March 31, 2025 • 25 mins
Get ready for an enlightening chat with Alissa Vickery, the newly appointed interim CFO and the Chief Accounting Officer, SVP Accounting and Controls at Corpay, on Count Me In! In this episode, Alissa, who's appeared with us twice before, sits down with host Adam Larson to tackle the complex world of ESG reporting challenges and operations. At Corpay, Alissa's been knee-deep in this evolving landscape, and she's here to shed light on the hurdles finance teams face in adapting to new SEC regulations.
Join us as Alissa shares her firsthand experiences navigating the maze of global standards and how her company learned to prioritize and adapt. From figuring out double materiality to streamlining ESG operations with tech and third-party expertise, it's all discussed with practicality and insight. Whether you're in finance or just curious about the future of corporate sustainability, this episode is packed with valuable takeaways and a unique industry perspective.
So plug in and grab your notepad—it's a conversation you won't want to miss!
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Adam Larson (00:20):
Welcome back for another episode of Count Me In.
Today, we're excited to welcomeback Alyssa Vickery, the chief
accounting officer at Corpay fora third appearance. Having
shared her insights onleadership and CFO roles in the
past, Alyssa now delves into theESG reporting challenges brought
by the new SEC rules oncorporate sustainability. With
her extensive experience andrecent articles on this topic,
(00:42):
she discusses the pressing needfor companies to prepare for the
diverse reporting requirementsacross various jurisdictions.
Alyssa emphasizes thesignificance of embedding ESG
principles into the corestrategy of an organization
beyond mere compliance.
Whether you're navigating ESGfor the first time or refining
your current approach, Alyssa'sinsights are invaluable. Join us
(01:03):
to explore how to effectivelymanage reporting by thinking
globally and acting locally.Tune in now for this insightful
conversation. Well, Alyssa,we're really excited to have you
back on Count Me In. This willbe your third time on our
podcast.
We've talked about leadership.We've talked about you jumping
(01:23):
into a CFO role temporarily andwhat that looks like. And today
we're going to be talking aboutESG reporting challenges and
operations, which you and yourteam have been working real hard
and you've been writing articlesabout it. And so I am really
excited to kind of jump in andhave this be our topic today. So
SEC ruling has new rules on ESGreporting.
It's brought a lot of attentionto corporate sustainability.
(01:46):
What are your some of thebiggest challenges that finance
teams are facing as they preparefor these new requirements?
AlissA Vickery (01:51):
Yeah, I mean, I would say, depending on the size
of the company, they're quiteextensive. And maybe just a
level set for the audience. Youknow, what the standards say
today, and what we're personallydealing with at Corpay. You
know, the SEC did come out witha set of rules back in March of
I think that's '24 now. Andthose rules quite frankly got a
lot of people moving, includingus.
(02:12):
But shortly after the rules cameout by the SEC, they were
quickly stayed by the SEC due tosome court proceedings
challenging certain of therulings, the the
constitutionality, all all thethings. And so while the SEC
went on pause, the rest of theworld did not, which I think is
the most important takeaway. Soregardless of when The US
(02:33):
regulatory environment catchesup from a I'll call it the
federal level, from a Europeanstandard, from a Brazilian
standard, potentially even froma California standard, companies
really do need to start thinkingabout where they may have
reporting requirements. Andthose reporting requirements are
coming up fast. And so, youknow, organizationally, as you
start thinking about the kindsof data that's being requested,
(02:57):
to be reported, what we've doneis we've we've viewed it from,
I'll call it, the most detailedbubble of governance that might
exist today in terms of whatthat reg looks like.
And for us, that's the CSRDstandards that are pervasive
throughout Europe. Thosestandards have somewhere along
the lines of 1,400 differentrule sets that you then have to
(03:19):
go evaluate and figure outwhat's relevant. And after you
figure out what's relevant, thenyou have to determine, alright,
I I think I need to talk aboutthis topic, but what's material
to speak about within the topic?Now, upon how your organization
is managed and is organized, youmay be doing that every time you
close the books by jurisdiction.And so for for us, that means,
(03:42):
hey, I've got about five or sixcore locations globally where I
close books.
Within those six locations, Iprobably have over 200 legal
entities. Now what? And sothat's where the challenge
really comes in, and figuringout what matters, what you're
required to report, what you mayeventually have to report, maybe
(04:06):
not today, but maybe four yearsfrom now. What makes the most
sense for your company today?Are you going to take the
partial bite of the pie?
Or you just gonna go ahead andeat the whole thing knowing
eventually you're going to haveto anyway?
Adam Larson (04:19):
So is that like a from a company company
perspective, looking at takingthe whole pie versus piece by
piece? Because some people mightnot be able to dump in and do it
all at once, and the piecemealworks. But is there is there a a
one way that works betterdepending what industry you're
in?
AlissA Vickery (04:33):
I'm not sure it that you get to think of it that
way, unfortunately. I think youhave to go and perform what's
called the double materialitytest. So under under the
European standards, there's acouple of ways to view it. But
the first and foremost is youperform what's called double
materiality at the top of thehouse. That double materiality
takes into account impact andvulnerability across the
(04:53):
entirety of the organization.
And then based on, I will callit, true quantitative
thresholds, starts to definewhat you have to do. And so, for
a company, they may have arequirement at a legal entity
level if they breach the assetsand the number of employees
test. If you don't breach thosetests at the individual legal
(05:15):
entity level, then you start toroll up. And so for us, it's
it's coming down to, alright, amI going to report based on my
European parent? Or am I gonnajust report based on the very
top of the house consolidated?
And so, I'm not sure if there'sCertainly less is easier, just
(05:37):
in the context of going andexecuting. But it could be
depending upon the size of theorganization. Again, how it's
organized. Yeah. How the officesare even set up.
