Sustainability and ESG Reporting

Updated: December 11, 2024

ENVIRONMENTAL

This three-part series takes a deep dive into voluntary carbon markets and their challenges, providing insight into the world of carbon offsets for accountants, investors, regulators and policymakers.

CPA Canada's VP of Member Experience Rosemary McGuire will sit down with Scott Bandura, Partner of National & Global Accounting Consulting Services at PWC and Conor Chell, Partner & National Leader, ESG Legal Risk & Disclosure at KPMG to discuss the ramifications of the new greenwashing regulations that resulted in amendments to the Competition Act in June 2024.

On June 20, 2024, new provisions were added to the Competition Act that explicitly target greenwashing. Simply stated, businesses are now required to have testing or substantiation to support certain environmental claims.

The organization is calling on regulators around the world to consider adopting the standards.
Global securities regulators are formally embracing the International Sustainability Standards Board’s (ISSB) climate-disclosure standards, clearing the way for adoption around the world.

Following a comprehensive review, the International Organization of Securities Commissions (IOSCO) has endorsed the ISSB’s final standards for sustainability disclosures, which were published in June following an 18-month consultation process.

Revisiting the Megatrends
Almost a decade has passed since the PwC network identified five Megatrends, which we characterised as deep and profound trends, global in scope and long-term in effect, touching everyone on the planet and shaping our world for many years to come. It is now clear that these Megatrends have transformed our world even faster than we predicted. Largely this is due to the interaction between the trends, which has turbocharged both the speed and pervasiveness of change.

At its meeting on 4 April 2023, the International Sustainability Standards Board (ISSB) decided that it will complement its package of transitional reliefs to support companies applying the ISSB’s first two Standards—S1 (general requirements) and S2 (climate).

The relief will enable companies to focus initial efforts on ensuring they meet investor information needs around climate change.

It means companies can prioritise putting in place reporting practices and structures to provide high-quality, decision-useful information about climate-related risks and opportunities in the first year of reporting using the ISSB Standards.

Over the last year, global executives have faced a number of challenges, including economic uncertainty, geopolitical conflict, supply chain disruptions, and talent shortages, among others. Despite these headwinds, concern over climate change continues to be a top priority for CxOs and their organizations.

As the popularity of environmental credits grows, so do concerns regarding their financial reporting. This Accounting Spotlight examines environmental credits and key carbon accounting considerations.

Background:
An increasing number of entities in different sectors and industries aim to reduce global greenhouse-gas emissions. While several are taking steps to reduce their own carbon emissions, these efforts may not be sufficient to achieve required or voluntary emission commitments.

Environmental credits can help entities accomplish their carbon emission reduction targets and goals. The popularity of such credits has grown; however, questions have emerged regarding the accounting and reporting for them since the treatment of environmental credits is not explicitly addressed in US GAAP.

A look at some of key takeaways around reporting standards, funding inequities and enhancing credibility of net-zero targets. This year’s 27th UN Climate Change Conference (COP27) in Sharm El Sheikh, Egypt addressed a wide range of financial and societal barriers impacting climate change action globally. Whereas COP26 was focused on identifying issues and formalizing commitments, this year’s discussions revolved around planning initiatives.

There are growing expectations for companies to contribute to the fight against climate change by reducing greenhouse gas emissions from their operations and value chains. However, in order to set targets and develop effective plans to cut emissions, we need to properly account for the level of emissions and where they are coming from. How this data is to be collected and reported is often little understood.

The implementation of border carbon adjustments will offer CPAs a key opportunity to provide guidance around new policies and regulations while driving their organizations and clients toward lower carbon business models.

Canada’s transition to net zero by 2050, which was enshrined in legislation in 2021, requires significant reductions of greenhouse gas (GHG) emissions. To achieve that objective, GHG emissions need to be included in our everyday business and consumption decisions. This is done by putting a price on emissions, expressed in carbon units, which has been implemented across Canada. The federal government intends to increase the price annually in the coming years.

Economy-wide net zero ambitions continue to scale up, but progress on decarbonisation over the past 12 months has declined.

Our Net Zero Economy Index (NZEI), an indicator of the progress G20 members have made in reducing energy-related CO2 emissions and decarbonising their economies, shows that at just 0.5%, the global rate of decarbonisation in 2021 was at its lowest level in over a decade.

Corporate Reporting: Climate Change Information and the 2021 Reporting Cycle

Significant global attention on how business and capital markets are responding to the climate crisis, including increasing regulatory and investor scrutiny, challenges professional accountants—in business and in professional practice—to play an active role in determining the way climate change information is reported in the upcoming 2021 reporting cycle and is enhanced in future years. Although financial reporting standards have not changed, investors and other stakeholders now consider climate change to be a material issue that can have financial consequences for most companies.

GUIDANCE PRODUCED BY A4S

Achieving net zero emissions in an organization will rely on the knowledge, skills and processes inherent within the finance function. Where an organization has made a net zero commitment, finance professionals are well placed to develop pathways to achieve net zero, setting interim targets, allocating funds, reporting progress and integrating net zero into decision making processes over time.

A PDF version of this publication is attached here: Navigating the ESG landscape (PDF 314kb)

After years of increasingly vocal demand for enhanced transparency about ESG matters from investors and other stakeholders, regulators and standard setters in various jurisdictions issued definitive proposals to transform ESG reporting in 2022. So far this year, proposed ESG disclosures have been released in the European Union (EU) as part of the Corporate Sustainability Reporting Directive (CSRD), internationally by the International Sustainability Standards Board (ISSB), and in the US by the SEC. These “big three” proposals would each require expansive sustainability disclosures — although their proposed scopes and other details vary. All three proposals were subject to public comment periods that have now closed.
With a global network of reporting requirements that encompass a broad spectrum of value chain contributors, it is likely that most companies will find themselves impacted by one or more of the proposed disclosure regimes. Proactive companies are in the process of assessing the scope and applicability of the proposals so that the appropriate planning can begin now. An SEC registrant that has a subsidiary listed in the EU and a subsidiary in a jurisdiction that requires ISSB reporting, for example, may be subject to the requirements in all three proposals. With equivalency — that is, whether disclosures for one reporting framework can satisfy some or all of the requirements of another — not yet determined, companies captured in multiple reporting regimes have a vested interest in understanding which reporting applies and where it aligns and diverges. Understanding the similarities and differences will help companies develop the requisite reporting strategy, data gathering processes, and related controls, providing for a streamlined process and effective deployment of resources.
This publication compares and contrasts key provisions among the three proposals. We offer our perspectives on the proposals, including some of the suggestions we have made to each regulator or standard setter to enhance operability. By understanding the requirements of the different proposals, preparers can develop the appropriate reporting strategy, one designed to capture the right data the first time.

