Date posted: 30/04/2021

Investors demand broader business reporting

There is a unique opportunity to build a truly global system for sustainability reporting

In brief

  • Sustainability and non-financial reporting are gaining momentum around the globe
  • Professional accountants, both inside organisations and in public practice play a central role
  • Organisational success is the value that its activities, outputs and outcomes add to society

Sustainability and non-financial reporting are gaining momentum, as shown by BlackRock CEO Larry Fink’s annual letter to CEOs highlighting capital management, long-term strategy, purpose and climate change as pivotal to creating durable value. 

Increased visible collaboration from the ‘Group of Five’ nations and the launch of climate-related financial disclosure prototypes signal the start of a global push for businesses to adapt to non-financial risks, such as the current global pandemic. 

Enhancing corporate reporting 

The European Union published a draft in April of the revised Corporate Sustainability Reporting Directive, which includes legislation that seeks to put sustainability related reporting on the same footing as traditional financial reporting. 

The International Federation of Accountants (IFAC), of which CA ANZ is a member, believes policymakers have a unique opportunity to build a truly global system for sustainability reporting. 

IFAC outlines corporate reporting agenda 

IFAC CEO Kevin Dancey outlines in letters to member organisations the important responsibility and transformative opportunity professional accountants have to lead on changes to corporate reporting, specifically sustainability information. 

Dancey says professional accountants can play a central role and have the necessary expertise to meet the needs of a broad range of stakeholders who are demanding enhanced reporting that is relevant, reliable, comparable and assurable. 

Enterprise value creation the focus of GGA’s 5th colloquium 

The Good Governance Academy (GGA) hosted the fifth colloquium on 13 May 2021. The focus was on how the three critical dimensions for sustainable development – the economy, society and the environment – will affect a company's financial condition, its balance sheet, its operating performance, its income statement and cash flow, its risk profile, and its cost of capital. The GGA has published a memorandum from the colloquium which includes precis of presentations and links to all source materials. Associated videos and full presentations are also available via the GGA community portal. 

Open for consultation – SDG Impact Standards for Enterprises 

The UNDP SDG Impact Team has followed on from the December 2020 consultation by launching the second public consultation of the SDG Impact Standards for Enterprises. Feedback is sought from all interested stakeholders, including businesses, investors and public practice. The consultation seeks guidance to help translate intent into action. The consultation closes on 31 May 2021.

APRA launches draft climate change guidance

The Australian Prudential Regulation Authority (APRA) has launched for public consultation its draft guidance (Prudential Practice Guide CPG 229 Climate Change Financial Risks) on managing the financial risks of climate change for banks, insurers and superannuation trustees. APRA says the guide aligns with the recommendations from the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD).

CAs take key role in assuring climate risk reporting

In a world-first, New Zealand has introduced a Bill that requires the financial sector to disclose the impacts of climate change on their business and explain how they will manage climate-related risks and opportunities.

New report: Disclosing Impacts on Natural, Social & Human Capital in Financial Statements

The capitals coalition has released its discussion paper, which aims to explore the interface between financial and non-financial reporting. Financial statements are continuing to evolve as a result of a demand from investors for more information on the risks associated with natural, social and human capital and the extent to which an entity is contributing to these.

UNGC learning program to help companies halve emissions

The UN Global compact has launched the Climate Ambition Accelerator, a six month leaning program which aims to quip more companies of all sizes, sectors and regions with the knowledge and skills they need to help reduce emissions. 

Sustainability and non-financial reporting are you up to date? 

Read the January/February 2021 update 

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The Future of non-financial reporting

Join the discussion at the upcoming Accounting Conference on 18 May

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