Because if you start thinkingabout greenhouse gas greenhouse
gas emissions, well, arefundamentally, at least for,
I'll call it, non manufacturingtype companies, they're they're
(05:58):
being generated by your employeebase. By your employee base as
they show up in the office, asthey work remote, as they drive
their vehicles, as they travelfor work. Say, if you're flying
internationally versus flyingdomestically, whether
domestically means withinGermany or if it means, you
know, within The United States,you are emitting those
greenhouse gases, and how do youmeasure them? And then how
(06:21):
ultimately do you report them ona consistent basis globally,
potentially?
Adam Larson (06:28):
Talk about overwhelming. That just feels
overwhelming. Just youdescribing that, I'm like, oh my
goodness. How does somebody likestart, like, get started? Like,
okay, I wanna
AlissA Vickery (06:36):
Yes. I would say the first thing we did was try
to get educated. So there areclearly experts in the field.
You know, the the accountingfirms make a living off of,
trying to assess what mattersand what's coming up next in the
industry. But frankly, you know,getting in front of those
experts, helping Yeah.
Understanding what the landscapeof regulatory framework looks
like. Educating your leadershiparound you, educating your board
(07:00):
who may have oversightresponsibility for something
that they're not even aware ofjust yet. Figuring out where in
the organization it might lie,and then having the
understanding that even from,like, my seat where I the reason
I've taken it on from aleadership perspective is I know
that ultimately, those outputsare likely to have to be
audited. Mhmm. And if I'mleading the efforts for managing
(07:22):
the relationship with myexternal auditor, then I wanna
make sure that that data iscollected, analyzed, calculated,
reported in a consistent manner,regardless of which entities
we're talking about.
So that ultimately, what theauditors would then try to opine
on, at least to have someconfidence it was rolled up in a
manner no different than perhapsthe quality with which I closed
(07:45):
the books from a financialreporting perspective. Beyond
that, it's learning who yourpeers within your organization
are, who need to be keystakeholders. Mhmm. And so, in
most organizations, this isgonna be sustainability
officers. It's going to beinvestor relations, potentially,
or PR.
(08:05):
Because there is a bit of ahere's how we think about it as
an organization and how we speakto it outside of our
organization perspective. Thereis a regulatory and legal
compliance to it. So my generalcounsel is very engaged and
involved. But it can't just bethose individuals who sit at the
corporate level. It has to bedisseminated within the
organization.
(08:25):
Again, back to how are youorganizationally structured and
how do you then force the peoplewithin the layers where it
actually is a European reg, nota US reg that I'm trying to help
manage. I need to ensure thatthose individuals have it on
their radar, and it's somethingthat they care about, and
something that they understandhow they're gonna go and execute
(08:46):
on. So the term we've coinedinternally, and perhaps it's not
unique to us, but is thinkglobally, but act locally. And
if you can act locally, you havethe ability to create buy in at
the level at which all the datawould need to be reported and
collected. And thenfundamentally, you may be able
(09:07):
to have controls around thatdata so that when it comes up
and it actually is reportedconsolidated, you've got a
quality output.
Adam Larson (09:16):
Yeah. That's I mean, because it's audit,
because it will be audited,because of all that stuff
coming, it makes a lot of sensefor somebody from the finance
team to lead that. But as I'vetalked to others about, you
know, this type of a topic, theyall say the same thing where you
need a wide ranging group ofstakeholders from the
organization to create that buyin. But also it helps to become
(09:37):
a genuine part of your strategyas an organization, because it's
not just about reporting rules.Let's get all those reports good
and we're good to go.
It has to be more than that.Right?
AlissA Vickery (09:45):
A %. I mean, it has to be, I'll call it legally
accurate for for one. You can'tjust go out there and just say
something for the sake ofchecking a box. Yeah. It has to
be truly part of who you are andwho your corporate vision.
But I think ultimately, it thenhelps to permeate the culture.
If this is something thatinvestors, something that the
shareholder public, or thatconsumers and regulators are
(10:09):
concerned about, then it must besomething that we take very
seriously as well, and thatwe're concerned about. And it's
not so to say that it's notsomething that was on our radar,
but you just were never in a ina situation or in a requirement
to report on it historically. Itjust puts a different kind of
line of sight into that data,the importance of the data, and
(10:30):
the right individuals who arepart of the process to collect
ensure the quality.
Adam Larson (10:37):
So you were saying earlier that, you know, Brazil,
Europe, maybe even California,and eventually maybe the SEC,
and who knows wherever else yourorganization works, what is it
like kind of having to deal withthose different rule sets within
your organization?
AlissA Vickery (10:51):
Right. So I would say it's quite
challenging, as you might Ithink that the one nice thing
about it though, at this pointin the- in the process is there
does seem to be a meaningfulamount of overlap. So, I think
one of the things, perhaps, thecorporate community is hopeful
for, especially those of us whodo business in multiple
jurisdictions- Mhmm. Is thatthere will be a rationalization
(11:13):
and an and an alignment of thevarious standards. Because there
are multiple standards underwhich each of the regs have been
written or intended to complywith.
Yeah. Which you wouldn't thinkwould be all that different. And
I think it does depend onindustry how different they are.
But creating alignment, creatinga bit of a mapping as well,
(11:35):
which is something that we'reworking on with with some third
party vendors to ensure as we goto comply in Brazil, where I
have to report locally, ifthey're going to go through the
process to gather the data toenable them to report on a
standalone basis for the countryof Brazil, well, in theory, I
should be able to leverage thatsame information for purposes of
my European report. Because ofmy structure, ironically, Brazil
(11:59):
will be included as part of myEuropean top of the house.
And so, similarly forCalifornia, their scope is much
more narrow. It's it's primarilyfocused on greenhouse gas
emissions. So scope one, two,and three. Those definitions
tend to be far more explicit,and so a little less
interpretation. But time willtell as regulators start to
(12:20):
actually ingest the informationthat's reported as to how much
alignment really exists.
And I think that's when it getsa little tricky. Because what
you think might be enough, andprobably is enough depending
upon where we're doing business,it ultimately may not be exactly
what California was looking for.Right? And so, it it creates a
little bit of a challenge in ourability to just kinda keep up,
(12:42):
you will.
