COP28: Accounting bodies call for action on climate-related reporting disclosures

Leading global finance professionals have underscored the pivotal role of sustainability disclosures, calling for action at COP28 being held in Saudi Arabia this week.

In  a statement,  ACCA, IOSCO, IFAC, and ISSB called for concerted action to meet market demands for climate-related reporting disclosures. Specifically, they urged regulators to ensure sustainability reporting can help provide better information for those driving climate action across the business world.

With the introduction of international sustainability standards from the ISSB – coming into effect in 2024 providing a widely supported reporting baseline – global bodies called for a focus on achieving adoption across the world through the development of skills, capacity and the sharing of knowledge.

The accountancy profession has a critical role to play in climate action, both to lead long-term value creation within sustainable economies, and to champion responsible practices in the public interest.

During a panel at the climate conference on December 4, Helen Brand, Chief Executive of ACCA, said: ‘Consistent and comparable sustainability reporting will drive change and unlock new opportunities not only for businesses, but for the investor community and other stakeholders.

‘The accountancy profession has a central role in harnessing these new standards to drive positive action to combat climate change, to help create a better, more sustainable world.”

Alongside the statement, ACCA published a guide for businesses to help them prepare for the move to more comprehensive sustainability reporting.

It details eight key stages in the sustainability reporting cycle, which include allocating responsibility, establishing the reporting landscape, determining material sustainability-related information for reporting, determining data requirements, collecting data, reporting on the collected data, implementing reporting, and verifying what is reported for continual improvement.

1. Allocating Responsibility: Assigning a team or individual to oversee the reporting process.
2. Establishing the Reporting Landscape: Understanding the scope and context of reporting, including stakeholders’ expectations.
3. Determining Material Sustainability Information: Identifying key sustainability issues relevant to the organisation and stakeholders.
4. Determining Data Requirements: Establishing what data needs to be collected to address the material sustainability issues.
5. Collecting Data: Gathering the necessary data, ensuring its accuracy and reliability.
6. Reporting on Collected Data: Compiling and presenting the data in a clear, coherent report.
7. Implementing Reporting: Integrating the reporting process into the organisation’s operations.
8. Verifying Reported Information: Ensuring the credibility of the report through verification and continuous improvement.

Accountants navigating sustainability reporting can glean key insights from the guide.  Paramount is the precision in data collection – both financial and non-financial – ensuring robust sustainability reports.

Grasping materiality helps in identifying significant sustainability aspects relevant to stakeholders. Integration with traditional financial reporting is crucial, showcasing the overlap and complementarity of both domains.

Technology’s role in streamlining processes and compliance with evolving regulations is also a focal point for accountants in this arena.

Continued support from industry

Since 2019, IFAC has been advocating for international sustainability standards, including calling for the formation of the ISSB.

Asmaa Resmouki, President of IFAC, said: ‘On behalf of my colleagues at IFAC, we are delighted to be able to leverage our significant convening power to bring together the most important stakeholders – including especially the global accountancy profession – to help drive demonstrable climate action.

“We will continue our support of the development, adoption and implementation of the ISSB’s standards by professional accountants globally, and we welcome the role and responsibility that professional accountants have in this endeavour.”

Participation in COP28 is part of a broader effort from the global accountancy profession to engage with the United Nations. IFAC is an official observer organisation to the United Nations Framework Convention on Climate Change (UNFCCC).