Hello and welcome to our series of short recordings addressing the people, process and technology necessary to implement sustainability reporting.

I am Hsiao Mei Chow, Head of Corporate Reporting Insights Sustainability at ACCA, and I have with me here today my colleagues Rachel Johnson, ACCA’s Head of Risk Management and Corporate Governance, and Alexandra Zaronina-Kirillova, ACCA’s Head of SME.

In today’s session, we will focus on the process and responsibility for sustainability reporting, which are covered in stages 1, 2 and 7 of our sustainability reporting cycle.

We will also explore what will most likely change about an organisation’s governance framework to support its sustainability reporting, as well as how a less well-resourced organisation might cope with such changes.

Now, one important point to keep in mind when implementing sustainability reporting is that collaboration is vital. This cuts across the whole organisation. Whether we’re talking about senior management, technologists, human resources, talent developers or, of course, professional accountants, all have a role in engaging with the stages of the sustainability reporting cycle, which underpin the preparation of sustainability-related information and reports.

Professional accountants, in particular, are well placed to lead organisations along their sustainability reporting journeys while keeping ethics at the front of mind.

So, as a first step, what do you need to do?

Well, you start with what you’re already familiar with. Leverage your organisation’s existing financial reporting process. This is about getting your house in order and thinking through what you need to add, change or remove for your organisation to provide relevant, useful, comparable, reliable and consistent information to enable primary and other users to make informed decisions.

Also think about which functions along your organisation’s financial reporting process have a role, or should have a role, in preparing sustainability-related information — from risk management, finance, human resources and technology to operations and supply chain management.

This includes figuring out who does what: who in your organisation, along this process, is responsible, accountable, consulted and informed.

Identify, decide and document who these people are, as this will create clarity throughout your organisation by ensuring that everyone is always on the same page.

So, for a smaller or less well-resourced organisation, this is likely to be simpler. The reporting process might be the same as for financial reporting, or be completely outsourced. Perhaps the roles of those who are responsible, accountable, consulted and informed may be consolidated into one person or a small number of people.

Next, let’s talk about the reporting landscape.

Corporate reporting applies a building-blocks approach, layering sustainability-related and other disclosures on top of financial disclosures, some of which will be mandatory.

Disclosure requirements might be industry-specific or apply at international, regional and/or national jurisdiction levels.

But how do you know which reporting requirements apply?

You will need to first understand your organisation and its environment. For example, you can ask questions like:

Which jurisdiction does the organisation carry out its activities in?

What legal forms does the organisation operate through?

Which industries is the organisation involved in?

Then, with this understanding, identify which reporting frameworks are relevant and what guidance exists for each of these.

With this information at hand, you will be able to identify and focus on your organisation’s priority areas. Which reporting requirements would be most important for your organisation?

For example, your organisation might prioritise mandatory requirements, but also consider other non-mandatory requirements, which can unlock potential synergies in the short, medium and long term.

For much of this stage, a smaller or less well-resourced organisation might choose to collaborate with other similar organisations.

Now let’s move on to how to implement what we have talked about.

Successful implementation of any process, in particular one that brings changes as major as sustainability reporting, will depend on three key enablers:

Creating a formal implementation plan.

Using technology as an enabler.

Working with people as enablers.

For today, we will focus on the first element, which is creating a formal implementation plan.

This plan needs to consider elements such as:

1. Systems development.

You’ll need to set appropriate timescales to build the necessary systems and processes to support them.

1. Enhancing standard operating practices and procedures.

These should incorporate timescales for sustainability-related data collection and verification.

For example, specify when data needs to be updated centrally at a designated time, so that your organisation’s reporting team will know when to look out for updated or new requirements.

In setting such timescales, you might find it useful to align this timing with timelines for financial, sustainability-related or other corporate reporting.

This can help build an internal discipline for data collection among your organisation’s various reporting teams.

1. Establishing a reporting hub.

This should comprise an interdisciplinary team of individuals charged with developing and maintaining your organisation’s overall corporate reporting process.

What’s important here is that this hub needs to have the right levels of authority and capabilities to set organisation-wide minimum standards, be it relating to controls, data collection or evidence requirements.

This includes determining whether data collection happens at site, industry, country or regional levels.

And last but not least, hold awareness sessions for internal and external stakeholders and provide training for those expected to use the new systems.

I’d like to emphasise here that organisations need to take non-financial reporting just as seriously as financial reporting.

Ultimately, regardless of how good the systems or processes in place are, they will only be as good as the people who input the data.

So make sure that the capability and rigour are built into your organisation’s processes to ensure that the data input into the system is of quality and can be used to meet your organisation’s reporting and decision-making needs.

And so now I’d like to turn to my colleagues to share their insights.

Rachel, could you please share with us what would most likely change about an organisation’s governance framework to support its sustainability reporting?

Yes, for sure. Thanks, Mei.

Many organisations still tend to fall into the trap of treating sustainability as a compliance exercise, rather than focusing on the outcomes that such principles and reporting requirements are meant to engender.

So we really need to be conscious of not taking on a tick-box approach, but ensuring that sustainability matters are ingrained in the organisation’s governance and culture, so that everyone is singing from the same song sheet and everyone has a role to play.

I would say this starts with leadership commitment. This commitment should be reflected in the organisation’s mission, values and strategic objectives, with sustainability integrated into overall decision-making processes.

And when it comes to establishing clear policies and procedures specifically related to sustainability reporting, the most important thing is how they are communicated, because the timeliness and assurance processes must be a collaborative process, as you said earlier, if you are to ensure the integrity of the disclosures.

Engaging with stakeholders is also key in helping your organisation identify material sustainability issues and stakeholder expectations.

Getting the company’s sustainability reporting, and the development of sustainability goals, targets and reporting strategies, into the conversation is really what I say is the secret sauce of success.