Adam Larson (12:43):
Yeah. So with all those different changing
regulations and things, youknow, having to stay on top of
that, have you guys been able touse different technologies and
data analytics to kinda play arole in kind of enhancing this
process? Because I'm sure thatit's you're not all sitting
there with a notebook. Well,California changed. Let's write
it down in our our banker'snotebook.
AlissA Vickery (13:01):
Right. So I think there are a number of
tools out there to helpcompanies to help manage the
process. We've selected a vendorthat we've done a lot of
business with in the past,around sort of our Sarbanes
Oxley and SEC compliance. Okay.So that we use this this,
solution that's developed byWorkiva.
And we've basically bolted on amodule. And we've done that
(13:22):
purposefully, because one, thereis global understanding how to
use the tool.
Adam Larson (13:26):
Mhmm.
AlissA Vickery (13:28):
The tool has been developed in the module
specifically by the vendor tobasically manage the disparate
work streams that wouldinherently be required to be
able to gather the data. Not toodissimilar from how you might
structure a global ERP, to wherefundamentally, I'll have my rule
set. I'll have mapped that intothe underlying standards. So,
(13:54):
that that apply within Europe,that apply in Brazil. But then
ultimately, as I create workflowand assign, hey, I need your
greenhouse scope one greenhousegas emissions generated by coal.
We don't actually have coalproducts, but it's it's a really
nice, like, visual example. Soeverybody who would report that
(14:14):
on a stand alone basis wouldreceive some workflow
management, an email notifyingthem time to submit your data,
and they would submit it upthrough the tool. I can see it
sort of in a, I'll call it, ourline of business level or a
legal entity level to thenultimately roll it up. And so I
I do think having things sit insort of electronic frameworks
(14:37):
that are sort of built to helpmanage the data is super
helpful. No no different than Iwould say from closing the
books, and reporting revenue andfinancial results.
Having something that helpsfacilitate that is meaningful
and useful. There will also be arequirement, if you're doing
business in Europe, to documentyour double materiality
assessment. And that'll be anannual assessment that companies
(14:59):
have to go through. The firsttime is always the most
difficult because you're tryingto figure out what you care
about. Mhmm.
Once you figure it out the thatthat first round, you probably
have some refinement at theedges that occurs over the
following years. But having itin one place, and for us, having
it all in the same place as weultimately collect and report
(15:20):
and record
Adam Larson (15:21):
Yeah.
AlissA Vickery (15:21):
I think will will become an advantage an
advantageous approach to thework because I can direct my
auditors to the same tool toexecute all their procedures
from.
Adam Larson (15:34):
Yeah. Wow. That that definitely simplifies the
process, but it sounds likethere's a lot of legwork to do
to get it to that point whereyou're you can do that.
AlissA Vickery (15:42):
Right. Unfortunately. And I would say,
you know, my team, we are a bitof a SME in the organization
when it comes to use of theWorkiva platforms, but it it
does require some third partyassistance for sure. Some real
project management and planning.We've we've opted to utilize a
third party vendor to assist us.
So, we've hired them on aconsultative basis. They have
(16:03):
extensive experience andknowledge helping other clients.
Adam Larson (16:06):
Yeah.
AlissA Vickery (16:07):
Not just in our industry, but, you know, just
within within the environment toadopt the standards, perform
double materiality assessments,and ultimately help them define
sort of the rules that are themost relevant material. And then
ultimately identify the gaps inthe process that they may then
may then need to go work andclose as an organization before
(16:28):
they can effectively get to thereporting phase.
Adam Larson (16:32):
Have you seen that this ESG reporting, these new
reports, have you seen itinfluencing like the risk
management strategy of theorganization as you've been
going through that with thecompany?
AlissA Vickery (16:41):
I would say only on the- on the edges at this
point.
Adam Larson (16:44):
Okay.
AlissA Vickery (16:45):
Again, because we're not in that manufacturing
space
Adam Larson (16:48):
Yeah.
AlissA Vickery (16:49):
Typically, I would call it the whole ESG
framework isn't somethingspecifically the e side Yeah.
Which seems to be the thing thatcreates the most incremental
work for companies. It's notsomething that we've been hyper
focused on. Do we have healthhealth and safety? Yes.
Do we have recycling programs?Yes. Do we have people first
programs and resource groups forour employee base and engagement
(17:11):
service? Yes. We have all ofthat stuff.
We just have never sort ofpacketed it up in a way that was
more aligned with sort of wherethese standards are headed.
Mhmm. And so so from a riskmanagement strategy perspective,
yes, it it is in there. It'ssomething we're talking about at
the, the the highest levels ofthe organization. But today, it
(17:32):
is still a little bit on thefringe as a supplement to the
broader corporate sustainabilityreporting that that we've
historically put out there forthe broader market.
Adam Larson (17:41):
Yeah. I I found that as I talk to folks in
different industries, certainindustries are very hyper
focused on aspects of it becauseit affects many aspects of their
business, especially thetrucking companies,
manufacturing companies, they'resuper in there, but you know, if
you, if you have a softwarebusiness, you don't necessarily
have to worry about like, okay,like what about my servers,
things like that, but there'snot a lot of other aspects of it
(18:04):
that really affect them and it'skind of hard to find that
balance, I
AlissA Vickery (18:07):
feel Right. And I think that's fundamentally why
the whole, is it relevant? Yes.Is it material? Maybe.
Assessment comes into play. Andso really being thoughtful about
who you are as an organization.What is meaningful to a reader?
What is meaningful to aregulator? More to come on that,
I am sure.
But you're trying to makejudgment calls based on how we
(18:27):
understand our our valueproposition works. But
ultimately, I think it'sfiguring out it's not so hard to
figure out what you do as an organd your third party partners,
like in terms of infrastructure,like you said. I think it's that
value chain proposition. So thatwhen you get to scope three,
that's when it becomes a littlemore challenging because you do
(18:48):
have to make judgment calls anddraw the line somewhere Mhmm.
