Restatement Is a Dirty Word, Except When It Isn't

Speaker A: In financial. In financial accounting, right? Restatement is a word that people try to avoid.

Speaker B: It's a dirty word.

Speaker A: It's a dirty word. Exactly. You know, but in sustainability reporting, actually sometimes think about it, it's actually good to do restatement.

Speaker C: Welcome to the Preread.

Speaker D: Just like the slides you get before a big meeting, the pre Read prepares you, CFOs and other executives for the next big thing. It's the global podcast where finance, sustainability, audit and risk teams come together in the C suite.

Speaker C: If you're making decisions at scale or need to understand the leaders who are, you're in the right place. This is the pre read brought to you by Workiva.

Speaker D: Uh, I'm Steve Soder, accounting enthusiast and Diet Coke aficionado.

Speaker C: And I'm Alyssa Zucker, sustainability nerd and equal opportunist, caffeine addict.

Speaker D: Today we have two guests who represent two sides of the same problem. Later in the episode, we'll hear from Jonathan Gregory, the global controller at the Hershey company. But first, Alyssa, you recently were in Singapore and sat down with Dr. Lee Hui Min, who has spent 25 years leading sustainability across conservation, retail, and now Singtel, one of Asia's largest telco groups. So, Alyssa, uh, what did you talk about?

Speaker C: Dr. Lee lays out the conceptual foundation. What sustainability data actually is and and what it isn't. And why the finance playbook doesn't map directly to it.

Speaker B: A couple of key takeaways from our talk.

Speaker C: The first, precision is actually the wrong standard for sustainability data because a 42.6 versus a 43 ton emission figure doesn't change the material reality. Sustainability audits are about spotting hotspots and preventing greenwashing, not about achieving decimal point level accuracy. Finance leaders absorbing ESG functions need to recalibrate what good data means. The second, and to Steve's earlier point, restatement in sustainability is a feature, not a failure. When financial teams see a restatement, they assume that something went wrong. When sustainability teams restate it, it often means that they've improved their methodology or accessed higher quality data. That's progress, not a mistake, and the market should read it that way. And third, scope three, visibility breaks down fast as you go deep into the supply chain. By tier 2, many suppliers are SMEs with no infrastructure to provide emissions data. Dr. Lee's guidance proxy. Where you must engage where you can and keep investing to get closer to

Speaker B: real data over time.

Speaker D: Well, Alyssa, uh, if only a restatement meant progress. But in the meantime, let's get to hear your interview with Dr. Li.

Speaker B: Dr. Lee, you've led sustainability across conservation, retail and now one of Asia's largest telco groups. Each one of those environments has a completely different relationship with data rigor. And so what does that journey tell you about why the sustainability data quality problem is so challenging to solve?

Speaker A: I think to begin with, right, um, when we talk about sustainability data we are really looking at, we're really looking at a lot of data that's coming from operations, right. As you can see that in my past jobs, a lot of the real economy data, it really comes through, through the day to day operations of the company. And depending on what sector you're in, depending on where uh, you are at, the data not necessarily does come into form and shape that you like, right? Hence I think that really the data quality challenge comes from the fact that how do you identify what data to collect, how do you identify the way of collecting, for collecting that data, um, so that um, you can make sure that data is captured, digitized and ready for storage in a structured manner that helps you ladder up to the greater sustaining matrix that you're looking at. Mhm. So I think that really adds that um, single threat that I do see very common in all the different um, job that I have been to. The other challenge also has to do with legacy systems and uh, legacy practices. Let's not forget that the digitalization journey, especially in Singapore, it happens pretty rapidly in the last three decades. So if you have anything that is built before the last three decades, likely you're not going to find anything that's in digital form. If they're in physical form, yes, we can digitize it, but you might not even find anything in physical form as well. I do expect that as we continue to develop and things increasingly get more digitized from the onset, that problem will sort of get alleviated. Mhm.

