e l i e v e t h i s i s t h e r e s u l t o f a b e t t e r e d ucated public

“ W h a t ’s h a p p e n i n g i s t h a t p e o p l e a r e much more aware of the impact companies a r e h a v i n g o n t h e e n v i r o n m e n t a n d p e ople,” says Gregg Anderson, executive with Crowe Chizek and Company LLC He adds t h a t t h e p u b l i c a t l a rg e e x p e c t s a g r e a t e r l e v e l o f a c c o u n t a b i l i t y f r o m b u s i n e s s e s

“ E n d - c o n s u m e r s a r e l o o k i n g f o r m o r e responsibility,” he says.

K a t h r y n P a v l o v s k y, a p r i n c i p a l l e a d i n g Deloitte's Corporate Responsibility & Sust a i n a b i l i t y g r o u p , s u g g e s t s t h a t t h e r e a r e three overall trends impacting the growth o f t h e m o v e m e n t : 1 ) R e c o g n i t i o n o f t h e need to protect and conserve our natural r e s o u rc e s ; 2 ) P r o d u c e r r e s p o n s i b i l i t y, o r a c c o u n t a b i l i t y s p r e a d a c r o s s t h e s u p p l y chain; and 3) Growing emphasis on transparency and governance

“It’s truly the perfect storm businesses a r e r e c o g n i z i n g p r o c u r e m e n t a n d o p e r ational risk associated with natural resource scarcity, and regulation of materials harmful to human health and the environment

At the same time, the scientific community is coming to consensus regarding impacts

of climate change, and the government is becoming more responsive to demands for consistency, comparability and transparenc y o f e n v i r o n m e n t a l a n d s o c i a l p e r f o r ma n c e f o r b o t h r e g u l a t o r y a n d f i n a n c i a l reporting purposes (This is all) alongside the greater awareness of the impact by consumers and the general public,” she notes Flashback to June 2007, when the India R e s o u rc e C e n t e r o rg a n i z e d a p r o t e s t a t Coca-Cola’s museum in Atlanta In a country plagued by water shortages, Coca-Cola’s India-based bottling plants were condemned for leaving many communities without water suitable for drinking.

“When you are taking that much water out of an area that is faced with those kinds of shortages, it becomes clear that business p r a c t i c e s a r e a b o u t m u c h m o r e t h a n t h e bottom line,” says Jim Fuehrmeyer, associate professional specialist with the University of Notre Dame’s Mendoza College of B u s i n e s s H e p o i n t s o u t t h a t , s i n c e t h a t time, Coca-Cola has taken exhaustive measures for improvement, including a threey e a r, $ 2 0 m i l l i o n p a r t n e r s h i p w i t h t h e World Wildlife Fund (WWF) to “conserve a n d p r o t e c t f r e s h w a t e r r e s o u rc e s ” “ N o w their sustainability report talks about their c o m m i tm e n t t o b e i n g n e u t r a l p u tt i n g a s m u c h w a t e r i n a s t h e y t a k e o u t , ” s a y s Fuehrmeyer

Wo r k f o rc e g l o b a l i z a t i o n i s a l s o d r i v i n g the push for greater transparency in US businesses, largely due to the fact that corporate responsibility has a much broader footprint in overseas markets

“International markets have been at it a little longer,” notes Eric Hespenheide, partner in Deloitte's Corporate Responsibility & Sustainability group, adding that, while businesses in overseas markets have been providing corporate social responsibility reports, there’s a lot of room for improvement in respect to the standards and metrics being applied “Making sure it is rooted in the basic

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business strategy of the company is important,” he says

In other words, CSR needs t o i n c o r p o r a t e t h e s a m e s k i l l sets and reporting tactics that a c o m p a n y w o u l d u s e f o r financial reporting “Reporting comes across as hollow if it is n o t p a r t o f t h e b u s i n e s s c u lt u r e , ” H e s p e n h e i d e e x p l a i n s . “ I t ’s g e n e r a l l y e a s y t o t e l l w h i c h reports are created by communications departments as opposed to t h o s e t h a t h a v e m e a n i n g f u l m e t r i c s a n d m e a s u r e s t h a t d i r e c t l y relate to the company’s business ”

On the surface, the CSR movement might seem little more than a marketing strategy a way to put a company’s practices in a positive light. And while many industry professionals agree that public relations has been a driver for CSR in the past, most also agree that the tides are changing.

“Increasingly, as our natural resources become threatened and regulation evolves to protect and conserve those resources, there will be a convergence between voluntary reporting and regulatory reporting,” says Pavlovsky. “The movement we’ve seen during the last two years over all levels of an organization is the result of a growing recognition of the CSR imperative. The challenge for companies reporting now in an environment characterized by lack of consensus regarding relevant standards and metrics, is that they may suffer negative perception or penalties if they have voluntarily reported on a metric that is subsequently mandated by regulation. They have to address changes in public representations of performance associated with this metric, because the regulatory standard f o r m e a s u r e m e n t w a s m o r e c o n s e r v a t i v e t h a n w h a t t h e y h a d reported voluntarily ”

That’s where accounting professionals play a crucial role, says Anderson, adding that as part of this movement, stakeholders and consumers are starting to question reporting accuracy

“What we see is a standard emerging In any type of reporting process, how do you know it’s complete? How do you know it’s a c c u r a t e ? ” h e s a y s , p o i n t i n g t o t r e n d s t h a t b r i n g i n t h i r d - p a r t y accounting involvement “The skills in preparing financial statements are the same when preparing statements about corporate responsibility The financial professional has been trained in making sure reporting is complete and accurate ”

P a v l o v s k y a d d s t h a t , “ [ T ] h e f i n a n c i a l a n d a c c o u n t i n g p r o f e ssional has to be supported by a cross-functional team that understands the environmental technical considerations, legal requirements and operations, amongst others ”

Hespenheide agrees, noting that process-oriented people who understand the flow of information are “going to be in high demand ” Specifically, he’s speaking to accountants, auditors and CFOs.

T h e r o o t s o f C S R a r e p l a n t e d i n t h e “ Tr i p l e B o t t o m L i n e ” approach to reporting originally coined by John Elkington in the mid-1990s Described by Busi nessW eek as the “dean of the corporate responsibility movement for three decades,” Elkington suggested that the Triple Bottom Line is made up of social, economic and environmental impacts. It affects anyone or anything that is influenced, either directly or indirectly, by a firm’s actions

The terms “sustainability reporting” and “CSR” are often used interchangeably depending on the industry, but many suggest that CSR is just one component of the overall category of sustainability reporting The challenge for many companies is how to accurately

d e f i n e w h a t C S R c o v e r s a n d what business aspects should

b e c o n s i d e r e d f o r r e p o r t i n g

p u r p o s e s “ T h a t ’s o n e o f t h e first steps A company has to sit down and figure out who all its constituencies or stakeholders are,” Hespenheide explains, pointing to typical groups such as employees and unions, and atypical groups such as families and communities where a company does business “You think about all the different ways and all the different people you touch. There are many direct and indirect paths ”

The definition of those paths can have a considerable impact on the supply chain, Anderson explains, especially when a company such as Wal-Mart institutes practices for corporate responsibility. “It has a ripple effect throughout the supply chain,” he says To maintain a platform for corporate responsibility, a company has to do business with companies that engage in the same practices

A c k n o w l e d g i n g t h a t o n e o f t h e c h a l l e n g e s o f b e g i n n i n g C S R reporting is a lack of standards, many industry professionals refer to recommendations outlined by the Global Reporting Initiative (GRI) Formed in 1997, the GRI’s mission is to make sustainability reporting as routine and comparable as financial reporting. While not the only standard currently available, Hespenheide explains that, “It’s probably the one that is most widely referred to.” More than a thousand companies are currently using the GRI framework

Pavlovsky agrees, noting that “It’s a leading framework for identifying the components involved with the three-pronged effort for reporting across the economic, environmental and social dimensions.”

For example, GRI offers a number of standard indicators on labor practices, including areas such as total number of employees, rate of employee turnover, education availability, counseling and risk programs provided to employees, rates of injury, health and safety topics covered in formal agreements with trade unions, training p r o v i d e d a n d d i v e r s i t y i s s u e s O t h e r p r o t o c o l a r e a s c o v e r e d include economic, environment, human rights, product responsibility and society

Defining a company’s core reporting elements for CSR won’t b e t h e o n l y c h a l l e n g e A c c o u n t i n g p r o f e s s i o n a l s w i l l h a v e t o work in a framework that bears lit tle resemblance to black-andwhite financial reporting “Impacts may not be directly measurab l e . I t ’s m o r e o p e n - e n d e d , ” H e s p e n h e i d e e x p l a i n s . E x a m p l e s i n c l u d e p r o g r a m s t h a t a s s e s s a n d m a n a g e t h e i m p a c t o f h o w a c o m p a n y e n t e r s , o p e r a t e s a n d e x i t s a c o m m u n i t y ; h o w a c o mpany responds to corruption; public policy positions and participation in public policy development; and information related to anti-competitive behavior

Anderson cautions companies to consider their overall business strategy when defining aspects of their reporting, and to ensure r e p o r t i n g d o e s n ’t c o n f l i c t w i t h w h e r e t h e c o m p a n y i s h e a d e d . “Once you decide what you are going to report on, you set a precedent,” he says, adding that it will be difficult for a company to change its course once it’s already set into motion

In an ever-evolving global marketplace, companies that embrace CSR early on will become leaders in their industry “In one sense, there’s a certain amount of competitiveness that goes into this,” Fuehrmeyer suggests “To the extent that one company becomes a leader in their industry with this reporting, then there’s pressure for other companies to follow suit ”

“What’s happening is

t h at p eo pl e a re mu c h mo re a w a re o f t h e imp a c t companies are having on the environment and people End-consumers are looking for more responsibility.”

