Original Source: Green Biz
“Numerous external forces are converging to create increased awareness of environmental, social and governance (ESG) factors.
These forces are challenging CFOs to reconsider a traditional reporting model that may not effectively meet today’s information needs. Today, 60 percent of CFOs at large global enterprises with average annual revenue of at least $17 billion, believe sustainability challenges will change financial reporting and auditing.
Of the 250 largest companies in the world (G250 companies), 95 percent now issue separate sustainability reports [PDF]. Moving forward, there likely will be greater alignment of traditional financial reporting and reporting on ESG topics. The International Initiative for Integrated Reporting (IIRC) is proposing integrating the disclosure of standard financial information with ESG information to provide a more complete view of the commercial, social and environmental context within which a company operates [PDF].
Importantly, integrated reporting likely will require reporters to make valuation impacts of ESG information more explicit.
Right now, often a disconnect exists between what ESG information companies disclose to their stakeholders and the data that actually drives management and investment decisions. Most agree that it is hard to know which information is business-critical for the long run.
For these reasons, focus is increasing in the sustainability world on the principle of materiality as the essential filter for determining which ESG information will be useful to key decision makers. The Global Reporting Initiative (GRI) has placed materiality at the center of ESG reporting in its most recent G4 sustainability reporting guidelines…”
https://www.greenbiz.com/blog/2014/01/28/materiality-drives-sustainability-reporting
Contributors: Open SourceCategories: Industry Articles, SIG U Resource
SRC Type: Sourcing Management, Sustainability