The integration of sustainability (also known as environmental, social and governance (ESG) or corporate social responsibility (CSR) factors into corporate and investment decision making has been gathering momentum, with increasing social, market and regulatory calls for these non-financial disclosures to be given the same level of scrutiny as financial ones. There is also increasing demand from (especially institutional) investors for greater transparency on these matters in order to properly assess investment risk, in particular for those areas that are harder to quantify or that have complex boundary issues.[1] [2]

Businesses with strong sustainability scores show better operational performance, and sustainable investment strategies consistently outperform comparable non-sustainable ones. The significant social and market pressure for robust and credible ways to measure sustainability is set to expand.[3]

In late 2015, the Australian Securities Exchange (ASX) Corporate Governance Principles and Recommendations were broadened to provide guidance for sustainability reporting.[4] These expanded rules require ASX-listed entities to disclose and manage “any material exposure to economic, environmental and social sustainability risks.”

The 2017 report by The Australian Council of Superannuation Investors (ACSI) noted significant increases in sustainability reporting disclosures by the ASX200:

  • Companies reporting the highest levels of sustainability reporting increased from 39 in 2008 to 101 in 2016; and
  • Companies that did not provide sustainability reporting at all in their annual reports almost halved from 31 in 2008 to 16 in 2016.

The combination of social and market pressures will undoubtedly continue to mount, requiring businesses and organisations to engage more widely with internationally recognised frameworks such as: the Global Reporting Initiative (GRI) Sustainability Reporting Standards; and the UN’s Sustainable Development Goals (SDGs), both of which we use to provide structured, precise, evidence-based solutions for our customers.

We help businesses commit to ongoing ethical and sustainable operations, responsible investment, innovation, risk management and opportunity through our consistent, accurate and credible sustainability evaluation, monitoring and reporting services. Working closely with our customers to identify, measure and communicate sustainability risks and opportunities, we help them to build strategies adapted to their specific challenges, anchored in realistic thinking and supported by clear, tangible, actionable targets.

Click here to learn more about sustainability reporting.

__________
[1] Gourley, Geoff. 2017. How corporate Australia is embracing Sustainable Development Goals. Published on November 27, 2017. http://oneten.com.au/blog-archive/2017/11/27/how-corporate-australia-is-embracing-sustainable-development-goals
[2] Klettner, A (2011) The Governance of Sustainability, research paper produced for Catalyst Australia Inc., and Catalyst (2011) Steering Sustainability http://www.catalyst.org.au/documents/full-disclosure/Steering%20Sustainability%20Centre%20for%20Corporate%20Governance%20Report%202011.pdf
[2] Indeed, the growth of international organisations such as the UN Global Compact, the UN-backed Principles for Responsible Investment (UN PRI), the Carbon Disclosure Project (CDP), the European Union’s “Beyond GDP” Initiative, the Sustainability Accounting Standards Board (SASB), Financial Stability Board, Global Impact Investment Rating System, Sustainable Stock Exchanges Initiatives, The Forum for Sustainable and Responsible Investment and Eurosif illustrates the increasing focus on sustainability monitoring, evaluating and reporting as a significant global trend.
[4] http://www.asx.com.au/documents/asx-compliance/cgc-pnr-and-recommendations-3rd-edn.pdf; CPA Australia (2012), A Guide for Assurance on SME Sustainability Reports. https://www.cpaaustralia.com.au/~/media/Corporate/AllFiles/Document/professional-resources/auditing-assurance/guide-assurance-sme-sustainability-reports.pdf