Investors, deal-makers, regulators and other stakeholders are increasingly focusing on the environmental performance of companies. Aside from the importance of sustainable business practices and corporate responsibility, environmental reporting in financial statements is extremely judgmental and subjective. This is especially true in sectors such as chemicals, energy, utilities, mining, metals, electronics, defense and others. This reporting requires companies to exercise judgment and expertise not only in the accounting area, but in the engineering area as well. How companies bring together these two disciplines is critical to effective environmental reporting.
Environmental exposures have complex and financially material impacts involving multiple parties. These impacts can be relevant to divestitures, acquisitions and IPOs where companies often look to:
Not only do environmental liabilities, AROs, capital spending, compliance requirements and sustainability objectives have accounting and regulatory implications—they also impact deal value. Among the key environmental due diligence issues to be considered are:
Investors are increasingly taking a longer-term view, seeking to understand how environmental and other sustainability issues may impact target businesses, and whether there are opportunities to minimize risks, drive out costs and enhance revenues.
Navigating environmental liability reporting requirements requires complex accounting skills, deep engineering and technical knowledge, an up-to-date compliance perspective and significant judgment. PwC’s environmental subject matter specialists are well-placed to bring together these different skill sets and help you enhance the quality of your financial reporting, audit readiness, liability valuations and the effectiveness of your reporting controls.
Contact us to learn more about how we can help you optimize business value, and minimize risks and uncertainties, through proactive resolution of your environmental reporting issues.