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Birth of a Bubble

While investors see green technology companies as the next panacea, financial experts cast their minds back to the dotcom bubble that burst.

By Bradley K Walton, CPA , CFP, CLU

Ev e r y o n e ’s t a l k i n g a b o u t g l o b a l warming. If we don’t drive hybrid c a r s a n d b o l t s o l a r p a n e l s t o t h e r o o f , w e ’ l l f a c e c e r t a i n e x t i n c t i o n , r i g h t ? Added to the atmosphere of impending crisis are skyrocketing oil prices No wonder we’re panicking.

I n f i n a n c i a l t e r m s , t h e s e f a c t o r s h a v e come together to create a boom in green i n v e s t i n g J u s t t r y s e a rc h i n g f o r “ g r e e n i n v e s t m e n t ” o n G o o g l e Yo u ’ l l f i n d m o r e than three-million entries. If you want more proof, consider the fact that venture capital investment in green technologies has more than doubled since 2006.

Green investing is a very specific form of socially responsible investing, where investors look at industry and company practices in the context of their social, economic and environmental impact They focus on issues such as corporate ethics, workplace practices, product safety, human rights, environmental sensitivity and community investment to identify securities that will simultaneously generate successful returns and make the world a better place

Historically, the returns on socially resp o n s i b l e i n v e s t m e n t p r a c t i c e s h a v e b e e n m i x e d B u t i n v e s t o r s a r e w i l l i n g t o p l a c e their values and societal convictions on an equal or greater footing than their desire for pure ROI

When speaking of green investing, the term “green technologies” is probably first to spring to mind Loosely grouped into the categories of water conservation and treatment, energy efficiency, sustainable agriculture, environment-friendly materials and manufacturing, emissions reduction and filtration, and alternative energy sources, it’s the latter alternative energy sources that’s attracting the most attention This sector includes wind, solar, hydro and geothermal power; biofuels; fuel cells; and, depending on the investor ’s point of view, clean coal and nuclear energy

The reasons for its popularity are varied, but gas prices loom large as a cause What’s m o r e , w e ’ r e l o o k i n g a t l e g i s l a t i o n i n t h e near future that will place limitations, and a de-facto tax, on the release of carbon emiss i o n s T h i s w i l l s i g n i f i c a n t l y i m p a c t t h e economy, employment levels and our standard of living

It doesn’t matter whether an individual investor personally believes global warming is an impending catastrophe; the truth is that our lawmakers and our next president believe it On a broader basis, most of society accepts that fossil fuels eventually will run out, pollution is a bad thing,

and we should take reasonable steps to protect the environment

In many ways, green investing is a lot like the technology investments of 30 years ago Like the dotcom sector, the green sector promises s i g n i f i c a n t b e n e f i t s t o m a n k i n d , i s h i g h l y unlikely to just go away, and eventually will c h a n g e t h e w a y w e l e a d o u r l i v e s G r e e n energy companies are in their infancy, and if we manage to identify the green equivalent of technology’s Microsoft or Intel, then we’ll be rich!

However, many, in fact most, of these startup companies will falter, leaving behind a few amazing success stories Remember that people who invested all their assets in technology p o r t f o l i o s d u r i n g t h e d o t c o m c r a z e 1 0 y e a r s ago have yet to recoup their investment following the bear market that unavoidably followed

I ’ m n o t s a y i n g t h a t g r e e n i n v e s t m e n t s a r e unwise Certainly, there will be a few winners among the many losers Simply, use moderation i n t h e s e t y p e s o f i n v e s t m e n t s . A s the sector matures and successful companies prove themselves, new “blue chips” that belong in welld i v e r s i f i e d p o r t f o l i o s w i l l d e f i n i t e l y m a k e themselves known

Remember that all bubbles eventually burst. “Going green” is now a media darling, and the focus of a public consciousness t h a t b e l i e v e s g r e e n t e c h n o l o g i e s t o b e t h e n e x t p a n a c e a This sector will undoubtedly attract huge sums of investment dollars, deliver incredible investm e n t r e t u r n s f o r a t i m e , a n d t h e n s u f f e r t h e devastating shakeout that is part of the growth cycle of any nascent industry If this forecast sounds a bit grim, please note that the list of now defunct US auto manufacturers numbers approximately 2,000

Given all this, tread carefully with clients. S o m e w i l l u n d e r s t a n d t h e n e e d f o r m o d e r ation; others will insist on outsized investment p o s i t i o n s T h e s e i n v e s t o r s w i l l h a v e m a n y choices to pick from The green wave of IPOs is only just beginning. There are already hund r e d s o f g r e e n m u t u a l f u n d s a n d d o z e n s o f ETFs, with more coming every week. All the aggressive green investor has to do is identify the handful of companies that will become the long-term winners.

Bradl ey K W al ton, CPA/CFP/CL U i s a sharehol der i n Si gnature Advi sers Group, L td , a graduate of the Uni versi ty of Il l i noi s and former El ij ah W atts Sel l s Award reci pi ent

upcoming events

September 17, 2008 - Chicago, Illinois

TECHNICAL WORKSHOP SERIES

Revenue Recognition in Today’s Business Climate

George Heyman, CPA - Professor, Oakton Community College

September 19, 2008 - Chicago, Illinois

Using Financial Statements to Drive Better Business Decisions

Marian Powers, PhD - Adjunct Associate Professor, Kellogg School of Management, Northwestern University

September 25, 2008 - Chicago, Illinois

Corporate Income Tax: Analyzing the Impact of FAS 109

Mark A. Sellner, CPA, JD, LLM (taxation) - Graduate Tax Professor in the Master of Business Taxation Degree Program at the University of Minnesota’s Carlson School of Management

September 26, 2008 - Rosemont, Illinois

Midwest Financial Reporting Symposium

October 17, 2008 - Oak Brook, Illinois

October 23, 2008 - Chicago, Illinois

October 24, 2008 - Northbrook, Illinois

BREAKFAST SERIES

International Financial Reporting Standards (IFRS) are Coming. Are You Ready?

Marian Powers, PhD - Adjunct Associate Professor, Kellogg School of Management, Northwestern University

October 22, 2008 - Chicago, Illinois

Implementing FIN 48 for Privately-Held Companies

Mark A. Sellner, CPA, JD, LLM (taxation) - Graduate Tax Professor in the Master of Business Taxation Degree Program at the University of Minnesota’s Carlson School of Management

October 29, 2008 - Chicago, Illinois

Strategic Cost Analysis: Tools for Lowering Your Company’s Cost John W. Hill, PhD, MBA, JD - Arthur M. Werner Chair in Business, Kelley School of Business, Indiana University

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Lincoln Green

Il linois lawmakers still have a long way to go on the road to environmental sustainability.

By Margaret Schroeder

Wi t h t h e t h i r d l a rg e s t c i t y i n t h e U n i t e d S t a t e s , s u r r o u n d e d b y ever-sprawling suburbs and heavily worked farmland, Illinois is a prime cand i d a t e f o r a n e n v i r o n m e n t a l m a k e o v e r. Whether it’s lessening carbon emissions on h i g h w a y s , f i g h t i n g p o l l u t i o n i n t h e G r e a t Lakes or keeping agricultural runoff out of the downstate waterways, Illinois citizens and businesses both have a stake in ensuring a green future.

The challenge for local governments is finding a balance between environmental and business sustainability. The 2007 Smoke Free Illinois Act is a good example of the fine line lawmakers walk They ultimately agreed to protect air quality in public places by banning smoking, but at the risk of putting some businesses in a tight spot when their customers chose to stay away.

While states like California have been at the forefront of environmental sustainability efforts, Illinois is actively setting the wheels i n m o t i o n . W h e t h e r i t ’s t h e d o o m a n d gloom of statistics on pollution and global warming, or the looming liability potential, e v e n s k e p t i c s a r e s i t t i n g u p a n d t a k i n g notice of the green movement

“We are at the very beginning,” observes P e t e r N i ch o l s o n , p r e s i d e nt a n d e xe c u t i v e director of the Foresight Design Initiative, a n o n p r o f i t C h i c a g o o rg a n i z a t i o n w o r k i n g t o w a r d c o l l a b o r a t i o n s t h a t w i l l i m p r o v e a n d e n c o u r a g e s u s t a i n a b l e p r a c t i c e s H e believes the environment is finally on the radar in a way that it has never been before, and will quickly create positive improvements “I think our perspective is changing, which is necessary for actions to change,” he says

Last fall Governor Rod Blagojevich’s Climate Change Advisory Group finished work on a detailed report suggesting a wide range of improvements The group was charged with evaluating potential options for the state

to cut down on greenhouse gas emissions like carbon-dioxide and methane, and included business, labor, energy and agriculture representatives, as well as scientists, economists and members of environmental organizations The wide-ranging report includes recommendations such as expanding mass transit, carbon-offset requirements for newly generated fossil fuels, and emissions performance standards for electricity generation or procurement

Furthermore, the Global Warming Resp o n s e A c t o f 2 0 0 8 ( S e n a t e B i l l 2 2 2 0 ) i n c l u d e s s e v e r a l m e a s u r e s t h a t w o u l d reduce the state’s contribution to air pollution But the bill is currently tied up in a l o n g e r- t e r m p r o c e s s t h a t m a y t a k e s o m e time Oak Park Democratic State Senator Don Harmon, who chairs the Senate Subcommittee on Global Warming and Energy Efficiency, says the group plans to meet in hearings and working groups over the coming months to decide on final legislation

T h e m o s t s i g n i f i c a n t p i e c e o f e n v i r o nmental law to come out of the 2007 session is the renewable energy portfolio standards, which were part of the Electric Deregulation Bill The measure includes graduated goals for reducing the amount of electricity u s e d t o m e e t c o n s u m e r n e e d s I t a l s o requires the use of alternative energies like wind and solar power. Last year, there were also two bills designed to cut down on merc u r y p o l l u t i o n b y p r o h i b i t i n g t h e s a l e o f devices that contain the substance.