Because that picks up onsomebody else's process.
Adam Larson (18:55):
Can you just describe what scope three is?
Because I've people mention it alot, and other times, they don't
always what is that? What is thescope three as part of the
process? So
AlissA Vickery (19:03):
scope three is sort of it's beyond your direct
and indirect greenhouse gasemissions. It's it's sort of
what does your value chain alsoproduce in terms of GHG? And
that that can mean a lot ofdifferent things. So, hey, I
have a card and it has a chip,and then that chip is then
manufactured by a third party tomy card manufacturer. So how far
(19:27):
down the value chain do you go?
How far back do you collectthose greenhouse gas emissions
to ultimately then report upon?That's way more difficult to
analyze than how much energy didmy facility in London use.
Adam Larson (19:42):
Yeah. I can imagine that that would get pretty nitty
gritty depending on howcomplicated like, if you're man
in the manufacturing business,that would get really
complicated.
AlissA Vickery (19:50):
Absolutely. Absolutely. Because the number
of inputs I mean, in theory, alot of companies are not
vertically integrated. And so tothe extent they're using
partially manufactured productsto then build their own product,
it can become cumbersome in ahurry.
Adam Larson (20:07):
Yeah. What did that look like when when you were
kind of digging into thisprocess? You know, you've
mentioned that, you know, youguys brought in a third party.
What did that look like from aas you kind of readjusted your
team to kind of focus on this?
AlissA Vickery (20:22):
So I would say, you know, unfortunately, we
utilize a lot of the sameresources who do have day jobs.
We haven't necessarily had theability or the need at yet to go
and hire somebody who's fullydedicated to this. Gotcha. So I
think hiring a third party tohelp lead us along the path was
(20:43):
certainly instrumental in notmaking any broader hiring
decisions just yet.
Adam Larson (20:48):
Yeah.
AlissA Vickery (20:48):
We have brought in some sustainability
thoughtware in the form oftemporary resources to assist
us. Mhmm. But for now, we arestill in implementation phase.
We turned on the tool. Westarted doing our assessment.
We have an idea of what optionslie in front of us. We've
started going down the relevantand material route. What we
(21:11):
haven't done is started actuallygoing to the business and
saying, start collecting it. Sojust to give you a sense of sort
of where we are in Yeah. In theprocess.
Adam Larson (21:22):
So you're you're real fresh from, just just
getting going and trying tofigure all those things out.
AlissA Vickery (21:27):
Very much so. I I would say we are more than up
to speed and getting highlyeducated at this point. And so
the the next step is quitefrankly gonna be the hard one.
Adam Larson (21:37):
Yeah. It's
AlissA Vickery (21:37):
let's go measure. Let's go gather. Let's
go collect. Let's go write downwhat our corporate governance is
around these topics.
Adam Larson (21:46):
Mhmm.
AlissA Vickery (21:47):
And while it exists, I would say, in a
skeletal form, it doesn't existin the level of detail that is
necessary to comply with thestandards that that appear to be
relevant to us.
Adam Larson (21:58):
Yeah. And I suppose that's the nice thing about the
way you guys started, whereyou're like, you you saw the
regulations coming, you're like,Hey, let's get on this, because
if you wait to the last minute,you don't have the time that
you're having to kind of refinethings and try it out as you go.
AlissA Vickery (22:11):
No, I think that's a % right. I think we do
have a little bit of thecourtesy of the time. I would
say, it does appear that we havereporting requirements for 2025.
The good news is, I don't haveto report until probably summer
of twenty six.
Adam Larson (22:27):
Yeah.
AlissA Vickery (22:27):
So I I do have a little bit of, I'll call it, you
know, the backward look that I'mgoing to be able to do. And I
have the ability to takeadvantage of the calendar on.
But it is a lot of data, and weare a large company. And so, I'm
glad we got started. Because ifif you don't start, it would get
very difficult when you getclose to those deadlines to feel
(22:48):
confident in ultimately whatyou're going to report.
Adam Larson (22:50):
Well, and it's great too that you have the
technology in place because Iimagine, with their platform
putting things in, they havedifferent ways to to know which
regulations you're going for,which will help with the
reporting and knowing whatyou're missing, knowing what's
in there, and being able toconnect with folks.
AlissA Vickery (23:04):
A %. I mean, having trusted vendors who-
Yeah. You know how to use theirtools, and they continue to
build functionality that ishighly scalable and ratable
throughout your organization.Yeah. It is extremely helpful in
terms of this adoption.
Adam Larson (23:23):
So, I mean, the future is up in the air. You
know, many regulatory changesobviously happening with the
recent presidential election inThe US and, you know, all the
different ups and downs goingon. But the rest of the world
doesn't see the rest of theworld is definitely going this
direction. Who knows where TheUS is gonna go? You know, what
do you think the future holds asfinance leaders are trying to
(23:44):
navigate these waters,especially for multinational
organizations?
AlissA Vickery (23:48):
Yeah. I mean, I would say it does seem to be a
bit of a wave, and we're ridingit, and this is the first wave.
Yeah. It seems like the moreplaces you do business, the more
places you are likely to have toreport something.
Adam Larson (24:03):
Yeah.
AlissA Vickery (24:04):
And as we look around the globe, we know it's
not just limited to the handfulthat we've that we've mentioned
on this podcast so far. We knowthat that Canada has some
version of standards. Mexicodoes. New Zealand and Australia.
And so, you know, it it reallydoes create a bit of a a rolling
snowball, if you will, to whereyou have more people or more
(24:24):
regulators vest vested inunderstanding how companies are
managing this.
It is a global responsibility atthat point.
Adam Larson (24:31):
Mhmm. Well, I it like goes back to what you said
earlier, think globally but actlocally, because wherever you
that local thing is, you need tounderstand where those
regulations are and how thataffects the organization there
and how it rolls up ultimatelyto the organization.