Read this report to learn more about the Greenhouse Gas (GHG) Protocol, how its standards are currently being used to measure GHG emissions, and observations and implications for standard setters and regulators.

Taskforce on Climate-related Financial Disclosures (TCFD): ahead of mandatory reporting (Financial Reporting Council’s Financial Reporting Lab) - Financial markets need clear, comprehensive, high-quality information on the impacts of climate change. This includes the risks and opportunities presented by rising temperatures, climate-related policy, and emerging technologies in our changing world.

Scenario analysis, a key recommendation of the TCFD, allows a company to understand and quantify the risks and uncertainties it may face under different hypothetical futures. It helps in decision making and allows businesses to shape their strategy. In the light of scenario analysis outcomes, businesses can focus on those key risks and opportunities that most materially impact their business models. This, in turn, allows them to develop their mitigation plans and respond appropriately to these risks through strategic decisions.

A review of literature to inform the way forward. Canada's climate is changing, bringing new risks for its roads, buildings, water pipes, ports, and transmission lines.

This report outlines the key findings from a CPA Canada and Deloitte study of climate-action plans of 20 Canadian public companies and how they communicate them.

This short glossary explains common climate terms and jargon associated with climate.

Canada has committed to reach net-zero greenhouse gas emissions by 2050. We reported on the need for a unified national plan earlier this year; this report serves as a transition plan for getting there.

We at IFAC, alongside many of our partners and stakeholders, consistently advocate for relevant, reliable, and comparable sustainability-related information, including enhanced climate risk assessment and disclosure. We believe professional accountants have an essential role to play as companies strive to meet rapidly increasing demands from investors, policy-makers, and other stakeholders for enhanced information addressing the global climate crisis.

Climate-related risks have financial statement impacts. All companies are facing climate-related risks and opportunities and are making strategic decisions in response – including around their transition to a low-carbon economy. These climate-related risks and strategic decisions could impact their financial statements – and KPIs.

EY has reached this target by reducing absolute emissions, and then offsetting or removing more than the remaining amount of EY emissions, every year. EY has reached a major milestone in its four-step carbon ambition and is now carbon negative. The organization continues to focus on reducing absolute emissions in-line with its science-based target and is on-track to reach net zero in 2025. EY teams are using their experience alongside the services, recommendations and people to help others decarbonize and transition to a green future.

 

The costs and effects of carbon are a growing global concern. Large emitters now are faced with the challenge of how to price carbon and account for its impact. Companies participating in the EU ETS already account for 40% of greenhouse gas emissions in Europe, and the European Commission has proposed expanding emissions trading to other sectors, including road transport and shipping. Given the importance of the EU ETS—it has led to a reduction of 35% in emissions—and history, other countries are looking to it to learn from its experiences.

Addressing climate change is a mammoth undertaking. It requires action from all stakeholders, not just governments. That was why the Kyoto Protocol failed. Governments were committed to various degrees, but most businesses, consumers, and citizens were not. This time they are.

Consider CEOs who are assessing the current landscape as they think about their organizations’ go-forward strategies. They don’t know how the world will unfold, but what they do know is that they must make choices so that regardless of what happens, they are positioned to succeed.

Historically, that success has been focused on investors and regulators and, of course, consumers. Today, however, companies are aware of larger sustainability forces at play. At the macro level, governments and regulators are debating action and public opinion is evolving. But only when these issues affect companies at the micro, organizational level, will sustainability be more than just another issue on the horizon, and that moment is happening now.

Putting the E in ESG is the first of a three-part series of briefs exploring sustainability, business and the finance professional’s key role. This introduction to the series highlights environmental protection factors that finance professionals can focus on to make a difference. It includes a call to action for finance professionals to help organizations improve their impact on the planet.

As highlighted in the Sustainability and business — the call to action; build back better report, we started a programme of thought leadership to explore accountancy and sustainability. This is part of a series of briefs exploring the topic of sustainability, business and the finance professional’s key role. These briefs will help organizations consider the sustainability issues, how to integrate them into their long-term decision-making, and how to incorporate these issues into internal and external reporting.

Climate change is an urgent, global, and systemic issue that can threaten the sustainability of organizations, markets, and economies. It presents both physical risks (e.g., increasingly severe weather events) and transition risks (e.g., those associated with moving towards a low-carbon economy that may affect asset values or lead to higher costs of doing business). A low-carbon transition will change how economies operate creating both uncertainty and significant opportunities.

A transition to a low-carbon society cannot be achieved by business as usual. Climate action will require relevant policy initiatives and incentives, consistent and well-considered regulation, robust climate risk assessment, responsive business practices, and high-quality disclosures that advance climate action and adaptation. As instrumental members or advisers of every government, business, and not-for-profit organization, professional accountants can influence and enable the transition to low-carbon economies.

With the focus on climate issues and potential policy approaches, businesses need to know their carbon footprint and how they may be affected. Company environmental, social and governance policy and reporting has become increasingly important. Climate change and climate risk have taken center stage, and companies need to understand their carbon footprint to properly disclose risks and opportunities. Close examination of both direct and indirect carbon emissions in a company’s supply chain can help them measure and understand their carbon footprint.

Sustainable-bond issuance surged to a record high in the first quarter as more countries and companies looked to tap growing demand from investors across the globe. Environmental concerns have risen for many investors in recent years as the world steps up its transition to a low-carbon economy, while the COVID-19 pandemic has put a renewed focus on health and broader social inequality.

Climate change risk-related disclosures in extractive industries reports on a study of 60 of the world’s most carbon-intensive mining, oil and gas companies and the quality of disclosures in their management reports and financial statements about the potential impact of climate change on their business. It concludes that climate change related disclosures need to be improved and that such disclosures in annual reports require more clarity and depth.

Climate change is a pervasive risk that continues to impact businesses regardless of their industry and location across the globe. For investment and valuation communities, understanding and assessing these impacts is critical to determining the value of businesses and making sound investment underwriting decisions. The Canadian Chapter of the A4S CFO Leadership Network has developed a five-step framework to help investors and valuators incorporate climate change risks and opportunities into valuations. This framework – complemented with four case studies – offers practical advice on performing a valuation analysis and documenting the assessment. If you would like to learn more about the guidance and Excel-based tool from the valuations project team, please watch the A4S Valuations and Climate Change — Deep Dive Webinar. Note: This webinar is available on the A4S YouTube page (external to CPA Canada).

CPA Canada and the Canadian chapter of the A4S CFO Leadership Network recently convened a series of virtual events with key players across the energy sector to engage in a dialogue on enabling a net-zero transition for Canada. These events were set up to gather the following insights and viewpoints on a unified national plan toward a net-zero economy: What is the current and desired narrative, and what are the critical gaps to achieving it? This report summarizes what we heard from the different audiences who took part.

