TechTalk Blog - SUSTAINABILITY/ NON-FINANCIAL DISCLOSURE BY PUBLIC COMPANIES BECOMING GLOBAL REALITY

By David Colgren posted 06-01-2016 10:20 AM

  

Great article from the global law firm of Baker McKenzie about mandatory requirements from securities regulators for public company sustainability disclosure that also needs to be included in financial reporting as a company “best practice.”

 CFOs, financial reporting teams and management accountant responsibilities are going to become much more broaden as corporate social responsibility tasks are expanded under this C-Suite. Supply chain management and verification relating to human trafficking and child labor will become a reality for most USA companies. Management accountants will play an increasing role in providing verification, collection and calculations of vendor sustainability stats such as energy or resource usage and human capital and natural capital calculations for overall reporting. 

Brad Monterio has detailed what some of these additional responsibilities might include in a recent article on this topic: “Beyond the Balance Sheet – Non-Financial Reporting, Material Disclosures and the Quest for Sustainability”

According to the Baker McKenzie article the European Union countries, China, India, France and South Africa have mandated sustainability reporting as part of public company disclosure. UK and Germany are planned on requiring public companies to issue sustainability reports by yearend.

Will the more than 14,500 public companies in the United States be next?

The IMA and the Sustainability Accounting Standards Board (SASB) have recently partnered on this topic and more than 50 of the largest US companies are beginning to use the SASB reporting framework for non-financial reporting. Many companies are beginning to prepare in anticipation of the discussed US SEC pending sustainability reporting rule for US public companies.

Today - Michael Bloomberg, Chair of the SASB and CEO of Bloomberg and former Mayor of New York City is working with various global leaders in his capacity with the UN to support public company disclosure of sustainability, diversity, natural capital and human capital metrics to support capital market initiatives to address climate change/global warming.

 The nation’s largest pension fund – Calpers is pushing for sustainability reporting of public companies as a best practice using the SASB reporting framework in this recent article.

We are also supportive of the use of the Extensible Business Reporting Language used by the US SEC for financial data transparency and accountability for sustainability data released by public companies that will link financial reporting with sustainability reporting to easily compare both information sets for integrated reporting by public companies. This will be a major leap forward for integrated reporting that will also broaden the skills of management accountants.  

Stay tuned. Accountants can make a difference both to the companies they serve and the public/stakeholders companies serve in order to operate in a long-term sustainable manner.  

  



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