AlissA Vickery (24:45):
Absolutely. Absolutely. Well,
Adam Larson (24:49):
Alyssa, this has been a wonderful conversation. I
really appreciate you comingback on our podcast, and I look
forward to having you again.
AlissA Vickery (24:55):
Alright. Thank you so much. It's been fun.
Announcer (24:59):
This has been Count Me In, IMA's podcast, providing
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at www.imanet.org.
Welcome back for another episode of Count Me In.
Today, we're excited to welcomeback Alyssa Vickery, the chief
accounting officer at Corpay fora third appearance. Having
shared her insights onleadership and CFO roles in the
past, Alyssa now delves into theESG reporting challenges brought
by the new SEC rules oncorporate sustainability. With
her extensive experience andrecent articles on this topic,
(00:42):
she discusses the pressing needfor companies to prepare for the
diverse reporting requirementsacross various jurisdictions.
Alyssa emphasizes thesignificance of embedding ESG
principles into the corestrategy of an organization
beyond mere compliance.
Whether you're navigating ESGfor the first time or refining
your current approach, Alyssa'sinsights are invaluable. Join us
(01:03):
to explore how to effectivelymanage reporting by thinking
globally and acting locally.Tune in now for this insightful
conversation. Well, Alyssa,we're really excited to have you
back on Count Me In. This willbe your third time on our
podcast.
We've talked about leadership.We've talked about you jumping
(01:23):
into a CFO role temporarily andwhat that looks like. And today
we're going to be talking aboutESG reporting challenges and
operations, which you and yourteam have been working real hard
and you've been writing articlesabout it. And so I am really
excited to kind of jump in andhave this be our topic today. So
SEC ruling has new rules on ESGreporting.
It's brought a lot of attentionto corporate sustainability.
(01:46):
What are your some of thebiggest challenges that finance
teams are facing as they preparefor these new requirements?
AlissA Vickery (01:51):
Yeah, I mean, I would say, depending on the size
of the company, they're quiteextensive. And maybe just a
level set for the audience. Youknow, what the standards say
today, and what we're personallydealing with at Corpay. You
know, the SEC did come out witha set of rules back in March of
I think that's '24 now. Andthose rules quite frankly got a
lot of people moving, includingus.
(02:12):
But shortly after the rules cameout by the SEC, they were
quickly stayed by the SEC due tosome court proceedings
challenging certain of therulings, the the
constitutionality, all all thethings. And so while the SEC
went on pause, the rest of theworld did not, which I think is
the most important takeaway. Soregardless of when The US
(02:33):
regulatory environment catchesup from a I'll call it the
federal level, from a Europeanstandard, from a Brazilian
standard, potentially even froma California standard, companies
really do need to start thinkingabout where they may have
reporting requirements. Andthose reporting requirements are
coming up fast. And so, youknow, organizationally, as you
start thinking about the kindsof data that's being requested,
(02:57):
to be reported, what we've doneis we've we've viewed it from,
I'll call it, the most detailedbubble of governance that might
exist today in terms of whatthat reg looks like.
And for us, that's the CSRDstandards that are pervasive
throughout Europe. Thosestandards have somewhere along
the lines of 1,400 differentrule sets that you then have to
(03:19):
go evaluate and figure outwhat's relevant. And after you
figure out what's relevant, thenyou have to determine, alright,
I I think I need to talk aboutthis topic, but what's material
to speak about within the topic?Now, upon how your organization
is managed and is organized, youmay be doing that every time you
close the books by jurisdiction.And so for for us, that means,
(03:42):
hey, I've got about five or sixcore locations globally where I
close books.
Within those six locations, Iprobably have over 200 legal
entities. Now what? And sothat's where the challenge
really comes in, and figuringout what matters, what you're
required to report, what you mayeventually have to report, maybe
(04:06):
not today, but maybe four yearsfrom now. What makes the most
sense for your company today?Are you going to take the
partial bite of the pie?
Or you just gonna go ahead andeat the whole thing knowing
eventually you're going to haveto anyway?
Adam Larson (04:19):
So is that like a from a company company
perspective, looking at takingthe whole pie versus piece by
piece? Because some people mightnot be able to dump in and do it
all at once, and the piecemealworks. But is there is there a a
one way that works betterdepending what industry you're
in?
AlissA Vickery (04:33):
I'm not sure it that you get to think of it that
way, unfortunately. I think youhave to go and perform what's
called the double materialitytest. So under under the
European standards, there's acouple of ways to view it. But
the first and foremost is youperform what's called double
materiality at the top of thehouse. That double materiality
takes into account impact andvulnerability across the
(04:53):
entirety of the organization.
And then based on, I will callit, true quantitative
thresholds, starts to definewhat you have to do. And so, for
a company, they may have arequirement at a legal entity
level if they breach the assetsand the number of employees
test. If you don't breach thosetests at the individual legal
(05:15):
entity level, then you start toroll up. And so for us, it's
it's coming down to, alright, amI going to report based on my
European parent? Or am I gonnajust report based on the very
top of the house consolidated?
And so, I'm not sure if there'sCertainly less is easier, just
(05:37):
in the context of going andexecuting. But it could be
depending upon the size of theorganization. Again, how it's
organized. Yeah. How the officesare even set up.
Because if you start thinkingabout greenhouse gas greenhouse
gas emissions, well, arefundamentally, at least for,
I'll call it, non manufacturingtype companies, they're they're
(05:58):
being generated by your employeebase. By your employee base as
they show up in the office, asthey work remote, as they drive
their vehicles, as they travelfor work. Say, if you're flying
internationally versus flyingdomestically, whether
domestically means withinGermany or if it means, you
know, within The United States,you are emitting those
greenhouse gases, and how do youmeasure them? And then how
(06:21):
ultimately do you report them ona consistent basis globally,
potentially?
Adam Larson (06:28):
Talk about overwhelming. That just feels
overwhelming. Just youdescribing that, I'm like, oh my
goodness. How does somebody likestart, like, get started? Like,
okay, I wanna
AlissA Vickery (06:36):
Yes. I would say the first thing we did was try
to get educated. So there areclearly experts in the field.