For 2008 an d beyon d, the spectrum of potential legislation is broad, ranging from a i r q u a l i t y s t a n d a r d s t o r e q u i r i n g e n e rg yefficient lightbulbs; some laws could have a major impact, while others might prove to be less noticeable

Elmhurst Republican State Senator Dan Cronin, who has been called a “Friend of Industry” by the Illinois Chamber of Comm e rc e a n d h a s r e c e i v e d h i g h m a r k s f r o m

environmental groups, says that, “We can accomplish environmentally friendly policies with the support of the business community ” Business organizations and manufacturers need to be part of the discussion, he explains. “The best approach to implement meaningful change in business practices that have an impact on the environment is one of collaboration, negotiation and, perhaps, incentives In the end, it is about responsibility “

While regulation of power companies and car manu f a c t u r e r s t r a d i t i o n a l l y h a s c a p t u r e d h e a d l i n e s , o t h e r m e a s u r e s w o u l d h a v e a s i g n i f i c a n t i m p a c t a s w e l l both environmentally and economically Barry Matche t t , c o - l e g i s l a t i v e d i r e c t o r f o r t h e E n v i r o n m e n t a l L a w and Policy Center, says energy efficiency for buildings has been one of the main issues on the table for lawmakers this year The measure would increase energyefficiency requirements for new homes “We think this is a pretty good first step,” he says

T h e n a t i o n ’s c u r r e n t e c o n o m i c c o n d i t i o n c o u l d b e part of the reason why this hasn’t been a more productive year in terms of legislation Sen Harmon, who has been recognized by the Illinois Environmental Council for his environmental voting record, says that, “With risi n g p r i c e s o n e v e r y t h i n g f r o m e n e rg y t o c o n s t r u c t i o n m a t e r i a l s , t h e b u s i n e s s c o m m u n i t y i s a p p r e h e n s i v e about policies that may contribute to higher costs That’s why I think it is so important to engage stakeholders on all sides of the issue ”

On the other hand, this legislative year has not garnered any proposals that would evoke any major concern or opposition on the part of environmental groups “This session is relatively clean in terms of bills we’re looking to fight,” says Matchett

Looking to the future, it’s a certainty that the state legislature will continue to move forward in many areas of s u s t a i n a b i l i t y, i n c l u d i n g t h o s e t h a t a f f e c t b u s i n e s s e s And there are plenty of motivations for that, from cons t i t u e n t c o n c e r n s t o l o n g - t e r m h e a l t h c a r e c o s t c h a llenges. Perhaps one of the biggest motivators will be f e d e r a l r e g u l a t i o n N i c h o l s o n s a y s f e d e r a l , s t a t e a n d even local government policies as they relate to climate change will be a major driver in the decisions businesses make “This will be huge down the road Every major company that I know of is looking at it. If they’re not, they’re foolish ”

W hile he c ha ra c te riz e s Illinoi s g ov e rn me nt a s “ no t very progressive on these issues,” he says Chicago plays an important role in setting the standard for the rest of t h e s t a t e . E n v i r o n m e n t a l l e a d e r s h i p u n d e r C h i c a g o Mayor Richard Daley is part of that “As mayors go, we are very fortunate,” he says

Mayor Daley’s push for environmental sustainability has included planting 500,000 new trees, constructing 300 gardens and green roofs and, over the last 20 years, spearheading the implementation of sustainable urban practices, including a commitment to reducing greenh o u s e g a s e s , t h e d e v e l o p m e n t o f M i l l e n n i u m P a r k , which was built on a deck over railroad tracks, brown-

LifetimeAchievement 2009

Award Recommendations Now Being Accepted

The Illinois CPA Society is seeking recommendations for the 2009 Lifetime Achievement Award, which is presented each year to an individual(s) who has provided distinguished service to the profession in Illinois and/or nationally.

Candidates are selected based on a lifetime of service to the profession Factors to be considered include:

> Contribution to the profession

> Professional position attained

> Length of service

> Illinois professional involvement

Recent Award Honorees:

2008 Belverd E Needles, Jr

2007 Edwin Cohen

2006 Richard T Sullivan

2005 Vincent E Villinski

Richard E Ziegler

2004 Lawrence M Gill

Jerome A. Harris

Cheryl S Wilson

2003 Daniel W. Cadigan

Lester H McKeever Jr

2002 Robert E . Brooks Sr.

Margaret A Cartier

Letters of recommendation with information supporting the individual’s qualifications (resume, biography, etc.) can be sent to:

Eileen Robbs, Lifetime Achievement Award, Illinois CPA Society, 550 W. Jackson Blvd., Suite 900, Chicago, IL 60661 Or by email to: robbse@icpas.org

field (former industrial land) remediation, the Leadership in Energy and Environmental Design (LEED) Platinum-rated Center for Green Technology, a Green Business Strategy and Green Construction Permit Program, and the conversion of the downtown airport into Northerly Island Park, now a planned Olympic venue site and nature preserve

In terms of state lawmakers, support for environmental initiatives tends to be spread out geographically, coming from both republicans and democrats downstate, “Often from those who are interested in conservation and clean water for hunting and gaming purposes,” Matchett explains. There’s also bipartisan support in Chicago and the suburbs, but the focus is more likely to be on issues like clean air and the water quality of the Great Lakes

It’s impossible to deny that policies can have positive and negative effects on the business community. “We should reward positive actions through tax credits and other tools,

which may have prohibitively high initial costs but offer savings in the long term,” says Harmon. “However, the legislature is responsible for making difficult choices for the benefit of our whole state Incentives are not always enough; the legislature also has to be willing to establish standards and penalties in order to achieve its goals ”

Government aside, Nicholson points out that Illinois businesses have plenty of motivation to go green One of the biggest reasons is the threat of future liability He says businesses want to be responsible citizens because if they are not, they are increasingly likely to pay for it in the future. Other motivators include good public relations, lower energy costs, investor pressure for publicly traded companies and employee retention Many employees, in fact, now want to work for a company that shares their values Younger employees, in particular, seem to be expressing a strong desire for their employers to take these issues seriously.

As businesses move closer to environmental sustainability, accountants may find themselves in a new role Nicholson foresees a time when they will be in the business of certifying carbon emissions for trading purposes. Companies already do this trading on a voluntary basis through the Chicago Carbon Exchange, but, according to Nicholson, its use will become more widespread “I can see this in the future for the accounting field,” he says

Rockford | September 17, 2008

11:30AM - Networking and Lunch

12:00PM - 1:00PM - Program and Q&A

Best Western Clock Tower Resort 7801 E. State Street, Rockford, IL

Champaign | October 6, 2008

11:30AM - Networking and Lunch

12:00PM - 1:00PM - Program and Q&A

Hawthorn Suites 101 Trade Centre Drive, Champaign, IL

Springfield | October 7, 2008

8:00AM - Networking and Breakfast

8:30AM - 9:30AM - Program and Q&A

President Abraham Lincoln Hotel 701 E. Adams Street, Springfield, IL

Peoria | October 28, 2008

11:30AM - Networking and Lunch

12:00PM - 1:00PM - Program and Q&A

Hotel Pere Marquette 501 Main Street, Peoria, IL

Bloomington | October 29, 2008

8:00AM - Networking and Breakfast

8:30AM - 9:30AM - Program and Q&A

Chateau Hotel and Conference Center 1601 Jumer Drive, Bloomington, IL

Glenview | January 21, 2009

8:00AM - Networking and Breakfast

8:30AM - 9:30AM - Program and Q&A

Wyndham Glenview Suites 1400 Milwaukee Avenue, Glenview, IL

Oak Brook | January 26, 2009

8:00AM - Networking and Breakfast

8:30AM - 9:30AM - Program and Q&A

The Wyndham Drake 2301 York Road, Oak Brook, IL

Downtown Chicago | January 27, 2009

8:00AM - Networking and Breakfast

8:30AM - 9:30AM - Program and Q&A

The Crowne Plaza

733 West Madison, Chicago, IL

Please

Come for complimentary breakfast or lunch and hear the latest international, national and Illinois trends impacting your day-to-day practice:

>International Financial Reporting Standards (IFRS) They ARE coming and WILL impact you.

>Ethics Standards

Know the current rules. Avoid seeing your name in the press!

>Merging Generations in the Work Place Skills to develop tomorrow’s leaders.

Don’t miss this opportunity to share your thoughts and ideas with Elaine Weiss, ICPAS President & CEO, and Sheldon Holzman, Chair of the ICPAS Board of Directors.

Bring a Young Professional Colleague

Help develop the future of our profession. This is an excellent opportunity for young professionals to network with colleagues and hear first-hand the latest developments within the profession.

To REGISTER for this complimentary program in your area, call 800-993-0393.

Environmental Tax

Do you know your solar from your hydro?

