Fresh Research indicates a Swell in Reporting Policies

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Integrated reporting demonstrates the linkages between an organization’s strategy, governance and financial performance in addition to the social, environmental and economic context within which it operates. By reinforcing these connections, integrated reporting can aid businesses to take more sustainable decisions while enabling stakeholders understand how an organization is really performing.

The sustainability reporting practice has become essential to global action on environmental and social issues, and has also influenced policies, regulations, standards and other instruments that call for or encourage organizations to report.

GRI, the United Nations Environment Programme (UNEP), KPMG International, and The Centre for Corporate Governance in Africa, released the 4th edition of Carrots & Sticks during the 5th GRI Global Conference last month, depicting the most comprehensive picture of the global sustainability regulatory landscape. A dedicated conference session was also held to discuss the findings of the research.

It can be said that the number of sustainability reporting instruments around the world has more than doubled in the past three years alone. The 4th edition of Carrots & Sticks considered 71 countries and identified 64 countries with policies in place, and a total of almost 400 policies.

The upsurge in policies has been driven largely by the strong growth in Europe, Asia Pacific and Latin America. Whilst the key policy actor among emerging markets was found to be stock exchanges, in developed markets, the drive came largely from governments.

All in all, the research identified 223 government-issued sustainability reporting instruments around the world, while over 100 were issued by stock exchanges and financial regulators. Of all the reporting instruments, 65% were mandatory and 35% voluntary, with one in ten utilizing a ‘comply or explain’ approach.

What does it mean for businesses and the future of reporting?

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