You know, the the accountingfirms make a living off of,
trying to assess what mattersand what's coming up next in the
industry. But frankly, you know,getting in front of those
experts, helping Yeah.
Understanding what the landscapeof regulatory framework looks
like. Educating your leadershiparound you, educating your board
(07:00):
who may have oversightresponsibility for something
that they're not even aware ofjust yet. Figuring out where in
the organization it might lie,and then having the
understanding that even from,like, my seat where I the reason
I've taken it on from aleadership perspective is I know
that ultimately, those outputsare likely to have to be
audited. Mhmm. And if I'mleading the efforts for managing
(07:22):
the relationship with myexternal auditor, then I wanna
make sure that that data iscollected, analyzed, calculated,
reported in a consistent manner,regardless of which entities
we're talking about.
So that ultimately, what theauditors would then try to opine
on, at least to have someconfidence it was rolled up in a
manner no different than perhapsthe quality with which I closed
(07:45):
the books from a financialreporting perspective. Beyond
that, it's learning who yourpeers within your organization
are, who need to be keystakeholders. Mhmm. And so, in
most organizations, this isgonna be sustainability
officers. It's going to beinvestor relations, potentially,
or PR.
(08:05):
Because there is a bit of ahere's how we think about it as
an organization and how we speakto it outside of our
organization perspective. Thereis a regulatory and legal
compliance to it. So my generalcounsel is very engaged and
involved. But it can't just bethose individuals who sit at the
corporate level. It has to bedisseminated within the
organization.
(08:25):
Again, back to how are youorganizationally structured and
how do you then force the peoplewithin the layers where it
actually is a European reg, nota US reg that I'm trying to help
manage. I need to ensure thatthose individuals have it on
their radar, and it's somethingthat they care about, and
something that they understandhow they're gonna go and execute
(08:46):
on. So the term we've coinedinternally, and perhaps it's not
unique to us, but is thinkglobally, but act locally. And
if you can act locally, you havethe ability to create buy in at
the level at which all the datawould need to be reported and
collected. And thenfundamentally, you may be able
(09:07):
to have controls around thatdata so that when it comes up
and it actually is reportedconsolidated, you've got a
quality output.
Adam Larson (09:16):
Yeah. That's I mean, because it's audit,
because it will be audited,because of all that stuff
coming, it makes a lot of sensefor somebody from the finance
team to lead that. But as I'vetalked to others about, you
know, this type of a topic, theyall say the same thing where you
need a wide ranging group ofstakeholders from the
organization to create that buyin. But also it helps to become
(09:37):
a genuine part of your strategyas an organization, because it's
not just about reporting rules.Let's get all those reports good
and we're good to go.
It has to be more than that.Right?
AlissA Vickery (09:45):
A %. I mean, it has to be, I'll call it legally
accurate for for one. You can'tjust go out there and just say
something for the sake ofchecking a box. Yeah. It has to
be truly part of who you are andwho your corporate vision.
But I think ultimately, it thenhelps to permeate the culture.
If this is something thatinvestors, something that the
shareholder public, or thatconsumers and regulators are
(10:09):
concerned about, then it must besomething that we take very
seriously as well, and thatwe're concerned about. And it's
not so to say that it's notsomething that was on our radar,
but you just were never in a ina situation or in a requirement
to report on it historically. Itjust puts a different kind of
line of sight into that data,the importance of the data, and
(10:30):
the right individuals who arepart of the process to collect
ensure the quality.
Adam Larson (10:37):
So you were saying earlier that, you know, Brazil,
Europe, maybe even California,and eventually maybe the SEC,
and who knows wherever else yourorganization works, what is it
like kind of having to deal withthose different rule sets within
your organization?
AlissA Vickery (10:51):
Right. So I would say it's quite
challenging, as you might Ithink that the one nice thing
about it though, at this pointin the- in the process is there
does seem to be a meaningfulamount of overlap. So, I think
one of the things, perhaps, thecorporate community is hopeful
for, especially those of us whodo business in multiple
jurisdictions- Mhmm. Is thatthere will be a rationalization
(11:13):
and an and an alignment of thevarious standards. Because there
are multiple standards underwhich each of the regs have been
written or intended to complywith.
Yeah. Which you wouldn't thinkwould be all that different. And
I think it does depend onindustry how different they are.
But creating alignment, creatinga bit of a mapping as well,
(11:35):
which is something that we'reworking on with with some third
party vendors to ensure as we goto comply in Brazil, where I
have to report locally, ifthey're going to go through the
process to gather the data toenable them to report on a
standalone basis for the countryof Brazil, well, in theory, I
should be able to leverage thatsame information for purposes of
my European report. Because ofmy structure, ironically, Brazil
(11:59):
will be included as part of myEuropean top of the house.
And so, similarly forCalifornia, their scope is much
more narrow. It's it's primarilyfocused on greenhouse gas
emissions. So scope one, two,and three. Those definitions
tend to be far more explicit,and so a little less
interpretation. But time willtell as regulators start to
(12:20):
actually ingest the informationthat's reported as to how much
alignment really exists.
And I think that's when it getsa little tricky. Because what
you think might be enough, andprobably is enough depending
upon where we're doing business,it ultimately may not be exactly
what California was looking for.Right? And so, it it creates a
little bit of a challenge in ourability to just kinda keep up,
(12:42):
you will.
Adam Larson (12:43):
Yeah. So with all those different changing
regulations and things, youknow, having to stay on top of
that, have you guys been able touse different technologies and
data analytics to kinda play arole in kind of enhancing this
process? Because I'm sure thatit's you're not all sitting
there with a notebook. Well,California changed. Let's write
it down in our our banker'snotebook.