By Harvey Coustan, CPA

There are numerous provisions in the Internal Revenue Code that encourage environmental protection, and some that penalize anti-green activities. As we all know, one of the non-revenue reas o n s f o r e n a c t i n g v a r i o u s p r o v i s i o n s i s t o encourage societal good I thought that disc u s s i n g s o m e o f t h e m o r e n o t a b l e p r o v isions would be an interesting tie in with our theme for this month

S e c t i o n 3 8 , “ G e n e r a l b u s i n e s s c r e d i t , ” allows a number of individually calculated amounts as credits against federal income tax The following are related to environmental issues:

• Section 40 Alcohol used as fuel

• Section 40A Biodiesel and renewable diesel used as fuel

• Section 45 Electricity produced from certain renewable resources, etc

• Section 45H Credit for production of low-sulfur diesel fuel

• Section 45J Credit for production from advanced nuclear power facilities

• Section 45K Credit for producing fuel from a nonconventional source

• Section 45L New energy-efficient home credit

• S e c t i o n 3 0 B ( g ) ( 1 ) N e w q u a l i f i e d fuel-cell motor vehicle credit

• Section 30C(d)(1) Alternative fuel vehicle refueling property credit

• Section 46(2) Energy credit (including §§48,48A, and 48B).

Section 48 allows a direct credit against income tax of an amount equal to a percentage (10 to 30 percent) of the basis of “energy property” placed in service during the year Energy property includes a number of environmentally related items, such as equipment that uses solar energy to generate electricity, to heat or cool a structure, or to provide solar process heat (heating a swimming pool doesn’t count) The definition includes a “plant” that converts a fuel i n t o e l e c t r i c i t y u s i n g e l e c t r o - c h e m i c a l means Other energy-saving equipment is included, but its description is beyond the

grasp of this accountant “qualified microturbine property” comes to mind.

One practical problem is that some environmental tax benefits, including those just described, were in need of extension as I was writing this column Many energy properties that would otherwise qualify would expire at the end of this year.

Another expiring provision, and one that is somewhat easier to understand, is the credit under Section 45L, which relates to certain contractors and “manufacturers” of qualified new energy-efficient homes.

While the credit can be $1,000 or $2,000 per dwelling unit, substantial savings in energy consumption must be certified. To qualify, a constructed (as opposed to manufactured) dwelling unit must be certified to:

(1) have a level of heating and cooling energy consumption that is at least 50 percent (30 percent for certain manufactured homes) below the annual heating and cooling energy consumption of a comparable dwelling unit.

(2) have “building envelope component improvements” that account for at least 1/5 of the 50 percent (1/3 of the 30 percent for manufactured homes)

Again, a working knowledge of non-tax terms in this case real-estate development is necessary to wade through this benefit

Credits for energy-efficient vehicles such as hybrids and those that use alternative fuels are available under Section 30B Furthermore, the Internal Revenue Code provides incentives for conserving energy at the energy-generation level, for those who house us, and for those of us who choose to drive energy-efficient vehicles It also provides incentives in a number of other areas, including for those who provide refueling facilities

Clearly, Congress wants to encourage us to go green However, a major issue which I alluded to earlier is the technical jargon involved in many of the provisions. Without some basic understanding of the qualification requirements, a tax practitioner likely would be reluctant to recommend claiming

the benefits to his or her clients A plain language summary of the benefits and ways to qualify them is needed, and Congress should act (if it hasn’t already) to extend these benefits to assist in an overall strategy of improving the environment and reducing our dependency on fossil fuels.

A recent development is also worth noting On May 21, the House passed H R 6049, the Renewable Energy and Job Creation Act of 2008 The bill, at the time of this writing, was in the Senate where passage was far from assured H R 6049 would provide extensions for renewable energy production credits. It would also extend and modify the solar and fuel-cell investment tax credit In addition, H R 6049 would extend the credit for residential solar property for six years through the end of 2014 Many of the extended provisions would be allowed to offset Alternative Minimum Tax The bill authorizes $2 billion of new Clean Renewable Energy Bonds to finance facilities that generate electricity from wind, geothermal, hydropower, trash combustion, and other non-traditional sources. It contains carbon-mitigation provisions and numerous other provisions that demonstrate Congressional concern in this area For example, the bill directs the Treasury to request that the National Academy of Sciences undertake a comprehensive review of the tax code to identify the types of specific tax provisions that have the largest effects on carbon and other greenhouse gas emissions, and to estimate the magnitude of those effects

Let us hope that this or similar legislation is passed, and that the IRS takes steps to publicize the availability of green tax incentives in a way that is both user-friendly and encourages us to maximize their use

Harvey Coustan i s an Ernst & Y oung reti red partner He i s presentl y consul ti ng on substanti ve techni cal and professi onal standards i ssues and has been an ex pert wi tness i n a number of cases

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By Sheryl Nance -Nash

Some say the greening of corporate America is a revolutiona r y c h a n g e o n e t h a t h a s a l r e a d y i m p a c t e d t h e l i v e s o f CFOs, and likely will continue to do so This greening is, in f a c t , p a r t o f a b r o a d e r m o v e m e n t , k n o w n a s “ c o r p o r a t e social responsibility” or CSR, which hinges on demonstrating concern for the environment, employees and local communities. As companies focus on sustainability, the competitive landscape changes A company lacking a viable social responsibility message may have a harder time building its c u s t o m e r b a s e , w h i l e a c o m p a n y w i t h a n a t t r a c t i v e C S R message may find it easier to attract and retain employees

CFOs across the nation are waking up to the legitimate call for corporate greening.

Think of it in terms of the birth of personal computers and the death of mainframes, says Gary Patterson, president of FiscalDoctor, a financial consulting firm “A new industry was born, and a new way of doing business, communicating and relating to the customer emerged. Seen this way, the biggest challenge CFOs face is the limits of their own mindsets and attitudes They can resist the burgeoning clean energy industry and go the way of dinosaurs, or they can embrace the new industry and fly like eagles. Think of how the former Fortune 500 Digital Equipment Corporation (DEC) was displaced by then-upstart Dell Computers, which ironically became a Fortune 500 behemoth,” he says. “CFOs need to roll up their sleeves and get involved in strategy planning, technology innovations, and evaluating and preparing to make technology decisions of the same magnitude as the entertainment industries faced in the Beta versus VHS issues.”

The Future is Now...Sixty percent of global executives recently surveyed by McKi nsey Quarterl y said they regard climate change as strategically important; the majority consider it particularly important to product development, investment planning and brand management. And yet, the survey shows that fewer companies are acting on these opinions More than one-third of executives, in fact, said their companies seldom or never consider climate change when developing overall strategy

O n a m o r e p o s i t i v e n o t e , e x e c u t i v e s e x p r e s s e d o p t i m i s m about the business prospects of addressing climate change, with 61 percent expecting issues associated with it to boost profits if managed well More than 80 percent also expect some form of climate change regulation in their companies’ home country within five years

A n o t h e r r e c e n t s t u d y o f C F O s s p e c i f i c a l l y c o n d u c t e d b y Jones Lang LaSalle, outlined key challenges to nationwide greening These challenges include a lack of a standardized decisionm a k i n g f r a m e w o r k , r e g u l a t o r y c o m p l i a n c e , i m p r o v i n g e n e rg y e f f i c i e n c y, r e d u c i n g g r e e n h o u s e g a s e m i s s i o n s , m e a s u r i n g t h e effects of sustainability on shareholder value, and the financial impact of greening the corporation

True enough, the green movement has tremendous impact on the CFO “CFOs now have to evaluate risk from a new dimension not previously assessed by them They have to consider the longt e r m e n v i r o n m e n t a l i m p a c t o f t h e i r o p e r a t i o n s , p r o d u c t s a n d financial performance as a company, particularly if they are publicly traded,” explains Mark Coleman, senior program manager at the Golisano Institute for Sustainability at the Rochester Institute of Technology in Rochester, New York.

“Many financial leaders now believe that future financial risk is directly related to a company’s performance on environmental, social and governance (ESG) indicators,” he continues “The more CFOs understand how their firm gets financially rated by rating agencies like INNOVEST or socially conscious mutual funds, the better suited they will be to understanding what the firm needs to account for with regards to financial data and reporting, as well as establishing internal controls and metrics to assess the firm’s financial performance as it pertains to environmental, energy, social and governance factors The key for the CFO is greater awareness of how the firm’s overall ESG data is used by external stakeholde r s t o i n f o r m t h e i n v e s

i o n a l investors that literally make or break many corporate futures.”

According to the Social Investment Forum, shareholder resolutions on social and environmental issues increased more than 16 percent from 299 proposals in 2003 to 348 in 2005

e n o u g h c l e a n e n e rg y e x p e r t i s e t o u n d e r s t a n d h o w r e n e w a b l e energy mandates and initiatives will affect their operations, business models, industries and competitive positions Otherwise, how can they make intelligent assumptions and obtain critical operating information for budgets and the wide range of analytics needed in their industries? There’s no doubt they will be affected, if not traumatized, by changes in technology, resource availability, logistics stress, green customer attitudes, and additional regulatory roadblocks,” he explains.

Many believe that climate-related legal risks for companies and their directors are growing, and recent legal history seems to support the claim In Connecti cut vs Ameri can El ectri c Power, for example, eight states and New York City filed a lawsuit against five of the nation’s largest power companies demanding that they cut CO2 emissions. In Cal i forni a vs General Motors, the State of California filed suit against six motor vehicle manufacturers on a p u b

s u i t s w i l l b e d i smissed, their emergence is cause for concern among corporate law firms, as well as major insurers.