Speaker B: It makes me think of the conversation we were having before about the distinction between sustainability data and financial data. Because sustainability data, you know, you can use an example of the technician filling the refrigerant in your H vac system or if there's a record, it could be in such a disparate place like nowhere integrated into the corporate workflow of data management. And so kind of integrating sustainability into those core workflows as you digitize is a real, it sounds like a real transformation of especially this, where the Singapore market might be today.

Speaker A: And actually if you think about it, a lot of data, refrigerant data for example, right? They get top up and uh, sometimes they get consolidated and Only comes to you in an invoice from a supplier. Right. If you use the same supplier. And how do you make sense of that when you don't actually know where it's being put? We can take that data, but if you really want to sort of um, pinpoint and look deeper analysis to look at actually which area is using more, do we need to think about improvement, reduce our emissions?

Speaker B: So finance teams have had decades of process around data integrity. Right. So they've got period closes and controls and audit trails. That's so foundational to the discipline of what they're doing. And sustainability teams are being asked to kind of follow a similar standard now. So from your experience, what's the hardest thing about transitioning the sustainability function into that kind of mindset and process?

Speaker A: I think uh, again fundamentally the two differences, financial audit happens for a reason and the requirement of financial audit versus the reason of why we do a sustainability audit. They are a little bit different. Um, financial audit, you really talk about the integrity of the data. It has to be precise and people want it to know how it lands. Um, and there is a certain process that you follow which is very well established in the last 20, 30 years. Right. Now on the other hand in sustainability audit we don't while we do sustain audit for integrity, but the integrity, the preciseness of integrity is not to the point. 42.6 ton, uh, of emission uh, versus uh, you know, 44, 44 for that matter. 43. Right. It doesn't really matter because they're in the same ballpark and anyway all emissions are in estimate. Right. When we do sustainable audit really is to find out uh, where's the material issue are the hotspots as well as to make sure that there is no greenwashing. There is proof points that when we report this number there's a reason, there's a logic to that and it comes down to really reflects uh, the real happening that the emission is incurred in this tool form. If you're expecting sustainability data to be so precise 41.2 to 41.3, you want to solve that 0.2. It's almost impossible to be honest. Um, whereas you get 10 to 1 to balance it.

Speaker C: Right.

Speaker A: So I think um, the challenge is really how to get each other, um, the finance team and the sustainability team think about the other issues and then somehow slowly we come to a landing on this is how sustainability data auditing should look like. Back to my point about payment. Whether or not a customer pay me doesn't change the fact that I'm going to. If my methodology says that this is where I'll apportion my images to the customer. Whether my customer pay me or not doesn't really change the way I decide.

Speaker E: Mhm.

Speaker A: That it has to be there. Right. Of course. Not forgetting that we should all strive to improve the data rigor, make sure the accuracy is there.

Speaker E: Mhm.

Speaker A: But I don't think we will ever get to a point where there are really totally the same because they're off different. The other point I want to talk about this is I think in financial, in financial accounting, right. Restatement is a word that people try to avoid.

Speaker B: It's a dirty word.

Speaker A: It's a dirty word. Exactly. You know, but in sustainability reporting actually sometimes think about it. It's actually good to do restatement because it's very nascent, it's very new and we find better ways as we all continue for. Take category one for example. As we continue to move from spend based to supplier specific to activity based, you are really looking at uh, improving the accounting process to delink it from spending.

Speaker E: Mhm.

Speaker A: Uh. And to the real activity which is more representative, what's really happening. And hence the ability to manage the emissions. If you have the ability to have activity data this year you wouldn't use spend based. But it's because we don't have. You need time to build and by the time you have it, it's actually not a bad thing to actually reinstate to more representative. Right. And it helps the entire market to learn, industry to learn. So misstatement and sustainability happen very often. Mhm. And that's probably something that the people in the financial sector can't really appreciate who they are. So that in itself is also something that we need to reconcile.