AlissA Vickery (13:01):
Right. So I think there are a number of
tools out there to helpcompanies to help manage the
process. We've selected a vendorthat we've done a lot of
business with in the past,around sort of our Sarbanes
Oxley and SEC compliance. Okay.So that we use this this,
solution that's developed byWorkiva.
And we've basically bolted on amodule. And we've done that
(13:22):
purposefully, because one, thereis global understanding how to
use the tool.
Adam Larson (13:26):
Mhmm.
AlissA Vickery (13:28):
The tool has been developed in the module
specifically by the vendor tobasically manage the disparate
work streams that wouldinherently be required to be
able to gather the data. Not toodissimilar from how you might
structure a global ERP, to wherefundamentally, I'll have my rule
set. I'll have mapped that intothe underlying standards. So,
(13:54):
that that apply within Europe,that apply in Brazil. But then
ultimately, as I create workflowand assign, hey, I need your
greenhouse scope one greenhousegas emissions generated by coal.
We don't actually have coalproducts, but it's it's a really
nice, like, visual example. Soeverybody who would report that
(14:14):
on a stand alone basis wouldreceive some workflow
management, an email notifyingthem time to submit your data,
and they would submit it upthrough the tool. I can see it
sort of in a, I'll call it, ourline of business level or a
legal entity level to thenultimately roll it up. And so I
I do think having things sit insort of electronic frameworks
(14:37):
that are sort of built to helpmanage the data is super
helpful. No no different than Iwould say from closing the
books, and reporting revenue andfinancial results.
Having something that helpsfacilitate that is meaningful
and useful. There will also be arequirement, if you're doing
business in Europe, to documentyour double materiality
assessment. And that'll be anannual assessment that companies
(14:59):
have to go through. The firsttime is always the most
difficult because you're tryingto figure out what you care
about. Mhmm.
Once you figure it out the thatthat first round, you probably
have some refinement at theedges that occurs over the
following years. But having itin one place, and for us, having
it all in the same place as weultimately collect and report
(15:20):
and record
Adam Larson (15:21):
Yeah.
AlissA Vickery (15:21):
I think will will become an advantage an
advantageous approach to thework because I can direct my
auditors to the same tool toexecute all their procedures
from.
Adam Larson (15:34):
Yeah. Wow. That that definitely simplifies the
process, but it sounds likethere's a lot of legwork to do
to get it to that point whereyou're you can do that.
AlissA Vickery (15:42):
Right. Unfortunately. And I would say,
you know, my team, we are a bitof a SME in the organization
when it comes to use of theWorkiva platforms, but it it
does require some third partyassistance for sure. Some real
project management and planning.We've we've opted to utilize a
third party vendor to assist us.
So, we've hired them on aconsultative basis. They have
(16:03):
extensive experience andknowledge helping other clients.
Adam Larson (16:06):
Yeah.
AlissA Vickery (16:07):
Not just in our industry, but, you know, just
within within the environment toadopt the standards, perform
double materiality assessments,and ultimately help them define
sort of the rules that are themost relevant material. And then
ultimately identify the gaps inthe process that they may then
may then need to go work andclose as an organization before
(16:28):
they can effectively get to thereporting phase.
Adam Larson (16:32):
Have you seen that this ESG reporting, these new
reports, have you seen itinfluencing like the risk
management strategy of theorganization as you've been
going through that with thecompany?
AlissA Vickery (16:41):
I would say only on the- on the edges at this
point.
Adam Larson (16:44):
Okay.
AlissA Vickery (16:45):
Again, because we're not in that manufacturing
space
Adam Larson (16:48):
Yeah.
AlissA Vickery (16:49):
Typically, I would call it the whole ESG
framework isn't somethingspecifically the e side Yeah.
Which seems to be the thing thatcreates the most incremental
work for companies. It's notsomething that we've been hyper
focused on. Do we have healthhealth and safety? Yes.
Do we have recycling programs?Yes. Do we have people first
programs and resource groups forour employee base and engagement
(17:11):
service? Yes. We have all ofthat stuff.
We just have never sort ofpacketed it up in a way that was
more aligned with sort of wherethese standards are headed.
Mhmm. And so so from a riskmanagement strategy perspective,
yes, it it is in there. It'ssomething we're talking about at
the, the the highest levels ofthe organization. But today, it
(17:32):
is still a little bit on thefringe as a supplement to the
broader corporate sustainabilityreporting that that we've
historically put out there forthe broader market.
Adam Larson (17:41):
Yeah. I I found that as I talk to folks in
different industries, certainindustries are very hyper
focused on aspects of it becauseit affects many aspects of their
business, especially thetrucking companies,
manufacturing companies, they'resuper in there, but you know, if
you, if you have a softwarebusiness, you don't necessarily
have to worry about like, okay,like what about my servers,
things like that, but there'snot a lot of other aspects of it
(18:04):
that really affect them and it'skind of hard to find that
balance, I
AlissA Vickery (18:07):
feel Right. And I think that's fundamentally why
the whole, is it relevant? Yes.Is it material? Maybe.
Assessment comes into play. Andso really being thoughtful about
who you are as an organization.What is meaningful to a reader?
What is meaningful to aregulator? More to come on that,
I am sure.
But you're trying to makejudgment calls based on how we
(18:27):
understand our our valueproposition works. But
ultimately, I think it'sfiguring out it's not so hard to
figure out what you do as an organd your third party partners,
like in terms of infrastructure,like you said. I think it's that
value chain proposition. So thatwhen you get to scope three,
that's when it becomes a littlemore challenging because you do
(18:48):
have to make judgment calls anddraw the line somewhere Mhmm.
Because that picks up onsomebody else's process.
Adam Larson (18:55):
Can you just describe what scope three is?
Because I've people mention it alot, and other times, they don't
always what is that? What is thescope three as part of the
process? So
AlissA Vickery (19:03):
scope three is sort of it's beyond your direct
and indirect greenhouse gasemissions. It's it's sort of
what does your value chain alsoproduce in terms of GHG? And
that that can mean a lot ofdifferent things. So, hey, I
have a card and it has a chip,and then that chip is then
manufactured by a third party tomy card manufacturer. So how far
(19:27):
down the value chain do you go?
