Leading accounting bodies are among organisations who have requested corporate and asset owner action along with revised reporting on the UN Sustainable Development Goals (SDG) to hit targets for 2030.
“They need to be thinking about opportunities, as well as thinking about risks isn’t enough,” says Carol Adams, Professor of Accounting at Durham University Business School. “They need to be thinking about how they can change –not just thinking about what value they’re creating, but also about what value they might be destroying through some of their activities. This means disclosing negative impacts as well as positive impacts on achieving the Sustainable Development Goals.”
Adams co-authored a report entitled Sustainable Development Goals Disclosure (SDGD) Recommendations with Paul Druckman and Russell Picot, Honorary Professors at Durham.
Published earlier this month, the recommendations include advice for businesses and organisations to address sustainable development issues associated with reporting frameworks. Accounting and finance professionals, sustainable experts, academics, consultants, framework and standard setters, asset owners and managers were among those that took part in producing the SDGD Recommendations.
UN SDGD Recommendations
While a lack of focus on sustainability could impact practices, Adams suggests more detail could be forthcoming across businesses.
“When I read an assurance statement of a sustainability report, I’m interested to see the evidence they have relied on and what recommendations they make to the organisation for the future,” she says. “You don’t necessarily do that in financial audit, but in sustainable reports, these matters are of interest to a wide range of stakeholders that do affect the ability of the company to survive in the long term.”
The recommendations are aimed at establishing a better practice for corporate reporting on the SDGs and promote effective and standardised reporting, along with wider transparency on climate change, social, and other environmental impacts.
“I think assurance practice is something that could be developed. The big accounting firms could try and find ways they can add enhance credibility of sustainable reports in a more cost-effective way.”
“There needs to be evidence that this is being discussed – the senior management and board subcommittee meetings and legal actions that accountants are doing in terms of having actual internal controls and systems. They are more invested in the internal control and internal audit system for financial matters than for sustainability.”
The recommendations suggest organisations incorporate sustainable development risks and opportunities within their long-term value creation strategy and disclose the potential impacts on the success of the UN SDGs.
Widespread support is required to fulfil the requirements, however.
“Achieving the SDGs requires dedication from business, and the urgency continues to grow,” said Kevin Dancey, CEO at the International Federation of Accountants (IFAC), in a press release. “We fully support global best practices that enable effective, transparent reporting on sustainability measures. It’s imperative that we act together and that we act now to secure a sustainable future.”