Sustainability Reporting
Sustainability Reporting
With the rise of CSR, we have seen a rise in CSR measuring and non-financial
reporting by many companies throughout the world, informing various stakeholders
about their performance with regard to social and environmental issues. 90 percent of
the top 100 companies in Europe reported annually about their social performance, 59%
in USA and 61% in the rest of the world.
Phase 2: Data Evaluation – measuring social and environmental benefits and costs
and considering impacts on both the company and society, both current and future.
The drivers behind and the emergence of social and environmental accounting
reflect the same pressures that have raised the profile and importance of responsible
business and management in other management disciplines and operations, namely,
the increased importance of stakeholders and the realization that companies have
responsibilities that cannot always be expressed in traditional financial terms.
According to Adams, “rather than being concerned with profits and financial
accountability, accountability demonstrates corporate acceptance of its ethical, social
and environmental responsibility.”
In the first phase, the organization must first identify all the broad groups of
sustainability information required using the stakeholder accountability approach. The
different stakeholder issues should then be prioritized. This process depends on how
organizations define their level of sustainability disclosure- also referred to as ESG
disclosure- which is the act of communicating organizational performance on material
matters relating to ESG activities.
Materiality –Materiality helps elucidate how important certain issues are to the
stakeholder of a company.
Cost Accounting
Phase 3: Reporting
In the first two phases, the core topics are identified and the key performance
measurements for the expected contributions of responsible business also were
identified, following the designed path of responsible accounting driven by the target of
stakeholder accountability. Reporting is the dissemination of information to internal and
external users. This process must be based on three key questions:
• Which are the qualitative criteria that responsible accounting information should
represent?
• Which are the tools and mechanisms that responsible accounting information
should use for the internal and external disseminations?
To answer these questions, influential standards and guidelines have been developed
to guide leading.
Integrated Reporting
• Two main international standards: ISAE 3 issued by IAASB, and the AA1000AS
issued by Institute of Social and Ethical AccountAbility and is addressed to
anyone who provides external verification process. The AA1000 framework
emphasizes three principles: Completeness, Materiality, and Responsiveness.
• Once the data are reported, the responsible business performance can be
evaluated by comparing the results achieved with the objectives indicated during
the programming phase.