How far back do you collectthose greenhouse gas emissions
to ultimately then report upon?That's way more difficult to
analyze than how much energy didmy facility in London use.
Adam Larson (19:42):
Yeah. I can imagine that that would get pretty nitty
gritty depending on howcomplicated like, if you're man
in the manufacturing business,that would get really
complicated.
AlissA Vickery (19:50):
Absolutely. Absolutely. Because the number
of inputs I mean, in theory, alot of companies are not
vertically integrated. And so tothe extent they're using
partially manufactured productsto then build their own product,
it can become cumbersome in ahurry.
Adam Larson (20:07):
Yeah. What did that look like when when you were
kind of digging into thisprocess? You know, you've
mentioned that, you know, youguys brought in a third party.
What did that look like from aas you kind of readjusted your
team to kind of focus on this?
AlissA Vickery (20:22):
So I would say, you know, unfortunately, we
utilize a lot of the sameresources who do have day jobs.
We haven't necessarily had theability or the need at yet to go
and hire somebody who's fullydedicated to this. Gotcha. So I
think hiring a third party tohelp lead us along the path was
(20:43):
certainly instrumental in notmaking any broader hiring
decisions just yet.
Adam Larson (20:48):
Yeah.
AlissA Vickery (20:48):
We have brought in some sustainability
thoughtware in the form oftemporary resources to assist
us. Mhmm. But for now, we arestill in implementation phase.
We turned on the tool. Westarted doing our assessment.
We have an idea of what optionslie in front of us. We've
started going down the relevantand material route. What we
(21:11):
haven't done is started actuallygoing to the business and
saying, start collecting it. Sojust to give you a sense of sort
of where we are in Yeah. In theprocess.
Adam Larson (21:22):
So you're you're real fresh from, just just
getting going and trying tofigure all those things out.
AlissA Vickery (21:27):
Very much so. I I would say we are more than up
to speed and getting highlyeducated at this point. And so
the the next step is quitefrankly gonna be the hard one.
Adam Larson (21:37):
Yeah. It's
AlissA Vickery (21:37):
let's go measure. Let's go gather. Let's
go collect. Let's go write downwhat our corporate governance is
around these topics.
Adam Larson (21:46):
Mhmm.
AlissA Vickery (21:47):
And while it exists, I would say, in a
skeletal form, it doesn't existin the level of detail that is
necessary to comply with thestandards that that appear to be
relevant to us.
Adam Larson (21:58):
Yeah. And I suppose that's the nice thing about the
way you guys started, whereyou're like, you you saw the
regulations coming, you're like,Hey, let's get on this, because
if you wait to the last minute,you don't have the time that
you're having to kind of refinethings and try it out as you go.
AlissA Vickery (22:11):
No, I think that's a % right. I think we do
have a little bit of thecourtesy of the time. I would
say, it does appear that we havereporting requirements for 2025.
The good news is, I don't haveto report until probably summer
of twenty six.
Adam Larson (22:27):
Yeah.
AlissA Vickery (22:27):
So I I do have a little bit of, I'll call it, you
know, the backward look that I'mgoing to be able to do. And I
have the ability to takeadvantage of the calendar on.
But it is a lot of data, and weare a large company. And so, I'm
glad we got started. Because ifif you don't start, it would get
very difficult when you getclose to those deadlines to feel
(22:48):
confident in ultimately whatyou're going to report.
Adam Larson (22:50):
Well, and it's great too that you have the
technology in place because Iimagine, with their platform
putting things in, they havedifferent ways to to know which
regulations you're going for,which will help with the
reporting and knowing whatyou're missing, knowing what's
in there, and being able toconnect with folks.
AlissA Vickery (23:04):
A %. I mean, having trusted vendors who-
Yeah. You know how to use theirtools, and they continue to
build functionality that ishighly scalable and ratable
throughout your organization.Yeah. It is extremely helpful in
terms of this adoption.
Adam Larson (23:23):
So, I mean, the future is up in the air. You
know, many regulatory changesobviously happening with the
recent presidential election inThe US and, you know, all the
different ups and downs goingon. But the rest of the world
doesn't see the rest of theworld is definitely going this
direction. Who knows where TheUS is gonna go? You know, what
do you think the future holds asfinance leaders are trying to
(23:44):
navigate these waters,especially for multinational
organizations?
AlissA Vickery (23:48):
Yeah. I mean, I would say it does seem to be a
bit of a wave, and we're ridingit, and this is the first wave.
Yeah. It seems like the moreplaces you do business, the more
places you are likely to have toreport something.
Adam Larson (24:03):
Yeah.
AlissA Vickery (24:04):
And as we look around the globe, we know it's
not just limited to the handfulthat we've that we've mentioned
on this podcast so far. We knowthat that Canada has some
version of standards. Mexicodoes. New Zealand and Australia.
And so, you know, it it reallydoes create a bit of a a rolling
snowball, if you will, to whereyou have more people or more
(24:24):
regulators vest vested inunderstanding how companies are
managing this.
It is a global responsibility atthat point.
Adam Larson (24:31):
Mhmm. Well, I it like goes back to what you said
earlier, think globally but actlocally, because wherever you
that local thing is, you need tounderstand where those
regulations are and how thataffects the organization there
and how it rolls up ultimatelyto the organization.
AlissA Vickery (24:45):
Absolutely. Absolutely. Well,
Adam Larson (24:49):
Alyssa, this has been a wonderful conversation. I
really appreciate you comingback on our podcast, and I look
forward to having you again.
AlissA Vickery (24:55):
Alright. Thank you so much. It's been fun.
Announcer (24:59):
This has been Count Me In, IMA's podcast, providing
you with the latest perspectivesof thought leaders from the
accounting and financeprofession. If you like what you
heard and you'd like to becounted in for more relevant
accounting and financeeducation, visit IMA's website
at www.imanet.org.
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