Climate change may affect financial statements of cities in several different ways. Uncertainties about climate-related risks and events may have implications for a city's cash flows, assets, liabilities, reserves, revenue streams, and cost of capital.

This tool serves to help financial statement preparers and auditors better understand how climate-related issues might affect the application of Canadian public sector generally accepted accounting principles (GAAP). It includes questions to ask under CPA Canada's Public Sector Accounting Handbook when determining the impact of climate-related issues on the financial statements and the associated note disclosures.

You will also find considerations of how climate-related issues may impact reporting outside of the financial statements (i.e. in the annual report) and additional questions to ask under the Public Sector Accounting Board's Statements of Recommended Practice (SORPs).

Gain a competitive advantage and lower your carbon footprint? Find out how to apply a step-by-step process to reduce GHG emissions for your organization. This guideline provides a straightforward and step-by-step process to identify, implement, measure, monitor, and report on GHG emissions.

LEARN HOW TO: adopt a low carbon emissions mindset; establish appropriate GHG emissions management systems and tools; implement actions to manage and report on GHG emissions and accelerate efforts to achieve efficiencies and cost savings.

YOU WILL ALSO FIND: discussion on emerging industry trends, challenges, and opportunities; insights into how CPAs play an important role in establishing effective GHG emissions management systems and additional resources on climate change adaptation and mitigation.



Cities are on the front line of climate change impacts. Learn how climate-related information can support municipal stakeholders with short-term budgeting, long-term capital planning and enhance the usefulness of a city's public financial reports.

From responding to the increasing frequency and severity of extreme weather events, to building resilient infrastructure, cities are incurring higher costs to maintain critical services to their residents, communities and businesses that call them home.

In order to integrate climate change considerations into capital planning and budgeting decisions, decision-makers within municipalities need reliable and consistent climate-related information. While the Task Force on Climate-related Financial Disclosures (TCFD) recommendations were developed for use by the private sector, increasingly cities are recognizing the applicability of these recommendations for their own internal decision-making and external reporting.

This guide highlights some of the actions taken by Canadian cities in response to climate change, demonstrating the climate adaptation leadership underway across the country. It also includes process frameworks for different types of decision-makers within municipalities, including those working in financial reporting and capital planning, to help cities implement the TCFD recommendations.

Investor Interviews on Climate Disclosure and Decision-Making - Key Findings

Investors recognize that a transition to a low-carbon economy is happening, bringing significant investment opportunities and risks. Are you prepared to respond with the information they need?


ALBERTA ENERGY TRANSITION STUDY | A $61B OPPORTUNITY - The global energy transition could create 170,000 jobs in the cleantech sector in Alberta and contribute $61 billion to GDP by 2050, concludes the Alberta Energy Transition Study conducted for Calgary Economic Development, Edmonton Global, and made possible thanks in part to funding from Prairies Economic Development Canada (PrairiesCan).

Can Sustainability be a Driving Force for the Canadian Economy? Current environmental challenges have given rise to new ways of thinking and doing business. Sustainability is having a pivotal influence on business practices to meet the needs of today while securing the needs of tomorrow.

Center for Audit Quality Resource Highlights How Climate-Related Risk Considerations Intersect with the Audited Financial Statements. New publication provides an overview of current accounting and auditing requirements for climate-related risks. Washington, D.C. — Today, the Center for Audit Quality (CAQ) released a new resource, Audited Financial Statements and Climate-Related Risk Considerations, that provides investors and other stakeholders with a foundational understanding of current climate-related reporting and auditing requirements in the U.S. and how they are applied. The CAQ is releasing this report at a pivotal moment for climate-related and other environmental, social and governance (ESG) reporting, as investor and other stakeholder demand for this information continues to increase.

Climate Action and the Accountancy Profession: Building a Sustainable Future: This report considers the role and significance of accountancy and finance professionals in advancing organizational climate action. With surveys and relevant quantitative analyses from across various sectors, the publication seeks to encourage effective planning and measures for climate change. It also emphasizes the integration of finance and sustainability expertise in the areas of business modeling, governance and target-oriented decision making.

Climate Scenario Analysis: Current Practice and Disclosure Trends - The impacts of climate change are already being felt around the world. Action must be taken now if we are to avoid its most serious impacts in the future. Although the precise effects of climate change are highly uncertain, they must be integrated into decision-making processes now.

Although not everyone views the COP26 Climate talks as a success, the UN Framework Convention on Climate Change (UNFCCC) Conference of the Parties (COP) is a crucial international mechanism for politicians and other key stakeholders to make progress in dealing with climate change. And progress is what happened in Glasgow in November.

DS Smith is a leading supplier of sustainable packaging solutions, paper products and recycling services worldwide. Its story can be traced back to the box-making business started by the Smith Family in East London in the 1940s. Today, it is a large, global company listed on the London Stock Exchange.

True to its Purpose, “Redefining Packaging for a Changing World”, DS Smith is championing the transition to the circular economy with a circular business model that involves collecting used paper that is turned into recycled packaging and then collected to start the loop again.

DS Smith Sustainability Report 2021 provides a progress update on the Now and Next sustainability strategy, which is focused on closing the loop through better design, protecting natural resources by making the most of every fibre, reducing waste and pollution through circular solutions and equipping people to lead the transition to a circular economy.

A group of major global accounting industry organizations, representing millions of accountants around the world, announced a series of climate-focused initiatives, including commitments to achieve net zero greenhouse gas (GHG) emissions within their own organizations and to help enable members to set and follow their own net zero strategies.

The organizations are part of the Accounting Bodies Network (ABN), a collaboration between the sustainable business-focused Accounting for Sustainability (A4S) and professional bodies across the globe. The 13 signatories to the new climate initiative include accounting bodies from Canada, Japan, Australia, and Europe, among others, and the globally-focused Association of Chartered Certified Accountants.

 Global Powers of Luxury Goods 2021 - The pandemic was the catalyst for change as luxury goods companies adopted new paradigms of value creation. As they seek new ways to connect with their customers, they are changing their approach and mindset by incorporating sustainability and digitalization into their long-term strategies, to align with consumers’ demands and new regulatory requirements. 

Corporate Reporting: Climate Change Information and the 2021 Reporting Cycle - Significant global attention on how business and capital markets are responding to the climate crisis, including increasing regulatory and investor scrutiny, challenges professional accountants—in business and in professional practice—to play an active role in determining the way climate change information is reported in the upcoming 2021 reporting cycle and is enhanced in future years. Although financial reporting standards have not changed, investors and other stakeholders now consider climate change to be a material issue that can have financial consequences for most companies.

Climate-related risks have financial statement impacts - All companies are facing climate-related risks and opportunities and are making strategic decisions in response – including around their transition to a low-carbon economy.

These climate-related risks and strategic decisions could impact their financial statements – and KPIs.

