SUSTAINABLE ACCOUNTING REVIEW
environmental • economic • social | reporting • compliance • strategy
Your essential source for emerging practices and policies worldwide.
NEWS & EVENTS
No news found.
Sustainability reporting framework overload
June 23, 2016
As KPMG has discovered in their latest review of ESG reporting, (Carrots and Sticks 2016) there has been a recent surge in sustainability reporting requirements, guidance and frameworks around the world. In 2016 this includes roughly 383 different reporting instruments being applied in 64 countries - 248 forty eight were mandatory and 135 were voluntary. (This compares with 35 mandatory ESG reporting instruments and 25 voluntary instruments in 2006.)
These instruments include regulation and policies like sustainability reporting requirements issued by governing bodies or governments, financial regulators or stock exchanges; self regulation by industry following specific industry frameworks; guidance or recommendations for public reporting on a single topic like greenhouse gas emissions; voluntary standards and guidelines for sustainability reporting like the GRI or SAS (from SASB); and standards on sustainability assurance.
Stock exchanges and financial market regulators have become increasingly active in issuing disclosure requirements, accounting for roughly one-third of all sustainability reporting instruments reported in the study. Between 2013 and 2016, the number of reporting instruments from this group has roughly doubled from 23, to 44. Overall, one in three instruments apply exclusively to large publicly listed companies, and the remaining two thirds applied to either all companies or governments/state owned enterprises. Over the same period, the number of instruments specifying disclosure in the annual report had increased by almost 100 percent.
With the creation of the Global Sustainability Standards Board, (GSSB) an independent operating entity under the auspices of GRI, work is in progress to transition from the G4 Sustainability and Reporting Guidelines to GRI Sustainability Reporting Standards (GRI Standards). According to Eric Hespenheide, Chairman of the newly created “Board”, what the GSSB hopes to accomplish is to make the transition from the G4 guidelines to an interrelated series of sustainability reporting standards. However, he adds, our sector approach will be appropriate for an international audience and the sector standards will be developed inclusively with input from a very wide range of stakeholders.”