Some organizations have reached a tipping point in the green movement, from complacent recognition to decisive action. The i s s u e s o f o i l , C O 2 e m i s s i o n s a n d g l o b a l w a r m i n g i m p a c t e v e r y organization’s social and environmental performance and financial health “This has led to the term ‘Triple Bottom-Line reporting,’ meaning profit, people and planet,” says Gary Cokins, global product marketing manager for performance market solutions at SAS, a $2 billion global data management, business intelligence and analytical software firm

Since the CFO is a key player in creating shareholder value for the organization, the greening of corporate America means that f i n a n c e c h i e f s i n c r e a s i n g l y a r e b e i n g c h a rg e d w i t h c o n n e c t in g their value creation skills with the “sustainability” of the company, i t s i m m e d i a t e p r o f i t s , a n d t h e s h o r t - a n d l o n g - t e r m i m p a c t o n o p e r a t i n g c o s t s a n d t h e e n v i r o n m e n t, s a y s L i s a Tr o m b a , a v i c e president at executive search firm Battalia Winston in New York Specifically, the CFO is tasked with managing the company’s risk in implementing green initiatives, and is responsible for tracking a n d m e a s u r i n g i n i t i a t i v e s i n o r d e r t o p r o v i d e i n s i g h t i n t o h o w those initiatives are affecting the company’s financial performance and shareholder value.

Patterson agrees that the green movement adds an enormous r e s p o n s i b i l i t y t o t h e CF

w i l l n e e d t o o b ta i n

What’s more, the CFO is destined to play a part in providing guidance on sound environmental programs and practices, and by helping to identify revenue-generating opportunities Remember that green initiatives often have financial incentives associated with them, such as tax credits or deductions The challenge lies in aligning green strategies with the financial structure of the company, and in being realistic about short- and long-term rewards “CFOs will

need to stay on top of ever-changing green regulations, incentives and tax implications to do this successfully,” says Tromba

S i m p l y p u t , t h e C F O i s b e c o m i n g t h e s t r a t e g i c a n d f i n a n c i a l green partner to the business This fact heightens the critical need for enhanced “engagement skills,” says Tromba “Engaging in the business and with the business partners will be critical to ensuring the awareness required to guide the organization toward financially responsible green practices. The CFO will need to be environmentally aware and savvy in order to be the ‘voice of reason’ for the organization The more a CFO embraces the green movement, the greater the value he or she can create for the organization. Moreover, CFOs who increase their green skills increase their professional value, as well.”

“CFOs will either make things happen or get in the way,” adds Jean Houston Shore, a CPA with the Business Resource Group consulting firm. “Building respectful relationships with other company leaders becomes more important than ever There is no room for silos or turf building if the goal is to becom e sustainable while remaining competitive ”

It’s a no-brainer for CFOs to understand and build the busine ss case for energy efficiency on the cost side of the equation, says Leigh Anne Palmer, CFO for Trane’s commercial business in the Americas. The Piscataway, NJ company provides heating, ventil a t i o n a n d a i r- c o n d i t i o n i n g s y s t e m s a n d s e r v i c e s t o r e s i d e n t i a l and business customers

“ W h e n a n a l y z i n g w h e t h e r t o m a k e a c a p i t a l i n v e s t m e n t t o improve energy efficiency, CFOs need to evaluate the total cost of o w n i n g a s y s t e m , p a r t i c u l a r l y w h e n i t ’s a b u i l d i n g i n v e s t m e n t . E n e rg y - e f f i c i e n t b u i l d i n g s y s t e m s m a y h a v e a 1 t o 3 p e rc e n t greater upfront cost, but could have as little as a two-year payback. The key is seeing the whole picture,” says Palmer.

The green movement shines a light on the importance of the CFO’s ability to recognize and manage resource constraints of all kinds “Whether it’s reducing energy use, making environmentally responsible product packaging choices, or purchasing only from local vendors, CFOs control the purse strings that affect resource consumption In general, the CFO will lead the push to reduce waste, save money, reduce energy use, lower carbon emissions, conserve forests, reduce water use and air pollution, and more It’s a tall order,” says Houston Shore

Peter Csathy, CEO of SightSpeed, Inc., a provider of video calling and multi-party video conferencing via the Internet, thinks it’s well within his CFO’s scope of responsibility to suggest technology like video communication as a substitute for carbon-emitting travel, whether for meetings that are across town, across the country or a r o u n d t h e w o r l d . T h e c o m p a n y ’s e n g i n e e r s a r e e n c o u r a g e d t o travel to the office no more than twice a week Other employees are assigned to work from home and use the company’s technology to collaborate with team members via video Embedded in the email signature of each employee is a “Call Me on SightSpeed” button that sets up a video call with a single mouse click.

Csathy, who runs the company from San Diego via web-based conferencing, says, “CFOs can cut down on employee travel, fuel consumption and carbon emissions by considering changes in corporate culture, like reducing the number of days spent in the office ”

T h e n t o o , m a n y g r e e n i n i t i a t i v e s a r e i n t h e e a r l y s t a g e s . I t ’s unclear whether they will evolve into products that function better or whether they’ll simply get more expensive, says Mark Laska, CEO of Great Eastern Ecology, an energy consulting firm in New York City For instance, solar power is becoming increasingly efficient and continues to be a better product for alternative energy

good solution to traditional petroleum-based products, have both financial and environmental hidden costs, making this product less attractive than originally assumed.

While some CFOs are embracing the green movement, others are sticking their heads in the sand, says Patterson

Christopher Park, principal with Deloitte Consulting in Detroit, explains that, “The jury is still out on the real near-term business b e n e f i t o f g o i n g g r e e n ; s o m e c o m p a n i e s a r e t a k i n g a l e a d i n g approach and having some positive results, while others are taking a more cautious wait-and-see approach ”

One of the biggest mistakes a CFO can make is to think that corporate greening doesn’t apply to them because they don’t make chemicals or manufacture durable goods “The trend applies t o everyone,” says Houston Shore.

When Chicago-based commercial real estate services company Jones Lang LaSalle surveyed finance executives about their companies’ priorities for sustainability, reporting to investors a task that clearly falls to the CFO was among the lowest priorities on the list, says Lauralee Martin, Jones Lang LaSalle’s chief operating and financial officer. “Communicating to customers ranked as a high priority It’s interesting that so many of us know that sustainable practices will enhance customer loyalty, which will increase revenue, but we don’t believe investors know it,” she says

SAS’ Cokins advises finance executives to, “Start thinking of your organization’s social and environmental responsiveness as an asset and opportunity, not as a liability and extra cost When reasoned actions are taken they can favorably result in improved processes, innovations, improved reputations and increased financial profitability Investing in sustainable practices can deliver a positive financial return for shareholders ”

Getting up to speed is not an option it’s an imperative. “Environmental disclosure is required under the Sarbanes-Oxley Act of

0 2 ( S O X ) E n v i r o n m e n t a l l i a b i l i t i e s a n d r i s k s a r e v a l u a t e d , reported and financially disclosed under new reporting requirements In some cases, says Coleman, firms that have failed to take action on environmental disclosure under SOX have experienced a learning curve, which in turn has resulted in financial penalty and, in some cases, legal action against individual executives

Coleman offers this advice: “Understand what your peer companies and sectors are doing on environmental disclosure and reporting Seek to understand all corporate green initiatives within your firm and how best to disclose the benefit of those initiatives. Work with industry associations to better develop your internal metrics and control ”

Look globally too, says Brian Smith, a senior tax manager with Ernst & Young’s State and Local Tax Practice in Chicago “Capitalize on Europe and other countries’ aggressive lead, and establish targets for renewable power, energy efficiency and carbon reduction in your domestic and overseas operations As the US government increases its focus on green policies and sustainability reporting, CFOs should be prepared to leverage upcoming changes and maximize efficiencies,” he explains

Immerse yourself in the issues to gain the knowledge you need to catapult your company into the 21st century, says Patterson, adding that, “As typically happens in periods of seismic change, some companies will make lemonade out of lemons. Others will g e t

painful consequences Will your company produce lemonade or be a lemon?”

SAVED

H i g h - i m p a c t , l o w - c o s t

w a y s t o g r e e n y o u r o f f i c e …

a n d p a d y o u r b u d g e t .

By Judy Giannetto

W h y g o g r e e n ? W h y s p e n d y o u r b u s i n e s s ’s h a r d - e a r n e d cash to give a tree a hug, spruce up your air supply and patch up the ozone layer?

If you see the long-term survival of the planet as something more than a “fluffy kitten” type of issue, then the long-term survival of the planet is reason enough If, on the other hand, you’re all business, no fluffy kittens, then you’ll likely need a bit more persuading Let’s start with this

Two key human aspects of the business marketplace determ i n e s u c c e s s o r f a i l u r e : Yo u r e m p l o y e e s a n d y o u r c u stomers Showing that you care about more than the bottom line sends an influential message of corporate altruism to your staff a staff that is increasingly difficult to attract and retain It inspires loyalty to the company, and allows employees to stand behind a corporate mission they can believe in and be proud of.

In fact, a June 2008 UC Santa Barbara survey of 759 MBA grads at 11 top business schools revealed that these up-and-coming professionals would consider taking a significant salary cut in order to work for a socially responsible employer

On the customer side, corporate social responsibility is becoming less of a choice and more of a necessity Seeing the devastating effects of climate change, customers are demanding that businesses play a key role in social responsibility and environmental sustainability If you want to keep your customers, and win new ones, then you need to show them that you care about the planet Take a cue from the biggies Citibank, Wells Fargo, Adobe Systems Incorporated, Toyota need we say more?