Speaker B: I've spoken to so many peers about this because exactly to your point, when it comes to financial reporting and accounting, you will do anything to avoid a restatement because it kind of demonstrates you messed up like you made a mistake. Right. But sustainability is in such a different place where the accounting system is literally the accounting system is evolving. The methodology that you use within that accounting system changes over time as you get access to better data. And restatement I think actually is a signal to market that you're investing in this exercise to make it more decision useful to make it more relevant to your business.

Speaker A: Yes. And there's also the effort, you know, sometimes people tend to. We've ever gotten comments about oh, you're just improving your scope three by doing accounting tricks. But I explained to people to say that look, the process of us investing resources and effort to look at improving the emissions factor, look at uh, getting better quality emissions factor in itself is an investment by the company too.

Speaker B: Absolutely. Well, so you've mentioned scope three and I know your background is in circular, what we call today circular economy. Um so as kind of circular economy and also as a supply chain, um, this work has always been so central to your background. And now that we have the scope 3 and climate related disclosures under regulatory scrutiny, how are organizations to report on what's actually happening in their supply chains to this point on almost waiting for your suppliers to be able to provide that product carbon footprint and what's still getting in the way of them being able to do that.

Speaker A: I think the bigger issue is sometimes it's not for the lack of willingness. Again coming back to a lot of um, if you think about it, the supply chain is not usually one tier. Our supply chain is usually multi tier.

Speaker E: Right.

Speaker A: Um, when we buy something from let's for example Singtel make our own routers. Right. We uh, have Singtel branded routers. Um, in a router you imagine my manufacturer does the manufacturing of the router but he in turn would have just with a supplier.

Speaker E: Right.

Speaker A: Their sub supplier would then give, sells them m the plastic, sells them the component, the component parts and etc. So I think the challenge has always been um, the traceability and visibility down the chain. And you sometimes realize that when you get down to tier three, tier two. I wouldn't even go to tier three and get down to just tier two. Um, the company can already be quite a SME, right? Mhm. And the SME, uh, who needs to, who might not have the necessary environment or setup to provide that data or even understanding what we're trying to get for so the product footprint part of things, I think it has to be that. And then um, the next thing is if we can't, if we can't then we just really have to do our best of ability. Proxy it.

Speaker E: Mhm.

Speaker A: And then hopefully over time you get real data.

Speaker B: Yep.

Speaker A: Uh yeah.

Speaker B: It's almost like don't let perfect be the enemy of good.

Speaker A: Totally. Ah.

Speaker B: Engage where you can, get the data where you can. And that's the value of look, that's why they call it proxy information. It's a proxy, it's meant to be representative. Yes, yep.

Speaker E: Yes.

Speaker B: Leading um, net zero work across a multi country, you know very large telco group is an enormous data challenge. And we spoke about this before with the digitization of Data. But what do you think of collection and normalization and verification across all the different business units and all the different markets? So from your perspective, where is technology really helping your team to manage that? And then where frankly, are you still doing this the hard way or the old school way?

Speaker A: Um, I say with a bit of mix we do have a system but the system is pretty dated, uh, which I use as much as we can and probably some of the functions are not as good for now. But M, nonetheless we still continue I think um, I have to say that largely still manual, but we improve along the way in the sense that um, Excel has a lot of function. Let me put it this way. I think we have really graduated from a simple Excel sheet to advanced Excel sheets.

Speaker F: Right?

Speaker B: Yeah, yeah. There's this narrative around sustainability reporting shifting from a compliance burden to a strategic asset. Right. From this like back office obligation to a board level and market signal. Do you believe that shift is actually happening inside of most organizations or does

Speaker C: that sound more aspirational compared to what you're seeing in practice?

