'The distinct and credible reporting of ESGs – environmental, social and governance disclosures – have an important part to play in encouraging a positive approach to sustainable development by business and the adoption of long-term and socially responsible investment strategies by investors' said Martin Turner, ACCA’s Vice President, in his opening statement at the Sustainable Stock Exchanges 2012 Global Dialogue Summit in Rio on 18 June.
Martin Turner’s comments were aired at a session which ACCA had co-sponsored with Aviva Investors, organised ahead of the full Earth Summit or the Rio+20 conference, which starts on 20 June. ACCA is focussing its hopes on a positive outcome regarding paragraph 41 in the ‘zero draft’ about the integration of sustainability information into the corporate reports of listed and large private companies.
While pointing out the need for consistency in ESG reporting, Mr Turner also said that sustainability reporting needs global buy-in, adding: 'We have to move forward on the basis that we aim to achieve a reporting framework which provides meaningful information to users everywhere and is also flexible enough to accommodate substantial differences in cultural and legal practices which may exist in different countries.
'To get to the point where we have a framework that all countries can sign up to, we therefore need to ensure that we engage actively with regulators and investors – to ensure that we require the sort of disclosures that will make a difference to them – and also involve as broad a geographic spread of stakeholders as we can manage in the process of developing standards.
'ACCA believes there is a positive and vital role for accountants to play in ensuring that ESGs provide meaningful information to stakeholders, with the aim of encouraging a more holistic approach to risk management by reporting companies.'
Along with Martin Turner, representatives from Aviva Investors, the Istanbul Stock Exchange, CERES and Banco de Brasil DTVM were on the panel, with James Gifford, executive director of Principles for Responsible Investment as the moderator.
ACCA recently published a paper which looks at the possible changes to the ‘zero draft’. The paper also includes a series of expert views on this issue from our Global Forum for Sustainability members and other voices from the accountancy profession. The Forum was established in 2011 to bring together leading thinking on sustainability and the role of accountants.
Martin Turner concluded: 'Accountants can play a major part in ensuring ESGs are worthwhile and meaningful to stakeholders so they can see exactly how beneficial this information is. But what is clear for ACCA is that a framework needs to be put into place to make this happen, which will help businesses to flourish wherever they are based.'