Reuters Events Sustainable Business’ Post

Key Insights from the Sustainability Reporting Guide: Empowering Businesses Towards a Sustainable Future 🚀 Summary: Sustainability reporting has emerged as a critical tool for businesses in an evolving global landscape. The latest guide on sustainability reporting, supported by the Global Reporting Initiative (GRI) and Colombo Stock Exchange (CSE), highlights the growing demand for transparency, accountability, and responsible practices. Companies are increasingly expected to disclose their environmental, social, and governance (ESG) impacts, aligning their goals with the Sustainable Development Goals (SDGs). 🌱 Key Takeaways: 1. Integration of ESG in Investment Decisions As investors now prioritize ESG metrics, businesses need to provide transparent data. This trend enhances capital allocation towards sustainable practices, ultimately contributing to resilient capital markets. 2. Evolution of Sustainability Reporting Standards The introduction of frameworks like GRI, IFRS, and others reshapes how companies report their impacts. Compliance is no longer voluntary but necessary for attracting local and foreign investors. 3. Importance of Green Bonds CSE's Green Bonds, launched in 2023, have opened avenues for businesses to fund green projects. Future expansions into Blue Bonds and Sustainability Bonds promise even broader access to sustainable capital. 4. Stakeholder-Driven Transparency Companies must balance material issues with the needs of various stakeholders. This shift towards stakeholder-focused reporting is driven by both market forces and regulatory frameworks, reflecting the growing importance of comprehensive ESG disclosure. 5. Leadership & Governance Effective sustainability reporting starts at the top, with Boards ensuring that ESG risks and opportunities are addressed in their governance processes. This guide emphasizes that leadership in sustainability is key to business success. This guide is an essential step toward preparing companies for the future, fostering innovation and resilience through transparent and responsible reporting. 🌍✨ #Sustainability #ESG #GRI #SustainableFinance #GreenBonds #InvestingForImpact

A very useful guide to #sustainability #reporting #standards and landscape in Asia Pacific.  (E.g. for Singapore 🇸🇬, #listed companies are mandated to do sustainability reporting that are aligned with the #GRI and #TCFD #frameworks.) Speaking on the topic of #materiality, there are basically 3 types, namely #impact materiality, #financial materiality and #double materiality. Regardless of the materiality type, there are certain guidelines which businesses can follow when working on sustainability #disclosure. In a recent 🌱webinar hosted by Deloitte, the 2 speakers who made reference to #CSRD for the double materiality reporting requirements in #EU advised on these practices:- 1. Corporate sustainability reporting is objective and data driven. Companies should identify the #material #topics first before selecting the #stakeholders and then engage them - e.g. consulting and validating the topics, collecting data and etc. 2. There should be a good spread of stakeholders. 3. A #narrative approach is better than a multiple choice questions one when conducting stakeholder surveys since the latter approach will limit how much the stakeholders can express. 4. As there is a substantial number of stakeholders involved, connecting the (many) dots between the functions is important. There should be enough time for discussion, education, training and guidance. 5. Corporate sustainability reporting is beyond #compliance. Companies should #collaborate 🤝 well with stakeholders to discover #opportunities. 🌟 🌱"Sustainable Finance Webinar - Corporate Sustainability Reporting: Strategic integration of double materiality for financial institutions". (6 Jun).🌱 https://lnkd.in/g69aX7Er

The magnified focus on sustainability reporting aligns with the rising trend of businesses recognizing the importance of environmental, social, and governance (ESG) factors in their operations. Stakeholders, including investors, consumers, and regulators, are now more predisposed to understanding how companies address environmental and social issues and incorporate ethical governance practices.    Financial professionals dedicated to sustainability reporting signify a strategic approach to integrating sustainability into financial decision-making processes. This suggests that companies realize the importance of sustainability and allocate resources for comprehensive and accurate reporting on their environmental and social impacts.    Sustainability reporting experts can help companies navigate the complex and critical landscape of ESG considerations, meet reporting standards, and communicate their sustainability efforts effectively to stakeholders, which reflects an augmenting shift toward sustainable and responsible business practices within the corporate finance domain. Finance professionals must stay abreast with evolving trends in sustainability reporting, ESG standards, and related regulations to remain effective contributors in this field. #genashtim #esg #sustainabilityreporting #sustainabilitymatters #sustainabilitytips