Speaker A: I think. Okay, so I actually think uh, it depends on how you see it. Right. I've been in sustainable for 25 years. Right. Way back you get a few companies who are really progressive, the likes of Patagonia, Ikea who are really progressive. You look into it and then you start doing something about it. From the fact that I can differentiate myself and there is, there is a premium that you talk about. So you actually do development and you actually do. And that, that honestly was what I was doing 20 years ago. So I came from seeing sustainability and trying to sell sustainability as a competitive edge. Mhm. It wasn't a compliance function that I started in. Right. At that point in time it was really totally voluntary. Depending on companies, if the company progressive thinks about it, then they get doing it. So you see that in a way there's a bit of a self selection. People who wants to get in the sustainability at that point in time are people who really think about it, believe in it, wants to do something. So you see that's from a value creation, a strategic. M sees it as a strategic asset. Now I think fast forward to today. Um, the good thing, it's sort of democratized, right? Everyone there's a lot more companies are being partly forced to do it because of compliance. So when there's compliance, well, people have to do it because there's compliance.

Speaker B: Right.

Speaker A: Then um, as with everything compliance people are not happy. Then that gets going. But if we think that indeed yes, it's Sort of seen as moving back as a, uh, compliance thing, but it's compliance to many, many companies, to the entire industry. Right. Uh, so if you think about the collective impact, uh, yes, not the best thing to say that it's compliance, meaning in people's mind, but is compliance in many, many more people's mind. I hope that this compliance will eventually evolve and people understand it a bit more into again, a strategic, a strategic function for a lot of companies. And I think if you track some of the very successful company in sustainability, Right. You would see that, um, sustainability department moved. Hopefully everyone at some point in time or every company eventually reached this point where they see that it has to be part of the DNA, has to be a strategic consideration and it sits higher up within the entire organization.

Speaker B: Yeah, I think, and what I hear you saying, and I agree, is that there's a little bit of like, on the entity specific basis, maybe a little bit frankly of a pullback in terms of what used to be a strategic ambition is now more of this compliance mandate and, uh, just focusing on like making sure you're doing the thing that the compliance is requiring. But then when you think about that across the market, uh, directionally the market is shifting. Right. Even if like an individual company, a leader might be coming back, the market is shifting. And then of course, once the market shifts and you have more companies doing it, that exposure actually become, you know, giving them exposure to the strategic advantage. And then, so then you get back into the strategic advantage part. And so I'm not quite sure what that looks like, if it's an infinity sign, but there's some kind of cyclical kind of process there in terms of how a compliance requirement can move the market despite it maybe bringing everybody more towards the center, quite frankly.

Speaker A: Ah, I do agree with you. I, uh, don't think that's not, not happening. I think that's true. But hopefully as sustainability professionals, I think there's an inert optimism in every one of us, uh, because we see, we probably see, um, one of the most pessimistic things of, you know, that's happening. But we tell ourselves, oh, we can do something about it. Hence we are all still on this journey, right?

Speaker B: Yep. Well, we just know it's common sense, it's business sense and everybody else is going to wake up to that, you know, sooner or later. We wish it was sooner, but I think we all have, have confidence it's going to happen.

Speaker C: That's Dr. Li Huyimian, sustainability leader at Singtel, making the case that sustainability data Operates fundamentally differently than the rules of financial data. Precision is the wrong standard, restatement is a feature, and the supply chain visibility you're counting on stops somewhere around tier 2.

Speaker D: So now the question is, what does a controller do with all of that? Because the ESG function is landing on financ teams right now, whether they asked for it or not.

Speaker C: Up next, Jonathan Gregory, global controller at the Hershey Company. Steve, you met with Jonathan in New York and talked about what it looks like to absorb that responsibility inside a, uh, complex multi acquisition Fortune 500 CPG company while also staying ahead of AI governance, regulatory change and everything else that's on the controller's plate in 2026.

Speaker D: Alyssa it was a wide ranging talk, but what really stood out to me when talking to Jonathan is that the productivity shift in controllership is already underway and has been for a long time. But governance has to keep pace. Jonathan cautions that AI needs the same segregation of duties, for example, and access controls that you'd apply to any physical asset. Second, regulatory change is the new constant for controllers. From the disaggregated income statement, expense accounting standard updates to tariff complexity to ESG reporting requirements and regulations. The pace of compliance change isn't slowing down. Stay ahead of the landscape and shifting the workforce to higher value work as automation creates that space.

