TechTalk - EU NATION COMPANIES MOVE FORWARD WITH NON-FINANCIAL REPORTING TO ACTIVATE THE CAPITAL MARKETS TO BRING CHANGE

By David Colgren posted 01-24-2017 02:48 PM

  

Great article about UK’s new narrative reporting framework for listed companies, banks and insurance enterprises with more than 500 employees that went into effect for financial reporting periods on or after January 1, 2017.

Companies, banks and insurance enterprises will be required to report environmental, social and employee-related matters as well as the companies respect for human rights and anti-corruption and bribery matters.

This additional non-financial disclosure will help to address material risks associated with these topics that are showing greater and greater interest from the investment/pension community through impact investing/responsible investing.

iXBRL is currently being used to data tag financial information of public companies in the world's capital markets for greater transparency and analysis for the public. We will have to see if this same data tagging and linking information (iXBRL) will be applied to non-financial information companies also disclosure to the capital markets supported and developed by the IMA and other XBRL consortium members. Stay tuned...

We will see how this plays out in the United States. In the EU there are approximately 6,000 public companies compared to approximately 14,000 public companies in the United States.

Will this additional non-financial disclosure put these companies at a greater advantage and target for investment from the global community related to their enhanced transparency and accountability?

This article just published talks about the expanding investment marketplace for companies moving forward with addressing climate change, human rights and anti-corruption and bribery matters.

“US sustainable, responsible and impact (SRI) investing continues to expand. The total US-domiciled assets under management using SRI strategies grew from $6.57 trillion at the start of 2014 to $8.72 trillion at the start of 2016, an increase of 33 percent, as shown in Figure A. These assets now account for more than one out of every five dollars under professional management in the United States.”

Other markets are moving in a similar path as the capital markets begins to recognize the importance of climate change/ human trafficking and child labor reputation/risk disclosure. 

  • More than 200 million children today are child laborers. An estimated 120 million are engaged in hazardous work.
  • 73 million of these children are below 10 years old.
  • The highest number of child laborers is in sub-Saharan Africa.
  • The number of children in armed conflicts have risen to 300,000 over the past decade.
  • Most children work on farms that produce consumer products such as cocoa, coffee, cotton, rubber and other crops.
  • 20 million child workers are employed in factories that make garments, carpets, toys, matches and hand-rolled cigarettes.

http://www.theworldcounts.com/stories/Child-Labor-Facts-and-Statistics

The following stock exchanges from around the world are supporting the sustainable stock exchanges initiative to encourage companies to report this important non-financial information to shareholders and investors.

Stay tuned as we learn more about how management accountants are helping organizations prepare and implement non-financial reporting and auditing supply chain management related to human trafficking and child labor.



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