Our climate change resource centre provides FAQs to help you identify the potential financial statement impacts for your business. If you sit on an audit committee, you can also use our 10 questions for audit committees (PDF 2.2 MB) as a starting point for your impact assessment.

 

 

SOCIAL

The pandemic and cultural and socio-economic reckonings that followed have ushered in a new era for the ‘S’ in ESG. In the wake of rapidly evolving social expectations, and in the context of an unprecedented battle for talent, management teams have strived to build more inclusive and human-centric work environments. Most organizations are adapting to the post-pandemic world by offering employees flexibility, increasing their commitments to employee health and safety, and educating their teams about diversity, equity, and inclusion (DEI) and Indigenous reconciliation. Indeed, as these practices become more widely adopted, they may be regarded as new norms that contribute to an organization’s social license to operate.

There remains much work to be done for businesses to manage their exposure to social risks and opportunities, particularly those related to complex and evolving social issues including DEI, Indigenous reconciliation, and human rights.

As social issues draw more investor and consumer attention, businesses are starting to strengthen their efforts in this area.
While there has been a lot of talk lately about environmental, social and governance (ESG) investing and reporting, the focus so far has been mainly on the “E.” 

CPA Gord Beal, CPA Canada’s vice-president, research, guidance and support on why accountants must recognize and embrace their critical role in the process. Believe it or not, corporations weren’t always driven by profit.

Dating back to the 17th century, the earliest corporations were established to help support the greater society, whether it was to build hospitals or effectively develop a product; the corporation offered a formal, organized structure meant to protect liabilities and the management of the business itself. It’s not that they weren’t making money, but that was not strictly the focus.

There has been a growing focus on the “social” pillar of environmental, social and governance (ESG) matters. This report examines why these social factors are increasingly important and how CPAs can lead in this space.


The Rise of the Social Pillar: An Introduction to the ‘S’ in ESG is a foundational resource for CPAs that explores the diverse range of social factors impacting organizations and the complexities as organizations are expected to increase transparency and accountability for their social impacts, practices and performance.


GROWING DEMAND FOR ACTION AND TRANSPARENCY ON SOCIAL FACTORS

Stakeholders increasingly expect organizations to consider the impact of social matters on their business models, operations and across their value chains. Additionally, regulators and governments across the globe are looking at integrating social matters into policymaking and disclosure rules. The scope of social matters is broad and includes:


THE ROLE FOR CPAS

CPAs have a critical role to play in facilitating the integration of social factors into an organization’s strategy, in its risk and performance management, and into the reporting and assurance of relevant information.

IFAC defined two key actions for G20 leaders to focus on as COVID-19 persists: supporting the IFRS Foundation’s initiative on sustainability standards, and championing public financial management. Commitment to these two actions, which build on the four priorities laid out in IFAC’s 2020 G20 Call to Action, is central to building a better future.

Throughout time, an enterprise’s purpose has been associated with creating value for its shareholders. In today’s day and age, however, shareholders should be replaced by stakeholders in such definition. Actions and decisions of an enterprise have an impact in a wider population, defined as stakeholders. In our present world, a company or firm has responsibilities that extend beyond its profit-generating capabilities and into the effect it has in its environment and society. In the acknowledging and complying with this commitment, a firm is able to engage in corporate social responsibility (CSR), making it socially accountable — to itself, its stakeholders, and the general public.

WSIB recognized the value of their employees by investing in an internal mental health strategy. Learn from their journey and experiences.

 

 

GOVERNANCE

Investors have increasingly been asking for companies to report on their sustainability efforts. What role do boards play in this disclosure?

20 questions directors of not-for-profit (NFP) organizations should ask about a director’s duties

Directors of NFP organizations have various duties to their organizations and to themselves in terms of personal liability. Learn what the duties of loyalty and care encompass, and how to successfully fulfil them.

IFAC Comment: A strong governance structure is one of the key elements necessary for the successful growth of any organization. IFAC considers effective and transparent governance fundamental for building trust and for achieving its strategic objectives. Many of our member organizations have led the way on strong governance practices and diversity initiatives, but there are often opportunities for making further enhancements and for empowering others. It is important to periodically review and consider best practices, adopting those that would be most effective for your organization based on its values, mission, purpose, and strategy.

The cornerstone of strong governance is strong leadership, starting with the Board of Directors. The role of a Board is to provide strategic guidance and oversight of operations. This ensures an organization makes an unyielding commitment to integrity and takes purposeful steps to achieve its mission. Given the Board’s key role, it is critical for the Board to collectively represent the best mix of expertise and experience.

In this Q&A article, we explore the important qualities any Board member should have and the key components of an effective Board. Joan Amble shares insights from her extensive experience on corporate Boards to help us reflect on our own governance structure, positioning our organizations for success, and being prepared for challenges. Joan offers her personal views, which are not attributed to any particular organization.

This article provides insights into how companies can establish effective governance over their environmental, social and governance reporting to ensure high-quality disclosures. Topics discussed include: how to determine the materiality of ESG topics; how to implement board oversight over material ESG matters; and how to integrate ESG matters into the overall company strategy.

 

 

STANDARD SETTING

External assurance plays a key role in enhancing trust and confidence in financial and non-financial reporting.

With the goal of enhancing the trust and confidence investors, regulators and other stakeholders have in sustainability information, the International Auditing and Assurance Standards Board has developed a landmark, global sustainability assurance standard

Chartered Professional Accountants (CPAs) will play a critical role in helping businesses navigate reporting under new sustainability disclosure standards.
Stakeholder and investor demands for greater insight into sustainability performance are pushing businesses to report on metrics beyond the bottom line — creating a pressing need for a system to hold them accountable.

On 17 February, more than 1,000 people from 45 countries convened in Montreal and online to discuss what’s next for investor-focused sustainability disclosure. Onsite in Montreal, the room was abuzz as businesses, investors, policymakers, regulators and other stakeholders engaged in meaningful discussion about the forthcoming standards from the International Sustainability Standards Board (ISSB). Read on for seven key takeaways from the day’s sessions.

The Corporate Reporting Webinar Series offers a deep dive into the International Sustainability Standards Board's (ISSB) two proposed standards, one on general requirements for sustainability-related disclosures and one on climate-related disclosures. We discuss how companies can start the groundwork, data gathering and processes for ISSB reporting by using tools already widely available for businesses and investors.