Speaker C: And here's Steve's chat with Jonathan.

Speaker F: We are here with Jonathan Gregory, corporate controller of the Hershey company. Is that right?

Speaker E: Global Controller. Global Controller, yes.

Speaker F: I love it. Now that's a relatively new role. Uh, tell us about it.

Speaker E: Yeah, so transition from being just the corporate controller to global controller about a year ago. Um, so I got a couple different things under my umbrella of responsibility. Still reporting to our chief accounting officer, but mainly focused on all things external reporting, technical accounting. I have corporate accounting. So in theory, like our consolidations team, um, at, you know, based out of Hershey, uh, which takes everything globally and consolidates it into our final consolidated packet. I have an ESG controller who also oversees legal entity accounting. So we got a whole wide range of responsibilities underneath, um, our little team. Yeah, well a lot. Small but mighty m a lot of control.

Speaker F: So the remit has gotten bigger.

Speaker E: It has.

Speaker F: But you've been at the Hershey company for like 10 years now, right?

Speaker E: Slightly over 10 years.

Speaker F: Okay. I mean that's ah, like that's a good run.

Speaker E: It's a good run. It's not over.

Speaker F: I'm not suggesting it is, I'm just saying a decade. I'm just curious. Um, over that period of time I'M sure you have seen a lot of changes. I would love to hear just like big picture about that. But, but maybe what hasn't changed? What, what's still the same?

Speaker E: Yeah, I think when I first came into HERSHEY Back in 2016, I came in as a manager of external reporting. So I've kind of always been in the Chief Accounting Officer space. You know, we're more of the compliance filing with the sec. You know, working with our external auditors is that Core has not necessarily changed. What really has changed is, number one, the people, our leadership, the vision of the company. In the last 10 years, we've actually acquired, um, several companies which created a totally different new business unit. So we've done Skinny Pop, Pirate's, Booty Dots, Pretzels, and most recently Lesser evil back in 2025. So we've really grown this salty business from a non existent business in 2016, um, to a very large player in the U.S. so we're very proud of that. That comes with a lot of complexities. It comes with a lot of, uh, new challenges and things to work in terms of cross functionally with new and different teams and different supply chain. You know, pretzels and popcorn are not made the same as chocolate, in case that's a news flash to anyone. But, um, you know, it's exciting. I mean, we work on great brands and products that consumers love, so that definitely has not changed.

Speaker F: Yeah. So I guess I'm wondering, like, if you were having a conversation with, um, Jonathan ten years ago and you were this, you know, ghost of Christmas future. I suppose I have. What would you tell yourself? What insights? I mean, what, what does somebody need to know 10 years ahead of schedule? And I realize that's like an impossibly long period of time in the current environment, but I mean, any themes come

Speaker E: to mind, you got to keep up with the pace of change. In the last 10 years at Hershey, we've had Covid, we've had growth, we've had these acquisitions. There's a lot of pressure in the world of tariffs, uh, and supply chain. So how do you know? How do you respond to those things? And we've also had just normal compliance changes in the world of fasb, sec. Um, so it's just trying to stay ahead. You always have to stay ahead.

Speaker F: And I would assume that that is a, not a passive activity. That is a very deliberate focus for you and your team so you don't get tripped up by like the next thing that changes.

Speaker E: Yeah, I mean, we can't predict everything but we could certainly do what we have to do to, you know, stay current with other peers, other consumer packaged good companies and um, you know, just make sure that we're, we're doing all the right things that we need to be doing and driving things forward.

Speaker F: So one other massive change of course is AI. We can't have a conversation without bringing it up. But I'm just wondering how do you think about that relative to the productivity that you can get? But of course needing to be sure that it's trusted, verifiable, uh, that's a real balance right now. There's so many, I think, balls in the air that people are trying to juggle.