A n d t h e r e ’s a n o t h e r b e n e f i t t o g o i n g g r e e n d i f f e r e n t i a t i o n

G r e e n c o m p a n i e s s t a n d o u t i n t h e m a r k e t p l a c e . T h e y h a v e a n edge over the competition They are newsworthy They are selffulfilling marketing machines

A n d , b e c a u s e b e i n g e c o - f r i e n d ly m e a n s r e d u c i n g w a s t e a n d using less or alternative energy, green businesses may benefit from improved efficiencies and lower operating costs in the long run

In pinpointing the most cost-effective strategies for going green, we not only looked at US practices, but also turned an eye across the pond, where the green movement is already well underway And so, coupling what’s going on overseas with what’s going on at home, we give you our list of eight high-impact, low-cost green initiatives

• Invest in water-efficient fixtures and appliances such as automatic faucet valves and low-flow toilets. Although this equipment may cost more at the outset, it usually pays for itself relatively quickly

W h y s h o u l d y o u c a r e h o w m u c h w a t e r y o u r c o m p a n y u s e s ?

Because, says Envirowise [www envirowise gov uk], “[A]s a utility charge, any savings you make will be added directly to the bottom line Although water is relatively cheap compared to energy, it can still equal as much as 1 percent of a business’s turnover, part i c u l a r l y w h e n y o u c o n s i d e r t h e h i d d e n c o s t s a s s o c i a t e d w i t h water usage, such as heating, pumping and treatment ”

Envirowise, which provides free government-supported environmental consultation, advice and documentation for UK b usinesses, goes on to say that, “By implementing no-cost and lowcost measures, it is possible for a site that has not considere d its water use before to make savings of up to 30 percent of its water and effluent bills, and this could increase to 50 percent by investing in capital ”

The organization also estimates that, “A tap dripping two drops a second could waste nearly 10,000 liters of water in a year ”

To help to conserve water and save on your bill,

• Ensure pipes are well insulated and regularly check equipment for possible leaks

• Investigate opportunities for reusing process water

• Consider alternative water sources such as rainwater or graywater (residential waste water from domestic processes such as dishwashing, laundry and bathing)

While installing solar panels and wind turbines takes a lot of cash and aggravation, there are some pretty basic ways to conserve the energy you’re currently using. Tips include:

• If you’re not in the room, switch off the lights Or, even better, install motion-detector lighting Or, better yet, rearrange the office to maximize on all natural light sources

• If natural light isn’t an option, then wave goodbye to your i n c a n d e s c e n t l i g h t b u l b s a n d s a y h e l l o t o c o m p a c t f l u o r e scents (CFLs) CFLs are touted as saving more than $30 in electricity costs and 2,000 times their own weight in greenhouse gases Another alternative is LED lighting, which has a long lifespan, while drawing very little electricity

• Don’t heat unused spaces such as storerooms, corridors and g a r a g e s . A l t e r n a t i v e l y, s c h e d u l e p l a n n e d o u t a g e s . W h e n Adobe reduced the operating hours of its garage’s exhaust fans at a cost of $250, for example, it realized an annual savings of $98,000.

• Turn down or turn off the heating/air-conditioning when the building is not in use

• R e g u l a r l y i n s p e c t y o u r h e a t i n g a n d c o o l i n g e q u i p m e n t Assess your building’s insulation and, if necessary, plug the drafts Lack of maintenance can add to your bill significantly

G GRREEN Y OUR T ECHNOOLOGIES S

Closely related to the issue of energy conservation is that of green technologies And, in case you think, “We’re just fine with what we’ve got,” the following facts may prove you wrong

“HP has seen a 120-percent increase worldwide in the number of inquiries connected to the environment since the last half of 2006 In 2005, the company saw $6 billion in requests for proposals that had some environmental element,” explained a recent ABC News article, “Tech Firms Tap Into the ‘Green’ Movement.” In the meantime, “IBM launched its ‘Project Green’ program in early May, committing $1 billion per year to increase the level of energy efficiency in the information technologies markets, and since then has been bombarded by customer requests.”

W h e t h e r y o u ’ r e t a l k i n g p a p e r l e s s t e c h n o l o g i e s o r e n e rg yefficient servers, the movement is rapidly gaining speed

Starting at the 101 level of greening technology, make a commitment to purchasing energy-saving equipment that carries the Energy Star seal Energy Star laptops, for example, promise to use 90-percent less energy than their desktop counterparts Also look into multifunction devices (MFDs), which combine copying, printing and faxing into one machine

“The idea is, if you unplug several old, power-draining copiers, printers and faxes, and trade them in for fewer MFDs, you reap cash and carbon savings,” says Ted Samson, a senior analyst for the InfoWorld Test Center and author of the InfoWorld Sustainable IT weblog [weblog infoworld com/sustainableit]

Which brings up a good point: As long as equipment is plugged in, it’s using up energy. At the very least, switch off computers, printers, fax machines, coffeemakers, etc when not in use Simply asking employees to switch off their monitors at the end of the work day can make a big difference

As Samson explains, “For every PC and monitor left on at your

on power bills ” He suggests investing in PC power management solutions from companies like 1E, BigFix, Kace, or Verdiem.

power down when they’re not in use and get woken up for patching, backup and so forth ”

While it costs more to buy paper than it does to dispose of it, says Envirowise Director Adrian Cole, paperless technologies can seem a bit intimidating to some companies, whether because of difficulties in managing technological change within the organization or in finding room in the budget for the initial expense.

However, there are non-technological strategies you can adopt to reduce paper waste in your office They include specifying a monthly per-employee or department paper quota, launching an internal “think before you print” campaign (which is especially effective in reducing unnecessary email printing), and implementing a double-sided print policy, in which employees print on both sides of a sheet of paper before throwing it into the recycling bin.

“[T]he average employee wastes $85 worth of printer paper and ink each year through unnecessary printing,” says Samson

To prove the point, Goldman Sachs estimates that it saved 14 9 million sheets or 178,800 pounds of paper last year through doublesided printing and enforcement of an electronic statement policy.

o reduce printing waste. Tools such as those offered by Equitrac “let admin set up policies that prevent users from, say, printing web pages in costlier color ink, or defaults certain types of documents to two-sided printing instead of one,” Samson explains

If going paperless is within the scope of reason for your company, then note that these technologies are now more affordable and easier to use In the accounting arena, for example, CPAs use software to scan, manage and store tax returns, financial reports and correspondence, which means less drain on the raw materials used to manufacture paper, cost-cutting in areas such as office supplies and offsite document storage, and instant access to information

As a statement of just how popular paperless environments are b e c o m i n g , o n J u l y 1 3 o f t h i s y e a r, h e a l t h i n s u r a n c e g i a n t B l u e Cross and Blue Shield of Illinois added to its “Blue goes Green” program by committing to reduce the number of Explanation of Benefits (EOBs) it prints, and bundling most EOBs for weekly mailing Its mission, says Blue Cross, is to save thousands of trees and gallons of water every month by reducing paper mailings

What’s more, consider using either post-consumer or FSC paper products. Post-consumer recycled products tell you that the recycled content was used at least once before being recycled Forest Stewardship Council (FSC) products indicate that any virgin wood used in the paper comes from sustainable, well-managed forests

More on sustainable supplies

Whether for the break room, the janitorial storeroom or the main office, make it your policy to buy recycled, compostable, reusable or biodegradable products.

F o r i n s t a n c e , t r a d e i n p l a s t i c p l a t e s , c u p s a n d c u t l e r y f o r t h e reusable china and stainless steel variety Or, buy biodegradable supplies such as cutlery primarily made from potatoes or wheat, which are fully biodegradable and compostable, or from polylactic acid (PLA), which is de rived from agricultural crops su ch as corn Similarly, Chinet plates are made from post-industrial waste from poly-coated milk carton production. Bagasse plates are made f r o m s u g a r c a n e f i b e r t h a t i s a b y p r o d u c t o f t h e s u g a r- r e f i n i n g process Both are biodegradable and compostable

Furthermore, consider fitting your break room with a water-filtering system that can be hooked up to the existing water line. Encourage employees to refill from this source rather than buying plastic bottle after plastic bottle of water

Moving onto janitorial supplies, couple recycled paper towels with non-toxic, biodegradable and/or agriculturally based products such as Orange Plus, which is an all-natural plant-based sanitizer and cleaner, and Window Cleaner, which utilizes vinegar and coconut-based soap. Both are offered by Earth-Friendly Products

[www ecos com]

Taking the green movement to the main office, provide employees with remanufactured toner and inkjet cartridges; refillable pens and pencils made from recycled materials such as cardboard, plastic and newspaper; dual-powered calculators (solar and battery); and recycled post-its, binders, folders, indexes, report covers and copy paper, for starters. (For more ideas, take a look at Green Earth Office Supply [www.greenearthofficesupply.com] and The Green Office [www thegreenoffice com] )

Wells Fargo has taken the concept of earth-friendly products a s t e p f u r t h e r, p r a c t i c i n g w h a t i t c a l l s “ r e s p o n s i b l e p u rc h a s i n g , ” which means avoiding furniture made from exotic woods, using sustainable carpets and buying Energy Star-rated equipment You can also make it a policy to donate rather than throw out equipment and supplies that you no longer need or that you’re upgrading, and to issue recycling bins to each employee for paper, cans, glass bottles, plastics, etc

• Make it a policy to purchase or rent hybrid cars Goldman Sachs estimates that it saved 31,093 gallons of fuel by adding hybrid vehicles to its executive transportation fleets Hertz and Enterprise also have added hybrids to their fleets $68 million between 2007 and 2008 for Hertz alone Another alternative is electric cars, which use energy stored in rechargeable battery packs and electric motors and motor controllers. Although there have been challenges, such as low battery life and the inconvenience of recharging, the technology has come a long way, and continues to improve

If your office features outdoor landscaping, then ditch traditional t

d significantly less water to survive and flourish By adding an automated irrigation system that adjusts its flow according to incoming weather data, you can also save big. Adobe did just that, investing $3,610 in the system and realizing a $9,100 annual saving

An increasing number of companies also are incorporating live plants into their interior design The reasons aren’t merely aesthetic Rather, live plants act as air-cleaners, filtering out toxins emitted by modern office furniture and equipment For example, since a lot of

board contains formaldehyde, the EPA has identified this toxin as the

remove 1385 micrograms of formaldehyde from the air per hour (source: www livingsoil co uk) What’s more, plants decrease CO2 levels, which experts say can cause eye irritation and headaches

Scientific trials in this area do make for some pretty interesting reading. Dr. Roger Ulrich of Texas A&M University found that study participants exhibited a higher level of problem-solving skill and innovative thinking in an environment that featured interior landscaping And the results of a study conducted by Dr Virginia Lohr at the Department of Horticulture and Landscape Architecture, Washington State University, contend that productivity increases as much as 12 percent in an environment that includes plants, and that stress levels are reduced. She also found that plants helped to increase the humidity level within an office environment to the ideal human comfort range of 30-60 percent.