The series consists of three parts:

Part 1: Better information for better decisions—Introduction to investor-focused sustainability disclosure
Part 2: Any size or stage—Getting started on climate disclosure
Part 3: Connectivity and controls—the path to investor-grade disclosure

The ISSB set a clear path for the SASB Standards when it launched draft IFRS Sustainability Disclosure Standards, explaining how initially the industry-based SASB Standards can help companies identify their sustainability risks and opportunities along with metrics to use in their disclosures. The SASB Standards provide disclosures across a range of sustainability matters and, over time, will inform the industry-based requirements in the IFRS Sustainability Disclosure Standards. As such, report preparers will benefit from starting now, using the SASB Standards to meet the immediate needs of investors while laying the groundwork for adoption of IFRS Sustainability Disclosure Standards in the coming years.

Here are a variety of recent ISSB decisions to be aware of as you plan for 2023, followed by some tips for how best to prepare for the future application of IFRS Sustainability Disclosure Standards.

Environmental, Social and Governance (ESG) investing continues to soar. Bloomberg Intelligence estimates assets will surge from US$35 trillion to US$50 trillion in the next three years.

These figures don’t include the exploding global sustainable debt market. According to research from the Chartered Professional Accountants (CPA) Canada and the International Federation of Accountants (IFAC), issuances of green, social, sustainable and sustainability-linked bonds hit a record high of US$1 trillion in 2021 and are projected to hit US$1.35 trillion this year.

With companies of all kinds being asked to provide sustainability information, CPAs need to prepare for reporting and assurance engagements in this area.

Sustainability reporting has been gaining momentum across a growing number of industries. And, as stakeholders and investors look for more information on a company’s ESG policies and footprint, the demand for third-party assurance of that information is also increasing.

To help stakeholders stay up to date and engage with the work of the International Accounting Standards Board, the International Sustainability Standard Board and the IFRS Interpretations Committee, the IFRS Foundation produces podcasts where we summarize and discuss the latest developments, meetings and project developments.

The International Sustainability Standards Board (ISSB) held two live webinars on 28 April for all stakeholders on its proposed standards on general sustainability-related disclosures and climate-related disclosures. The consultation period ends on 29 July 2022, with the aim to finalise the requirements by the end of the year, subject to feedback.

General Requirements for
Disclosure of Sustainability-related
Financial Information

The International Sustainability Standards Board (ISSB) has published the Exposure Draft IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information (General Requirements Exposure Draft) which sets out the overall requirements for an entity to disclose sustainability-related financial information about all its significant sustainability-related risks and opportunities, to provide the market with a complete set of sustainability-related financial disclosures.

Comments on the International Sustainability Standards Board (ISSB) Exposure Drafts

IOSCO encourages standard setters’ work on assurance of sustainability related corporate reporting.
15 September 2022

Demand for timely, accurate, and relevant sustainability information has risen dramatically in recent years. For sustainability reporting to meet the needs of stakeholders in the public interest, the infrastructure that supports sustainability reporting and assurance must be underpinned by high standards of ethical behavior and independence together with a robust system of quality management, oversight and enforcement.

WHAT IS IESBA DOING?

The goal of achieving global adoption of integrated reporting across all industry sectors is continuing to gain momentum, according to an in-depth study of adoption trends conducted by IFRS Foundation staff.

Integrated reporting enhances the way organisations think about, plan and report on business performance and provides insights into their future prospects through a multi-capital and value creation lens. More than 2,500 businesses in 70+ countries have adopted integrated reporting. The IASB and ISSB Chairs encourage the continued use of the Integrated Reporting Framework—now part of the IFRS Foundation—and commit to using its principles and concepts to help achieve a globally-accepted, comprehensive corporate reporting system.

The practice of publicly disclosing transition plans is rapidly evolving, and yet significantly fewer companies have disclosed comprehensive plans than have committed to reach net-zero or pledged to reach climate neutrality. There’s no quick fix towards achieving climate commitments, but companies need to understand and communicate their climate-related risks and opportunities and how they plan to meet their climate commitments.

In this Climate Week NYC event co-hosted by IFAC and A4S, we'll hear from finance leaders at various steps of their transition journeys and explore their perspectives on:

The Trustees of the IFRS Foundation have confirmed the appointment of seven organisations and representatives to the Sustainability Consultative Committee (SCC). This follows the completion of the International Sustainability Standards Board (ISSB) member appointments announced in August.

The SCC is formed of four permanent multilateral member organisations―the International Monetary Fund, the Organisation for Economic Co-operation and Development (OECD), the United Nations and the World Bank. Alongside these permanent organisations, seven additional expert members have now been appointed.

Leading Financial Market Participants Call for Stronger Alignment of Regulatory and Standard Setting Efforts around Sustainability Disclosure.

Clear, comprehensive and comparable disclosure of sustainability-related information is one of the foundational building blocks of a well-functioning global financial system. Financial market regulators should seize this historical and fast-closing window of opportunity to get it right by ensuring compatible standards.

Significant efforts by the International Sustainability Standards Board (ISSB), the US Securities and Exchange Commission (SEC), and the European Commission together with the European Financial Reporting Advisory Group (EFRAG), all aim to address the need to enhance and evolve corporate reporting to include and consider sustainability

GRI responds to IFRS Foundation’s creation of a new sustainability board and consolidation of CDSB and VRF into the foundation. Find out about our latest news, press releases and articles about reporting, sustainable development and organizational transparency.

The trustees of the International Financial Reporting Standards (IFRS) Foundation, the governing board of the International Accounting Standards Board (IASB) that develops IFRS, issued a consultation paper in September 2020 proposing to get into the sustainability reporting game.

Chartered Professional Accountants of Canada (CPA Canada) is encouraging leaders from the country’s private and public sectors to weigh in on important steps toward establishing a new international sustainability standards board.

The IFRS Foundation Trustees have launched a consultation relating to the governance and composition of a proposed International Sustainability Standards Board (ISSB). If established, the ISSB will develop a set of global standards for reporting on environmental, social and governance (ESG) matters.

Currently, there are multiple reporting frameworks related to sustainability and variability in reporting approaches. The business landscape has evolved to the point where a global common solution is needed. An ISSB will reduce complexity and establish a common playing field with high-quality global standards for ESG reporting. Importantly, this initiative has been strongly supported by international securities regulators.

The Trustees of the IFRS Foundation (Foundation) today published proposed amendments to the Constitution of the Foundation to accommodate the potential formation of a new International Sustainability Standards Board (ISSB) within the governance structure of the organization. In addition, the Trustees have published a Feedback Statement that summaries feedback received to their consultation on sustainability reporting.

Sustainability Frameworks & Standards: Sustainability Accounting Standards Board presents a summary of the Sustainability Accounting Standards Board’s industry-specific standards for identifying financially material sustainability issues. Written from a management accounting perspective, the report is the first of a series of briefs exploring sustainability, business and the finance professional’s key role. These briefs will aim to help organizations consider their sustainability issues and how to integrate them into their long-term decision making, as well as their internal and external reporting.

The Trustees of the IFRS Foundation met 2-4 March 2021 to continue their analysis and discussions of the feedback received to their Consultation Paper on Sustainability Reporting (2020 Consultation).