Speaker E: Yeah, I mean for us at Hershey, everyone actually has an enterprise wide digital mindset goal of leveraging AI, uh, using it to be more productive. But when you actually take that down to the individual employee or person, you know, we have a wide range of individuals who maybe aren't so comfortable with AI, others that are trailblazers and creating agents. Um, so it's really interesting to see just the level of education that's needed to get comfortable and actually see those productivity gains. I would say finance, specifically internal audit on our team, on our broader accounting and finance team, they have some real trailblazers in there that are creating agents, uh, doing a lot of work that was manually done and now they have more time to actually review and verify as opposed to being just doers. So we always tap into some of that knowledge of hey, how are you using it? How could we use it in controllership, external reporting, um, or even just more broadly within the finance organization. So in the world of controllership, you know, some of the things are more technical in nature, you know, always bouncing off, uh, my gut versus what the ASC and the FASB are actually saying. If we're a complex accounting thing that we just kind of run it through copilot and that's what we use. We have everything connected through Microsoft360, our email copilot. So that's kind of our source and we're just scratching like the tip of the iceberg. Here at Hershey, we don't have our ERP system where we've invoked. That's a new term that I actually just learned. So I'm very proud of myself. We're just taking things, but also doing all the right things on a governance standpoint. So you just want to make sure that you have right segregation of duties, uh, controls and access. All the same things as if it was a physical asset. Right. Like AI, you just don't want it to run rampant. So, you know, you need to be thoughtful, you need to be careful, you need to have the right guardrails in place. But at the end of the day though, it's just trying to take it piece by piece, find a quick pain, uh, point and try to, um, you know, see if you could explore with AI. I mean, I've done things where again, it's just getting a gut check on an accounting transaction or maybe helping me just uh, write some high level talking points. If I have meetings with execs, it helps me personally practice when I'm going to meetings or going to an audit committee meeting. Uh, you know, we have pre submitted materials. So it's like, hey, you know, here's, here are the materials. Help me create a high level talk track. Sure. And then, oh, by the way, maybe ask me some questions that might come from a group of individuals once we're going through this. So it's just helpful practice and those are just super quick, high level ways that it could be done. And again, we're promoting all of our employees to leverage AI.

Speaker F: Yeah, um, well, as we wrap up, what are going to be the challenges that you're going to need to overcome over the next five years?

Speaker E: Let's just call it. If you were to sort of fast

Speaker F: forward, what do you need to be preparing for now?

Speaker E: Yeah, well, I think there's always going to be regulatory change. Um, you know, we sit here in 2026 and we have disaggregated income statement expense. ASU, that's a challenge. That's kind of like the big bad brother to the previous segment. Asu, that came out, came out a few years ago. So it's staying ahead on some of the compliance things, is trying to find new ways to be productive and actually spend time, shift your time, shift the workforce time to things that are more value added. It's just, it's, it's staying ahead of the landscape.

Speaker F: Yeah, well, uh, change is a new

Speaker E: constant, to be sure. Absolutely. Right. Never get comfortable.

Speaker C: Thank you again to our guests, Dr. Lee and Jonathan Gregory and thank you for listening.

Speaker D: This has been the pre read brought to you by Workiva, the world's only unified platform for financial reporting, sustainability, audit and risk.

Speaker C: We've got more insights and hot takes coming your way, so be sure to follow or subscribe on Apple, Spotify, YouTube or wherever you get your edge.

Speaker D: And if you liked the show, leave a review, send it to someone you love, or just shout it out on your next video.

Speaker C: We'll see you next time. And until then, go lead it like you mean it.

Speaker D: I'm Steve Soder, and that's Alyssa Zucker. Uh, our lead producer is Mike Gravagno, with production support from Tsuy Tan and audio Engineering by JU Hays Faith Springer.

Speaker C: Pedro Sousa is our graphic designer. Transcripts are created and edited by Courtney Kimsey, thanks to our digital and social team, Mike Berg, Katie Carr, and Michael Karnowski.