15 October, 2020
We recently saw the announcement of another new sustainability reporting framework to add to your list – yes, another… really.
However, this framework – created by the Big Four accountancy firms – doesn’t require a whole additional workstream to supplement other reporting. Instead, companies are encouraged to report on 21 core metrics and 34 expanded metrics and disclosures as part of their financial reports. And given accountants are in the centre of financial reporting and know all about how to compare the performance of different businesses, they’re actually very well placed to include the environmental, social and governance factors that investors are increasingly taking into account.
Of course, metrics alone aren’t everything – companies still need explain the initiatives, narratives and explanations that underlie the metrics. It’s impossible to understand what is unique to a business its particular sustainability footprint, from a 21–metric framework.
But comparability – and the competition it should lead to – is a great way to raise ambitions and drive change. So it could mean companies double down on their their strategy for managing these impacts, understanding which matter most to their stakeholders and where they have the capacity to create the biggest change.
We’re yet to see the report, but we have a good feeling about this one. The next phase of sustainability reporting is here and it’s integrated.
By Patrick Bapty