Feedback to the 2020 Consultation confirmed an urgent need for global sustainability reporting standards and support for the Foundation to play a role in their development. The Trustees are therefore continuing their work on the establishment of an international sustainability reporting standards board within the existing governance structure of the IFRS Foundation, as set out in the Trustees’ February announcement.

The Trustees of the IFRS Foundation met on 1 February 2021 to review responses to the first three questions asked by their consultation paper on sustainability reporting—demand for global sustainability standards, whether the IFRS Foundation should play a role, and, if so, the requirements for success in doing so. The responses indicate growing and urgent demand to improve the global consistency and comparability in sustainability reporting, as well as strong recognition that urgent steps need to be taken and broad demand for the IFRS Foundation to play a role in this.

Given this demand, the Trustees have agreed to undertake further detailed analysis of feedback on the requirements for success and other conditions to be satisfied prior to consideration of whether to establish a new board. The Trustees agreed the formation of a Trustee Steering Committee to oversee the next phases of work and added an additional key requirement for success—being the need for urgency to deliver global standards, most notably on climate.

The IFRS Foundation trustees issued a consultation relating to the governance and composition of a proposed International Sustainability Standards Board (ISSB). If established, the new board will develop a set of global standards for reporting on environmental, social and governance matters.

CPA Canada supports the IFRS Foundation’s proposal to create a new ISSB under its governance structure and we commend the IFRS Foundation for moving quickly on the establishment of an ISSB while ensuring it is set up to operate in an effective manner.

For businesses around the world, there has never been a greater focus on sustainability. Over recent years the degree to which sustainability is integrated into investment decision making and interactions between companies and their investors has increased significantly. There is, however, more to do to make engagement as effective as possible.

This is a practical guide written by investor relations (IR) teams for investor relations teams, with contributions from CFOs, IR Directors and investors. The guidance has been developed based on the practical experience of CFOs and IR teams from across the A4S CFO Leadership Network, insights from investors and other experts.

The Global Reporting Initiative (GRI) recently published its revised Universal Standards, which go into effect on January 1, 2023. The revision will require all companies reporting in accordance with GRI standards to report on human rights impacts and due diligence obligations. Some companies are already required to report on such human rights impacts under modern slavery legislation like the U.K. Modern Slavery Act or Australia Modern Slavery Act. Under the revised standards, any company reporting in accordance with GRI standards will need to report on human rights impacts regardless of whether they are subject to other human rights reporting regimes.

What is the IFRS Foundation and how does it serve the public interest? The IFRS Foundation is a not-for-profit organization created in 2001. It serves the public interest by developing globally accepted reporting standards that meet investors and other capital market participants’ need for transparent and comparable information to make economic decisions. Click here for more questions and answers.

An in-depth look at the first exposure drafts issued by the International Sustainability Standards Board. New proposals on the first IFRS® Sustainability Disclosure Standards mark the next step toward equal prominence for international sustainability and financial reporting. The proposals aim to create a global baseline for investor-focused sustainability reporting that local jurisdictions can build on.

Next Steps for the Accountancy Profession - With the establishment of the International Sustainability Standards Board, the way forward is clear: The accountancy profession must lead on climate reporting and other material environmental, social and governance disclosures and their assurance—contributing to strong and sustainable financial markets and economies and enabling the UN’s Sustainable Development Goals.

Click here to download any of the SASB Standards for 77 industries and the SASB Standards Application Guidance.

As of August 2022, the International Sustainability Standards Board (ISSB) of the IFRS Foundation assumed responsibility for the SASB Standards. The ISSB has committed to build on the industry-based SASB Standards and leverage SASB’s industry-based approach to standards development. The ISSB encourages preparers and investors to continue to provide full support for and to use the SASB Standards until IFRS Sustainability Disclosure Standards replace SASB Standards.

SASB Standards identify the subset of environmental, social, and governance issues most relevant to financial performance in each of 77 industries. They are designed to help companies disclose financially-material sustainability information to investors.

 

 

APPLICATION and GUIDANCE

Sustainability Reporting Alert: Scope 1 & 2 GHG Emissions

Sustainability Reporting Alert: Climate-Related Scenario Analysis

Tune into this two-part webinar to learn about the rapidly evolving sustainability landscape. Hear about recent developments in sustainability reporting and assurance standards and regulatory requirements, and the implications and opportunities for CPAs.

Prepare your entity for upcoming Sustainability Disclosure Standards issued by the ISSB with our suite of guidance and resources.

The following resources and guidance will help you navigate and prepare your entity for the upcoming Sustainability Disclosure Standards issued by the ISSB. You’ll find practical guidance and examples to help you get started.

In January 2021, the International Integrated Reporting Council published a revised International
Integrated Reporting Framework, which replaced the original 2013 version. In this Guide, the term
Integrated Reporting Framework refers to the International Integrated Reporting Framework (2021).

Preparers' guide to the IFRS Sustainability Disclosure Standards.These resources are designed to help integrated report preparers apply the ISSB Standards from next year.

March 22, 2023 - Session 3 - YouTube

The International Applicability of the #SASB Standards project is the first step in the #ISSB's ongoing commitment to maintain and enhance the SASB Standards. Find out more here: sasb.org/blog/what-you- https://www.sasb.org/blog/what-you-need-to-know-about-the-issbs-international-applicability-of-the-sasb-standards-project/

Companies operating globally will soon face mandatory sustainability reporting requirements, which must be audited. Initially, the checks will be less strict than for financial reporting, but that is expected to change.

The Corporate Reporting Webinar Series offers a deep dive into the International Sustainability Standards Board's (ISSB) two proposed standards, one on general requirements for sustainability-related disclosures and one on climate-related disclosures. We'll discuss how companies can start the groundwork, data gathering and processes for ISSB reporting by using tools already widely available for businesses and investors.

This report examines the importance of readily available, relevant, and reliable sustainability information for achieving better-informed decisions, enhanced strategic and risk management, and more thorough and valuable reporting to external stakeholders. It also highlights a range of emerging services that practitioners can provide to their clients, including advisory services, reporting, agreed-upon procedures (AUP) engagements, and assurance services.

Capital markets have emerged as one of the fastest growing and innovative market segments for ESG, fueled by ambitious sustainable finance commitments from leading banks and corporate issuers. With a growing number of instruments in the sustainable finance toolkit, cumulative issuance of sustainable debt has surpassed $3 trillion USD.