Let’s rewind a little bit…𝗪𝗵𝗮𝘁 𝗶𝘀 𝘄𝗶𝘁𝗵 𝘁𝗵𝗶𝘀 𝗺𝗮𝘁𝗲𝗿𝗶𝗮𝗹𝗶𝘁𝘆 𝗱𝗲𝗮𝗹? 𝘄𝗵𝗮𝘁 𝗰𝗮𝗻 𝗯𝗲 𝗺𝗮𝘁𝗲𝗿𝗶𝗮𝗹?  🌐 Materiality plays a critical role in sustainability reporting, helping organizations filter and prioritize topics that not only drive disclosures but 𝘀𝗵𝗮𝗽𝗲 𝘀𝗵𝗼𝗿𝘁- 𝗮𝗻𝗱 𝗹𝗼𝗻𝗴-𝘁𝗲𝗿𝗺 𝗯𝘂𝘀𝗶𝗻𝗲𝘀𝘀 𝘀𝘁𝗿𝗮𝘁𝗲𝗴𝗶𝗲𝘀. It's often seen as the cornerstone of sustainability reporting, serving as the basis for both transparency and the assurance of sustainability financial statements 🤓. However, materiality is not a one-size-fits-all approach. What’s considered "material" varies by sector and is influenced by the reporting framework in use. 🔶 For instance, the Global Reporting Initiative (GRI) defines material topics as those that reflect an organization’s most significant impacts on the economy, environment, and people, including human rights -> 𝘪𝘮𝘱𝘢𝘤𝘵-𝘧𝘪𝘳𝘴𝘵 𝘢𝘱𝘱𝘳𝘰𝘢𝘤𝘩. 🔶 The IFRS Foundation Sustainability Standards require companies to disclose material information about sustainability risks and opportunities that may reasonably impact the entity’s prospects 💲. This includes information that could influence the decisions of investors or lenders—such as whether to buy, sell, or hold equity or debt, or provide credit -> 𝘧𝘪𝘯𝘢𝘯𝘤𝘪𝘢𝘭 𝘢𝘱𝘱𝘳𝘰𝘢𝘤𝘩. 🔶 Europe has pioneered a #𝘋𝘰𝘶𝘣𝘭𝘦𝘮𝘢𝘵𝘦𝘳𝘪𝘢𝘭𝘪𝘵𝘺 𝘢𝘱𝘱𝘳𝘰𝘢𝘤𝘩, blending these perspectives. Under the 𝗘𝘂𝗿𝗼𝗽𝗲𝗮𝗻 𝘀𝘂𝘀𝘁𝗮𝗶𝗻𝗮𝗯𝗶𝗹𝗶𝘁𝘆 𝗿𝗲𝗽𝗼𝗿𝘁𝗶𝗻𝗴 𝘀𝘁𝗮𝗻𝗱𝗮𝗿𝗱𝘀 (EFRAG), material information must be disclosed if it’s impactful from either an environmental/social or financial perspective. This means reporting not only on the sustainability impacts of an organization (⏩ aligned with GRI) but also on how those impacts affect financial performance (⏩ aligned with IFRS).   As I’ve mentioned in previous posts,  𝗶𝗻 𝗿𝗲𝗮𝗹𝗶𝘁𝘆, 𝗺𝗮𝗻𝘆 𝗼𝗳 𝗮𝗻 𝗼𝗿𝗴𝗮𝗻𝗶𝘇𝗮𝘁𝗶𝗼𝗻’𝘀 𝘀𝘂𝘀𝘁𝗮𝗶𝗻𝗮𝗯𝗶𝗹𝗶𝘁𝘆 𝗶𝗺𝗽𝗮𝗰𝘁𝘀 𝗮𝗿𝗲 𝗹𝗶𝗸𝗲𝗹𝘆 𝘁𝗼 𝗯𝗲𝗰𝗼𝗺𝗲 𝗳𝗶𝗻𝗮𝗻𝗰𝗶𝗮𝗹𝗹𝘆 𝗺𝗮𝘁𝗲𝗿𝗶𝗮𝗹 𝗼𝘃𝗲𝗿 𝘁𝗶𝗺𝗲. This makes identifying and addressing these issues not just a compliance exercise but a strategic necessity. 𝗪𝗵𝗮𝘁 𝘁𝗼𝗽𝗶𝗰𝘀 𝗰𝗼𝘂𝗹𝗱 𝗯𝗲 𝗺𝗮𝘁𝗲𝗿𝗶𝗮𝗹? 📊 Though the criteria for selecting material topics may differ across frameworks, there is growing consensus around which topics should be used as potential candidates when conducting a materiality review. These topics are often closely linked to the Sustainable Development Goals (#SDGs) and fall within the broader #ESG (Environmental, Social, and Governance) categories. Below 👇, you’ll find an infographic highlighting some key ESG topics that companies should consider when conducting a #materialityassessment. 𝙒𝙝𝙞𝙘𝙝 𝙩𝙤𝙥𝙞𝙘𝙨 𝙝𝙖𝙨 𝙮𝙤𝙪𝙧 𝙤𝙧𝙜𝙖𝙣𝙞𝙯𝙖𝙩𝙞𝙤𝙣 𝙞𝙙𝙚𝙣𝙩𝙞𝙛𝙞𝙚𝙙 𝙖𝙨 𝙢𝙖𝙩𝙚𝙧𝙞𝙖𝙡? #SustainabilityReporting #ClimateReporting #Sustainability #Climatedata #Climate