Aside from the environmental issues at hand, the current cost of a gallon of gas has caused a wave of sweaty-palmed panic to sweep the nation Opting for alternatives to the daily car commute, then, is a win-win for both you and the environment. And, just maybe, there’s room in the budget to give employees some kind of monetary reward or other perk for their willingness to try something different Back to Adobe for an example: The company offers secure bike parking and a monthly subsidy for employees who don’t drive to work. Along the same lines, here are some strategies to test drive

• Support an employee carpooling program

• Encourage employees to cycle to work.

• O f f e r i n c e n t i v e s f o r u s i n g p u b l i c t r a n s p o r t a t i o n p e r h a p s a subsidized travel card or a transit plan where employees set aside funds from their pre-tax salaries for commuting costs

On a more ambitious (and therefore costly) level, green roofs can qualify you for LEED (Leadership in Energy and Environmental Design) certification, which rewards businesses with various tax benefits These roofs not only reduce the urban heat island effect (where heat is absorbed and stored by a sea of black roofs), but they also promote improved energy efficiency by acting as an insulator As the EPA explains, “On hot summer days, the surface temperature of a vegetated rooftop can be cooler than the air temperature, whereas the surface of a traditional rooftop can be up to 90°F (50°C) warmer ” Green roofs also “Absorb air pollution, collect airborne particulates, and store carbon Protect underlying roof material by eliminating exposure to the sun’s ultraviolet (UV) radiation and extreme daily temperature fluctuations Serve as living environments that provide habitats for birds and other small animals. Offer an attractive alternative to traditional roofs, addressing growing concerns about urban quality of life Reduce noise transfer from the outdoors ”

M AKE GREEN S SPACE S GRE ENNER 7

SCRAP THE C CAR 6

Ok, this one may seem a bit radical But a recent Fast Company article, “All in a Day’s Work,“ made some compelling arguments for less time in the office. That, however, does not mean less work.

“The United States leads the world in two categories: Work and waste American employees put in more hours and take fewer vacations than just about anyone else in the industrialized world, and our individual ecological ‘footprints’ are much larger The more we work, the more we drive, the more energy we burn, the more Styrofoam to-go containers we use At the end of the day, we’re so tired, we devour more takeout and TV, often falling asleep in front of the latter,” explained the article’s author, David Roberts

In case you think, “So what?” Roberts puts a financial spin on the facts: “France, home of the 35-hour week, creates more GDP per work hour than the United States ($37 versus $34, as of 2003) Norway spanks us too ($39), and Norwegians work 26 percent fewer hours a year than Americans It’s a myth of modern hypercapital-

ism that an overworked, sleep-deprived, stressed-out workforce is a necessity ”

If a shorter workweek is more a pipedream than a reality (and for most of us it is), consider a flexible work environment, where telecommuting is approved for workers whose jobs don’t require them to be physically present at all times. In a similar vein, rather than sanctioning business trips, look into video conferencing and telemeeting capabilities, such as Adobe Acrobat Connect, which is an alternative to in-person meetings Air travel, incidentally, is one of the most carbon-intensive means of transportation

There are many more strategies you can use to green your business environment But, admittedly, some take a lot more cash and effort than others Think of what it would take to commit to doing business with only green suppliers, for instance, or to re-engineer your production line in order to reduce waste

The eight strategies outlined here, however, are intended as a viable departure point Your ultimate destination? Sustainability and conservation of both our ecosystems and our profits

The GREENI NG of BUSINESS

Is ecological economics an altruistic money pit? Or can going green actually improve the bottom line over time?

By Kristine Blenkhorn Rodriguez

THINK QUICK: GE.

What comes to mind? Jack Welch? Earnings? Diversification?

Sure. All of the above. But did you think “green”?

THINK IKEA.

Inexpensive Streamlined Great meatballs (What, you’ve never eaten in its cafeteria?). And environmentally friendly.

What’s the difference? Ikea is a company that, from the very start, has made its position on the environment clear It keeps its impact on the environment as light as possible and it has spent money to ensure its buying public around the world knows its position on the issue GE, on the other hand, has an established reputation for coal-fired steam turbines and power plants

To change that reputation and become a greener entity, the company began Ecomagination, an initiative intended to unite GE’s green technologies (wind turbines, solar panels, etc.) under one umbrella.

W h i l e E u r o p e a n c o m p a n i e s h a v e g e n e r a l l y o u t p a c e d t h e i r A m e r i c a n p e e r s i n e n v i r o n m e n t a l l y f r i e n d l y b u s i n e s s p r a c t i c e s , U S b u s i n e s s e s a r e now greening themselves at an increasingly frenetic pace Far from alone, GE is joined in its green efforts by its larger brethren around the world: Unilever reconfigured its plastic Suave shampoo bottles to use less plastic Office Depot saved nearly 66 million kilowatts of electricity in an energyefficiency campaign conducted for warehouses and stores DuPont has been working on reducing its carbon footprint for two decades.

Which begs the question: Where is all this altruism coming from? Are we, in fact, being greenwashed?

“Greenwashing” is defined as a large company’s effort, usually mediaintensive, to convince the buying public and investors that its practices are environmentally friendly in every possible way

While the truth probably lies somewhere between altruism and greenwashing for any big business, one fact is emerging undisputed: If you do it right, the greening of business saves big dollars over current resource-intensive processes With just about every resource rising in price, even green technologies and processes that initially cost a bit more than traditional ones are becoming economically advantageous to companies of all sizes.

These savings were not always possible, but recent advances in green technologies building materials, supply chain modifications, etc and the boom of companies offering green products and services, have made going green a downright profitable move. And with government regulation becoming what most analysts would call a sure thing, companies now have more incentive to be proactive; regulating themselves before Big Brother does it in a much more painful manner

o t trimmed its electric bill by $6 2 million when it made its stores and ware-

Lucky if You’re Local

Illinois hasn’t traditionally rivaled more progressive states like California or Vermont when it comes to environmental practices OK , let ’ s be honest, we weren’t even remotely in the same league

Enter the Green Exchange, a 272,000- square -foot building at 2545 W Diversey Ave in Chicago, housing 400 to 600 professionals who focus on various aspects of environmental sustainability This puts the organization in an ideal position to serve the needs of local businesses that either want to launch or further develop a green initiative.

The Green Exchange’s location is also worth a mention The facility is, of course, green, replete with a 41,000-gallon rain cistern, a 9,000- square -foot organic garden, an escalator that uses 30-percent less energy than traditional models by slowing to a crawl when not in use, and solar thermal panels for hot water and air- conditioning

“Green design b u i l d i n g s h a v e b e e n s h o w n t o i n c r e a s e employee productivity up to 15 percent,” says Phil Baugh, the Green Exchange’s director of community development “ You think things like indoor air quality don’t matter, but studies show that they do A green building reduces absenteeism Its natural light increases productivity When you give the majority of young people a choice work for a green or a t r a d i t i o n a l l y m i n d e d c o m p a n y t h e Tu r n e r B a r o m e t e r

Study tracked 78 percent choosing green ”

Housed in the old Frederick Cooper lamp factory, the Green Exchange is expected to open to the public in the first quarter of 2009

For m ore inform ation, visit www greenexchange com

houses more efficient. Unilever saved the equivalent of 15 million plastic bottles per year on a billion-dollar brand DuPont’s lighter carbon footprint saved it $3 billion And Ikea’s flat-pack boxes have saved the company about 15 percent per item per year in transportation costs.

Enter Ecological Economics

To D r. K a r e l S a m s o m , t h e g r e e n i n g o f b u s i n e s s m a k e s p e r f e c t sense, but would have made the same sense 10 years ago As a professor of ecological economics, he may be dismissed by the average reader as a tree hugger who knows more about the ozone l a y e r t h a n b i g b u s i n e s s . H i s r é s u m é b e g s t o d i f f e r, h o w e v e r. S a m som is a former Towers Perrin consultant, a former international executive with Eli Lilly & Company and Alcon Laboratories, a n d w a s a s o u rc e o f a s s i s t a n c e o n h i g h - l e v e l p r o j e c t s f o r t h e

Netherlands Ministry of Economics

“I have always been fascinated with the naked power of economics,” he explains. “As entrepreneurs and businesspeople, we throw our weight around in such a heavy-handed way We sometimes lean too hard on our social and environmental resources ”

In the past, Samsom has felt stymied by those who have, in his opinion, missed the point. “In business, the fastest way to your objective is usually measured via currency. But currency no longer represents well-being,” he explains “Educated consumers seem to understand this and yet many executives trying to attract them still miss the point When the byproducts of our expediency-driven economy are visited on people that are not part of the transaction, we have failed. This is the bottom line of ecological economics.”