 

 

ARCHIVED RESOURCES

Can you measure the impact of mental health programs at work?
Two Canadian finance teams have taken on the challenge by implementing social and human capital accounting into their organizations to highlight how employees’ mental health is impacting their businesses

FRC calls for better climate-change disclosure and ESG reporting

The EY Global Corporate Reporting and Institutional Investor Survey finds a significant reporting disconnect with investors on ESG disclosures.
Companies continue to invest more time, resources and leadership effort into sustainability. However, there is still a significant disconnect between the expectations and goals of companies and their investors when it comes to corporate and sustainability reporting — in particular, the ESG disclosures that (along with existing financial statements) can help companies and their stakeholders to communicate and assess performance against strategic risks and opportunities in multiple dimensions.

CPAs are in an excellent position to lead sustainability efforts in their organizations. Learn how to apply a six-step process to implement United Nations’ (UN’s) Sustainable Development Goals (SDGs) into small and medium-sized enterprises (SMEs).

Private companies should consider ESG as a value driver and opportunity for competitive advantage.
In Brief:

ESG reporting is accelerating corporate sustainability efforts for public companies.
Private companies can follow the lead of public companies and make managing climate risk a top priority.
Although not currently required, addressing market changes, setting transparent goals and tracking progress on sustainability matters is critical for private companies.

Investors prize clarity about the initiatives companies are undertaking, the reporting they are doing—and the returns they will generate. Here’s how leaders can answer the bell.

As we write, on the eve of the COP26 climate change conference, powerful crosscurrents are confronting leaders charting a course for their institutions and the planet. One inescapable reality is that decarbonizing the global economy is a monumental task, with far-reaching economic trade-offs that will challenge countries, industries, companies, and individuals. Another is the growing impact of the environmental, social, and governance (ESG) movement, as it causes major investors, and the companies they hold in their portfolios, to rethink the risks of traditional business models, and the opportunities for more sustainable value creation in the future.

Achieving sustainability requires technology and innovation to transition and could be disruptive. An integrated mindset is key.

At its October 2021 virtual meeting, IFAC’s Professional Accountants in Business Advisory Group considered how accountants are contributing to value creation and sustainability in their organizations in both the private and public sectors. The report, The Role of Accountants in Mainstreaming Sustainability in Business, summarizes the key insights and learnings from the discussions amongst this global group of business and finance leaders, drawing from their diverse experiences and expertise.

This Guide to SASB Standards for Directors provides industry-by-industry guidance on how directors can use the SASB Standards to inform and enhance their engagement with management. SASB Standards identify the sustainability issues most likely to impact financial performance of companies in 77 industries. For every industry, this Guide suggests questions that facilitate a more complete and robust assessment of long-term risks and value creation.

The Value Reporting Foundation is a global nonprofit organization that offers a comprehensive suite of resources designed to help businesses and investors develop a shared understanding of enterprise value—how it is created, preserved or eroded over time.

The resources - including Integrated Thinking Principles, the Integrated Reporting Framework and SASB Standards - can be used alone or in combination, depending on business needs. These tools, already adopted in over 70 countries, comprise the 21st century market infrastructure needed to develop, manage and communicate strategy that creates long-term value and drives improved performance.

The focus on ESG matters is continuing to grow, with increased attention being paid by a wide variety of stakeholders. Boards need to be knowledgeable and engaged in the oversight of ESG matters.

Recognizing that this is a vast and complex area, this document provides a practical step-by-step approach and related resources that boards at any stage of their ESG oversight journey can benefit from in their oversight of ESG matters.

In fulfilling their oversight role, we expect that boards will need assistance from management. As a result, this framework can also serve as an important resource for management when engaging in discussions with boards regarding their oversight of ESG matters.

Today we are pleased to announce that a revised version of SASB XBRL taxonomy is now available for public use. This version incorporates technical adjustments and corrections that were incorporated based on comments we have received on the draft version of our taxonomy. In addition, we are also pleased to announce the formation of the Taxonomy Review Committee (TRC) that will help us manage and govern the taxonomy on an ongoing basis. Our hope is that the TRC will have broad market participation across the data production to data consumption spectrum to help us ensure that the taxonomy meets the needs of the market.

We are thankful and appreciative of the feedback and comments we have received on our draft taxonomy. We are also very thankful for the engagement with PwC and their initial support in the release of the updated version of the XBRL taxonomy.

Take advantage of CPA Canada and external resources to help you understand and address sustainability considerations for audit and assurance.

An increasing number of entities are providing information on their sustainability or environmental, social and governance (ESG) performance. This is driven by a variety of factors, including growing investor and stakeholder demand, and new regulatory requirements.

Assurance is an important component of this evolving reporting landscape and we expect demand for third-party sustainability assurance services to increase in the future. Assurance providers may also be called upon to evaluate an entity’s sustainability reporting controls and processes, as well as provide advice on sustainability-related reporting and compliance obligations.

To help you navigate this rapidly changing landscape, we have compiled an inventory of information resources related to sustainability assurance and reporting. New content will be added regularly.

With global sustainability standards on the horizon, listen to this webinar for an introduction to sustainability reporting and to learn about a CPA's role in third-party assurance over sustainability information, including Canadian and global trends.

A growing number of entities are reporting information on their sustainability or environmental, social and governance (ESG) performance. Currently in Canada, assurance over sustainability information is voluntary; however, as we move toward global sustainability reporting standards, demand for independent assurance over sustainability information will likely increase. It is critical for Canadian practitioners to understand the impacts to their clients' business activities and assurance needs.

This webinar provides an introduction to sustainability reporting and assurance and highlights current Canadian and global trends to help you stay abreast of developments in this rapidly changing environment.

Sustainability is everybody’s business.

EY is committed to helping business create value for sustainability as well as helping sustainability create value for business – reframing how business approaches sustainability and putting it at the center of how value is created.

We call this Value-Led Sustainability – a way of protecting and creating new sources of value – for business, people, society and the world as a whole. And that makes it everybody’s business.

Explore our global insights below on some of the key sustainability and ESG challenges organizations face today and learn how your business can help build a better, more sustainable working world.

The International Integrated Reporting Framework is used to accelerate the adoption of integrated reporting across the world with an aim to:

Revisions to the Integrated Reporting Framework were published in January 2021 to enable more decision-useful reporting. The revisions, the first since the Integrated Reporting Framework was originally published in 2013, are the result of extensive market consultation with 1,470 individuals in 55 jurisdictions. The consultation demonstrated that the conceptual thinking and principles of the Integrated Reporting Framework remain fit for purpose and robust.

We have issued Sustainability Assurance Alert: A CPA’s Role in Third-Party Assurance over Sustainability Information to raise awareness to assurance providers about the impact of increased interest in and reporting on sustainability information. Significant developments towards a set of global sustainability standards continue to take place. In November, the creation of an International Sustainability Standards Board (ISSB) was formally announced by the IFRS Foundation. This board will be responsible for the development of a comprehensive global baseline of high-quality sustainability disclosure standards to meet investor needs.