Sustainability accounting and ESG impact reporting are increasingly vital for investors evaluating their investment choices. Climate change challenges prompt investors to rethink strategies for long-term profitability. Thorough ESG reporting is crucial for understanding a company's sustainability performance.   In the fourth chapter of "Sustainable Accounting: How ESG is Impacting the Market," Dr. Stefan Grabs from Nexia GmbH in Germany delves into the investor’s perspective on ESG (Environmental, Social, and Governance) factors. He explores the importance of sustainability accounting for accountants and discusses the crucial role of the ESRS E-criteria (European Sustainability Reporting Standards).   The European Sustainability Reporting Standards (ESRS), especially their environmental criteria (E-criteria), are essential for systematically evaluating and disclosing an organisation's approach to environmental issues and climate change resilience. #SustainableAccounting #ESG #Sustainability #ESGInvesting #SustainabilityReporting #CorporateSustainability #ESRS

PwC's latest Global Investor Survey revealed a significant shift in investor priorities regarding materiality.  While there continues to be interest in how sustainability influences financial performance (financial materiality), 75% of investors now also express a desire to understand a company's environmental or societal impact (impact materiality). This marks an increase from 60% in 2022. Furthermore, among these impact-focused investors, three-quarters are requesting the disclosure of the impact's monetary value on the environment and society. With the introduction of #doublemateriality, the Corporate Sustainability Reporting Directive (#CSRD) and the accompanying framework represented by the European Sustainability Reporting Standards (#ESRS) successfully address this need. Embracing double materiality is key to ensuring accountability to stakeholders and fostering the integration of sustainability throughout the value chain. For more guidance on the process, reach out to us >> https://lnkd.in/dfNHaYwf

Not all Sustainability reporting frameworks are the same especially interms of materiality The types of materiality in sustainability reporting: Impact materiality:How a company's activities impacts the environment, society, and the economy. Financial materiality: How sustainability issues can impact a company's financial performance and access to capital. Double materiality: Measuring and reporting both types of impacts Why are both important? Make informed decisions: Identify and manage sustainability risks and opportunities that can impact their financial health. Enhance transparency: Demonstrate a holistic view of their impact on stakeholders. Attract investors:Showcase their commitment to long-term value creation. Frameworks for Impact Materiality: Global Reporting Initiative (GRI): Offers comprehensive sustainability reporting standards, including the GRI Standards on material topics. Frameworks for Financial Materiality: Task Force on Climate-Related Financial Disclosures (TCFD): Provides recommendations for companies to disclose climate-related risks and opportunities. International Sustainability Standards Board (ISSB) (IFRS) : developed so investors receive decision-useful, globally comparable sustainability-related disclosures that meet their information needs. Sustainability Accounting Standards Board (SASB) : Provides industry-specific sustainability accounting standards. Frameworks for Double Materiality: Corporate Sustainability Reporting Directive (CSRD): places strong emphasis on both types of materiality. #sustainability #ESG #impact #finance #data #reporting #business #strategy #management #accounting #climatechange

Many thanks to Ms. Marilyn Obaisa-Osula who demystified Sustainability Reporting during a webinar hosted by Utica Capital at the end of August. She methodically explained the genesis of sustainability reporting and the progress that has been made to date. The point that struck me the most was that "the foundation for proper disclosures starts with clear ownership at the top and clear governance". She further explained that for sustainability disclosures to be credible, ESG data must be treated with the same rigour as financial data. My personal reflections after the webinar were: 1. Despite the largely voluntary nature of sustainability disclosures, standardization is key and there is a shift towards achieving a global baseline for sustainability reporting particularly with the advent of IFRS S1 and IFRS S2.  2. Sustainability reporting can be an avenue for businesses to demonstrate their approach to managing ESG risks as well as maximizing opportunities opened up by the focus on ESG. One such opportunity is sustainable finance initiatives that are geared towards achieving sustainable outcomes. 3. Sustainability disclosures are relevant to a myriad of stakeholders, however providing information that is relevant to the decision-making of ESG conscious investors is a crucial aspect of sustainability reporting.  4. ESG risks and opportunities are dynamic and constantly evolving, however an adaptable sustainability strategy that is clearly communicated across the entire business can be a valuable means of prioritizing the most relevant issues to a particular business.  5. It is essential to have a clear understanding of the regulatory universe surrounding sustainability reporting. Although sustainability reporting in the African context remains largely voluntary, lackadaisical reporting may lead to blue washing and greenwashing. #sustainabilityreporting #ESGdisclosures #bluewashing #greenwashing

A very crisp post on materiality in major sustainability reporting frameworks; a very insightful post especially when you consider how many sustainability professionals still grapple with this...