The savings companies reap from green practices are important to the average investor only inasmuch as they affect the balance sheet, says Alex Seagle, a principal in contrarian investing firm F r a s e r M a n a g e m e n t . A s k e p t i c a l v i e w ? Ye s . B u t w h i l e s o c i a l l y responsible investing continues to grow, “At the end of the day, my clients will ask one question: ‘Have you made me money?’” he comments That question makes Seagle a choosy investor one that cares less about social and environmental responsibility than he does about fiscal responsibility.

The solution? Green companies that are rolling in the green For example, green construction “What was a $2 billion industry in t h e U S i n 2 0 0 5 i s n o w p r o j e c t e d t o b e $ 6 0 b i l l i o n b y 2 0 0 9 , ” says Seagle. Green construction involves everything from designing a new green building using only ecologically friendly materials and p r o c e s s e s , t o r e t r o f i t t i n g a n e x i s t i n g b u i l d i n g t o h a v e a l i g h t e r impact on the environment

Seagle cites China’s Pearl River Tower, a 71-story building slated for completion in 2009, as an example of how far green construction has come in a very short period of time. Relying solely on wind and solar power for its energy, “It may be the first building that produces more energy than it consumes,” he says It’s an example of turning ecological economics on its head in a beneficial way If those not part of the transaction are subject to the byproducts of this b u i l d i n g , t h e y w i l l be p o s i t i v e l y r a t h e r t h a n d e tr i m e n t a l l y i m p a c t e d p a r t i c u l a r l y a s w e h e a d i n t o w h a t m a n y e x p e r t s describe as another energy crisis

Ground-up Momentum

Samsom was thought of as a “liberal softie” 15 years ago when he taught a graduate seminar in ecological economics. “My students would laugh, thinking I took things too far,” he recalls. “I asked them, ‘Would you expose your children to this?’ meaning whatever pollution or wasteful action the company under discussion

was guilty of The minute I asked that, the conversation changed They started to care ”

Samsom experiences the same sentiment today, but on a much broader scale Executives from the lowest to highest levels are seeing the results of managing a business and its resources the traditional way. And it’s not pretty.

In years past, individuals who brought up environmental concerns from the boardroom to the factory floor got little respect “Now, these individuals have a community to turn to,” says Liz Maw, executive director of Net Impact [www netimpact org] The organization has a mission to “change the world through responsible business practices.” More than 10,000-members strong in corp o r a t i o n s , n o n p r o f i t s a n d u n i v e r s i t i e s o n s i x c o n t i n e n t s , N e t I m p a c t o f f e r s r e s o u rc e s for individuals who want to make their organizations more environmentally or socially responsible

Skeptics may picture a lot of hemp-wearing former hippies holding hands and singing about Mother Nature Debra Natenshon, Chicago’s Net Impact professional chapter leader, says “no way ”

“Most of our members work 60 to 80 hours a week in very trad i t i o n a l c o r p o r a t i o n s . T h e y ’ r e i n t h e i r m i d - t h i r t i e s a n d h a v e w o r k e d h a r d o n t h e i r c a r e e r s . T h e y ’ r e e n t r e p r e n e u r s , c o n s u l tants not lightweights And yet, many have felt disenfranchised because they had difficulty finding kindred spirits at work people who think the business of making money can be combined effectively with ecologically and socially responsible practices ”

Members’ actions have had various results, from the formation of a US environmental task force for Accenture and subsequent decisions to pursue LEED (Leadership in Energy and Environmental Design) certification for a US building under construction, to installing printers capable of double-sided printing to reduce paper waste at Brown-Forman, the spirits company that distributes brands such as Jack Daniels and Southern Comfort

In the Final Measure

Heavy hitters like McDonald’s Corporation, Levi Strauss and Kraft are not content to take social and environmental savings as they c o m e . T h e s e c o m p a n i e s a r e e v o l v i n g t h e i r c o r p o r a t e s o c i a l responsibility (CSR) departments into strategic business units that t r a c k a n d r e p o r t o n o u t c o m e s i n t e n d e d t o b e n e f i t t h e i r s o c i a l agenda as well as the business’ bottom line

Erin Simmons, a campaign manager for Mission Measurement, has seen firsthand how projects meant to make an impact get a sometimes skeptical reception from the CEO “They usually say, ‘So what? What’s the impact on my business? How do we justify the money we are spending on CSR and sustainability?’” she admits.

M i s s i o n M e a s u r e m e n t i s a C h i c a g o - b a s e d f i r m t h a t h e l p s t o incorporate social impact into the business case for firms of all sizes “The market for good has expanded: Consumers, investors and even employees want companies to produce positive social or environmental impact We help to align these outcomes with the desired business outcomes,” says Simmons. After all, no corporation fancies itself a social agency, but most won’t object to leaving the communities in which they do business better off than when they entered them

Samsom sees that willingness as an entry point “You have to be an egomaniac not to see that if economy and ecology continue to deviate, we’re digging our own graves And we’re doing this to the next couple of generations…I used to be a financial guy. Even the most hard-nosed financial executive will agree that pure greed is not what it’s about ”

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Standing Ovation

Everyday, Illinois CPA Society members provide countless volunteer contributions that deserve applause Whether it’s speaking to college students, providing pro-bono tax preparation, or lending technical expertise, their volunteer activities support a strong accounting profession and make us proud to be CPAs

CPAs Contribute to the New Wave of Gulf Coast Recovery

This summer, members of the Illinois CPA Society’s (ICPAS) Young Professionals Group spent a week in New Orleans, La helping in the rebuilding process following the devastating effects of Hurricane Katrina. The trip was made possible in part by the generous sponsorship of Leaders Bank of Oak Brook, and was held in conjunction with Operation Hope and coordinated with the North Carolina Society of CPAs.

Hearing and seeing the impacts of Hurricane Katrina, and gathering information from area CPAs and federal and local agencies, the Society’s Young Professionals took advantage of a unique opportunity to use their skills to work with smallbusiness clients. They coached and counseled a daycare provider, a shrimp boat operator, a cupcake business operator, a modular home seller and others on business essentials like tax returns, spreadsheets and software

A standing ovation to the ICPAS Operation Hope Outreach Team:

Kory Blumer, CPA Ernst & Young LLP Chicago, IL

Andy Dumich Crowe Chizek and Company LLC Chicago, IL

Sara Mikuta, CPA Leaders Bank Oak Brook, IL

Bill O’Hara, CPA John Buck Company Chicago, IL

Beata Parada, CPA Deloitte Tax LLP Chicago, IL

Special Acknowledgement

Jason Parish, CPA Blackman Kallick LLP Chicago, IL

Sonya Solomon Gimbel, Abrams and Singer Chicago, IL

Porschia Thomas-Quinn Institute of Real Estate Management Chicago, IL

Genevieve Waldron, CPA Virchow, Krause & Company LLP Chicago, IL

Ross Thomson Leaders Bank Oak Brook, IL

The trip to New Orleans would not have been as successful without the assistance of members who gave generously of their time to prepare the young professionals for their trip For their special contributions to the Operation Hope Outreach team, a special standing ovation to these volunteers:

William M. Dumich, CPA William M Dumich, CPA Schaumburg, IL

Burton W. Goode, CPA Burton W. Goode, CPA Buffalo Grove, IL

Steven D. Masur, CPA Warady & Davis LLP Deerfield, IL

Special thanks also to Microsoft and the IRS for their donations.

We have done our best to compile the full list of volunteer names However, if we missed an yone, we deeply regret the omission

To submit information for an upcoming “Standing Ovation,” please email Judi Kulm at k ulmj@icpas org

Accounting and Financial Reporting Updates from the SEC, FASB, IASB, AcSEC and PCAOB

An all-star lineup of the “who’s who” in financial reporting - all in one information-packed day.

A comprehensive overview of the latest developments and projects impacting your business and/or clients.

A unique opportunity to interact with panelists to pinpoint your specific concerns.

Friday, September 26, 2008

Donald E. Stephens Convention Center Rosemont, Illinois

Time: 8:20AM - 4:45PM

Code: C36293

CPE: 8 Credit Hours

Cost: $325 Member/$395 Non-member

SPECIAL OFFER

$100 off each additional registration when submitted together via mail only.

Gregory J. Jonas, CPA Team Managing Director of Corporate Communications, Moody’s Investors Service

James L. Kroeker Deputy Chief Accountant, US Securities and Exchange Commission (SEC)

James J. Leisenring, CPA Board Member, International Accounting Standards Board (IASB) and IASB Liaison to the FASB

Benjamin S. Neuhausen, CPA Chairman, AICPA Accounting Standards Executive Committee, National Director of Accounting, BDO Seidman, LLP

Tom Ray, CPA Chief Auditor, Public Company Accounting Oversight Board (PCAOB)

Katherine Schipper, PhD Thomas Keller Professor of Business Administration, Duke University

Lawrence W. Smith, CPA Board Member, Financial Accounting Standards Board

David M. Wing, CPA, MBA Vice President and Controller, United Airlines, Inc.

To register, visit www.CCFLinfo.org or call 800.993.0393.

David L. Landsittel, CPA Symposium Chair