To compliment our guidance we have created three board engagement tools. These tools identify ways to engage the board outside of the regular board meetings and help board members make informed decisions and establish accountability.

Today, the International Federation of Accountants (IFAC) published a revised building blocks approach to reporting sustainability information—enhancing its previously issued roadmap, The Way Forward. IFAC hopes to foster discussion on how this approach can deliver a global system for consistent, comparable, and assurable sustainability-related information that best meets the needs of investors and other stakeholders.

IFAC CEO Kevin Dancey said, “As the IFRS Foundation continues to consider establishing a new International Sustainability Standards Board and as jurisdiction-specific initiatives progress, IFAC is lending its voice to clarify how components can best fit together to meet the needs of all stakeholders. The IFRS initiative—as well as jurisdiction-specific initiatives—should build on what already exists, help create or contribute to a global system, and accommodate different views of what information stakeholders require. The building blocks approach makes this possible.”

IFAC supports a new standard-setting board under the IFRS Foundation that can lead to the coordination and harmonization of reporting and provide a baseline of requirements addressing sustainability information that is material to enterprise value. The IFRS Foundation has proposed amendments to the Constitution of the Foundation as it continues to consider establishing a new board. IFAC encourages its member organizations to submit comments to this IFRS Foundation consultation.

IFAC welcomes feedback on the building blocks approach and plans to engage with stakeholders at future IFAC events addressing the broader journey to an enhanced corporate reporting world.

The attention on how companies manage and communicate their sustainability impacts has never been greater. In response to the growing interest of various stakeholders in how companies are managing their impacts, sustainability reporting has continued to grow rapidly. At the same time, the range of impacts that stakeholders seek to better understand has also continued to evolve. Most recently, we have seen additional focus on many different issues, from the impacts of business on nature, to persistent issues around inequality – be it economic, racial or gender inequality – to the accelerating impacts of climate change.

The CAQ examined the most recent publicly available1 ESG data for S&P 100 companies. Here are the key takeaways:

Read in depth to examine how many companies reported ESG information, what frameworks and standards were commonly used and if the company obtained assurance or verification over any of their ESG information.

At its March 2021 meeting last week, the IAASB approved Non-Authoritative Guidance on Applying ISAE 3000 (Revised) to Extended External Reporting (EER) Assurance Engagements, which will be published in April. This guidance marks a significant step forward in supporting the evolving field of assurance for non-financial reporting. EER encapsulates many different forms of reporting, including, but not limited to, sustainability or ESG (environmental, social and governance) reporting, integrated reporting, reporting on corporate social responsibility, greenhouse gas statements, and service performance reporting in the public sector.

Extended external reporting encapsulates many different forms of reporting, including, but not limited to, sustainability or environmental, social and governance (ESG) reporting, integrated reporting, reporting on corporate social responsibility, greenhouse gas statements, and service performance reporting in the public sector.

The global discussion around non-financial information reporting is evolving seemingly every day and organizations are increasingly reporting on their broader performance and impact. While historically voluntary, this type of reporting and assurance is increasingly mandated by law or regulation. Investors and other decision makers need a broader base of information to inform capital allocation and other decisions, including an expectation that reported information is reliable. As reporting evolves, there is a corresponding increase in demand for assurance engagements on such new extended types of reporting.

ESG Reporting and Attestation: A Roadmap for Practitioners offers a blueprint for auditors to support companies in achieving their environmental, social and governance reporting goals. The report provides tools to help auditors advise their clients on their approach to ESG disclosures and help them determine whether to seek an attestation report on ESG information. The guide also helps auditors determine how to report ESG information in Securities and Exchange Commission submissions.

What does it take to be a sustainability professional in the financial services industry? That was one of the themes that the Institute of International Finance (IIF) and Deloitte explored during a February 10 webcast on the future of the chief sustainability officer. The agenda included a panel discussion about the skills that an effective chief sustainability officer (CSO) needs to have.

Global securities regulators are calling for swift action to develop more consistent and useful sustainability disclosure standards. Following a meeting to review the work of its Sustainable Finance Task Force over the past year, the International Organization of Securities Commissions (IOSCO) said it sees an “urgent need” for global standards that “improve the consistency, comparability and reliability of sustainability reporting.”

Canada has been trailing behind global developments in sustainable finance, though serious work – particularly in the private and not-for-profit sectors – is underway to develop and implement plans that support a sustainable outcome. If the sustainable finance market is to expand, Canada must provide comprehensive data and information and also offer policy and regulatory certainty for both providers and users. This report offers recommendations in four key areas.

This report looks at the evolving role of the Chief Sustainability Officer (CSO) in the financial services industry. We explore why some firms have CSOs and others do not, the typical mandate of the role, the skills needed to deliver that mandate, and various governance models.

Consultation Paper on Sustainability Reporting is published by the IFRS Foundation Trustees for comment only. Comments need to be received by 31 December 2020 and should be submitted by email to commentletters@ifrs.org or on the ‘Open for comment’ page at www.ifrs.org/projects/ open-for-comment/.

All comments will be on the public record and posted on our website at www.ifrs.org unless the respondent requests confidentiality. Such requests will not normally be granted unless supported by a good reason, for example, commercial confidence. Please see our website for details on this policy and on how we use your personal data.

ISS ESG, the responsible investment arm of Institutional Shareholder Services Inc. (ISS), today launched ISS ESG Scorecards, an intuitive and interactive scoring tool enabling financial institutions, including private equity firms, to conduct custom and comprehensive ESG performance and risk assessments of private companies. Nineteen industry-specific ESG Scorecards are currently available with additional industries to be added on a going-forward basis.

ISS’ ESG Scorecards facilitate industry-specific scoring of a private company’s ESG risk profile, drawing on the long-established and rigorously developed ISS ESG Corporate Rating methodology. Kristina Rüter, Managing Director and Global Head of Methodology at ISS ESG said: “The methodology takes into consideration the entire value chain and materiality is reflected in the configuration and weight of each element while standardized assessment factors facilitate consistent and comparable assessments.” Use cases for ESG Scorecards include the assessment of ESG risk exposure of investee companies during due diligence processes for private equity portfolios, the evaluation of ESG risk during credit risk assessment, and to facilitate engagement with private companies regarding sustainability.

VRF Offers Corporate Directors’ Guide to Sustainability Standards - The Value Reporting Foundation, the group overseeing the Sustainability Accounting Standards Board and the International Integrated Reporting Council, has released a "Directors’ Guide to the SASB Standards" with industry-specific guidance on how boards of directors can use SASB standards.

The standards deal with the sustainability issues that are most likely to affect financial performance of companies in 77 industries. For every industry, the guide suggests some questions to help corporate directors assess the long-term risks facing their organizations. The questions in the guide are based on disclosure topics and accounting metrics in the 77 SASB standards.

 

 

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