Sustainability reporting/Triple-bottom-line reporting. There are a number of aca
ID: 2476007 • Letter: S
Question
Sustainability reporting/Triple-bottom-line reporting. There are a number of academic articles about sustainability reporting. However, most of them look at whether the company offers a report or how many words long it is. I have not read many sustainability reports, so I feel largely clueless about the content.
a. Super short topic: Is integrated reporting the same thing as sustainability reporting? If not, how do the two concepts differ?
b. Is there an opinion letter, say from an auditor, about the content of the report? Do the contents seem to be something that an outside party could check on or not?
c. Using a couple of different companies’ reports, do the different reports generally discuss the same topics or is each report a unique story about the firm?
d. Brazilian social accounting: Brazilian companies with public stocks have some special disclosure requirements; I think that they must provide some measure of the value added to various stakeholders. I think these groups include investors (with traditional financial reports), workers, and society (potential via governmental taxation, but I feel like there is probably a broader definition). How do firms calculate these values? Do the auditors express opinions on those reports?
Explanation / Answer
Answer
Answer a
Super short topic: Is integrated reporting the same thing as sustainability reporting? If not, how do the two concepts differ?
Sustainability Reporting is
Integrated Reporting is
Sustainability Reporting is about communicating the organisation’s approach to managing its key environmental and social issues. It is about communicating publicly how the company assesses which environmental and social issues are most significant to the company, how these issues are managed and how the company is performing against each of these key issues. Climate change, talent retention and employee diversity can pose both risks and opportunities for companies, so it is about communicating how the organisation is identifying and managing these risks and opportunities.
Integrated reporting is about communicating, how the company manages its long term value creation by taking an integrated approach to both traditional risks and these wider sustainability risks. Integrated Reporting intends to show how the company integrates environmental & social thinking into its business. An integrated report goes beyond financial, employee, environmental and social data to demonstrate how the company integrates these broader risks and opportunities into its long term strategy, into its risk management, into operating policies and procedures, and what the trade-offs between these issues are. This means integrated reporting pulls together information that sits in separate reporting strands to explain how the firm creates value.
Differences between Sustainability Reporting and Integrated Reporting
It is worth noting that sustainability reporting targets a wider stakeholder audience than integrated reporting which focuses primarily on providers of financial capital, particularly those with a long term future view & focuses on impacts on the environment, society and the economy, rather than on the effects of the capitals on value creation over time, as in Integrated Reporting.
As such, sustainability reporting is less likely to focus on the connectivity between various capitals or the strategic relevance of the capitals to value creation, and is more likely to include many disclosures that would not be material for inclusion in an integrated report.
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