Of course, you also have to link it with risk management. This includes assessing environmental, social and governance risks and incorporating them into decision-making processes, but as value added, not as a cost-cutting or firefighting exercise.

Internal controls need constant monitoring and strong oversight from the top. And when I say the top, I mean the board.

Data validation, verification and internal audit processes to monitor compliance with reporting standards and regulations are really vital to a company’s health.

There’s also capacity building. As you said, training is so important. Providing such training initiatives for employees ensures that they have the necessary skills and knowledge to effectively collect, analyse and report on sustainability issues.

And also, it’s very important, I say, to ensure that that training is a collaborative effort and collective, not segregated.

Continuous improvement should be a shared goal where everyone works towards a mutual interest. This may involve conducting regular reviews of the reporting practices, asking what the employees think about them and why they do them, and just seeking feedback from all stakeholders and implementing incentives to address any gaps or identified weaknesses.

So overall, I would say a governance framework that integrates sustainability into core business practices and fosters accountability, transparency and continuous improvement — these are all critical to support effective sustainability reporting.

Thank you, Rachel. That was really interesting.

However, we do recognise that less well-resourced organisations might need to take a different approach.

Alexandra, I’d like to come to you next to share your perspective on how a less well-resourced organisation might cope with these changes.

Thank you, Mei.

Well, we all know that, indeed, it can be quite different for small organisations that do not have dedicated sustainability teams and, in general, are quite resource-constrained. It’s sometimes quite difficult for them to come up with a structured approach to sustainability reporting.

However, we all know that there is a growing pressure also on small businesses to disclose information on the sustainability of their operations.

In particular, it’s relevant for those smaller companies who are part of the supply chains of larger organisations.

And as well, as you discussed that process before, Mei, a large, complex enterprise can dedicate specialised teams and roles for covering sustainability data collection, controls and reporting.

But for smaller companies who are operating with leaner teams, with smaller teams and budgets, very importantly, this needs to be approached differently.

It is clearly not possible for a smaller business to bear the full burden of developing a robust sustainability reporting governance model from scratch, and they need to rely a lot on cooperation.

In a smaller firm, you can have a handful of individuals handling the majority of governance duties, and governance duties also related to ESG disclosures.

Those most probably will be the CFO, having a very important central role there; a sustainability lead or sustainability champion, again, if there is such a role within a smaller company; and members of the executive team.

Rather than spreading responsibilities across a large matrix of roles around sustainability data, target setting and external accountability, this often overlaps and requires cross-functional collaboration between the executive team, the CFO and, again, a sustainability lead or sustainability champion.

And, of course, there are upsides and downsides to that process.

The upside of this is that it can enable more integrated thinking and alignment between a company’s ESG narrative and a company’s overall strategy because it’s all being handled by a smaller team.

But it also concentrates more work on fewer plates. So it’s important to consider how this can be optimised and how small organisations can creatively extend their capacity through, for example, shared resources, partnerships and digitalisation.

And here, collaboration again, as both of you, Mei and Rachel, mentioned, is very important.

But here we can look at collaboration also externally, and it can be collaboration with industry peers, professional associations and experts.

And again, as we all know, accountants can have a very central role here, often seen as trusted advisers by small businesses.

For example, if those are external accountancy practices or external accountants working as portfolio CFOs for several businesses, they can help lead collaboration initiatives that pull efforts across organisations and enable groups of small organisations to optimise their sustainability reporting process.

So, by partnering with sustainability consultants and cloud solution providers, accountants can facilitate access to, for example, specialised expertise and digital tools that are absolutely not feasible for smaller businesses to adopt alone.

And we can see more and more accountants actually joining their forces in working groups to share expertise.

We also know that some of the accountancy bodies are building those working groups to build accountants’ knowledge.

We have some of those groups also at ACCA. We have the Practice Room Discussion Group, where we bring together accountants to share their knowledge, to learn from each other, but also to facilitate their access to practical tools that are being developed by ACCA.

I’m sure you can all take a look at the ACCA website and find those resources that can hopefully be helpful for you.

So this is to say that, yes, indeed, it’s quite different in small organisations, and this is a unique opportunity for accountants, be it accountants working within smaller businesses, CFOs or external practitioners, to support SMEs in interfacing with multiple organisations and industry, which empowers them to support best practices and access those best practices that are ready for scalable adoption by smaller businesses.

Of course, no small company needs to reinvent the wheel here.

And I know that when we start discussing sustainability reporting for small companies, sometimes it can seem quite overwhelming.

But if there is proactive leadership, if there is a very open-minded view of the opportunities that can be brought by collaboration across industry, there can be some really efficient solutions adopted.

And again, I’d just say that there can be a completely new role, but also an exciting role, for accountants, be it accountants in business or accountants supporting organisations externally, to embrace this role and to support small companies.

So collaboration is key, and of course alignment with the executive board and with the executive team of small organisations is absolutely crucial.

Thank you, Alexandra. That was very helpful and insightful into how a less well-resourced, smaller organisation would implement the sustainability reporting process.

So, before we end today’s session, I’d like to reiterate my very first point for today, and that is: good collaboration is vital — not just within and across the organisation, but also with external peers and other experts in the industry.

There is no one-size-fits-all model, and because of that, we encourage you to take time, work through the suggested processes of our sustainability reporting cycle, and then design processes which are appropriate to your organisation and implement them.

And so, with that, we have come to the end of today’s session.

Once again, I’d like to say thank you to Rachel and Alexandra, and to you for watching.

I also leave you with two actions:

Watch the other recordings on collecting data and identifying material information to be disclosed, as well as on working with people and using technology as enablers.

Workshop the areas we have discussed today. Questions are available at the end of this recording and can be used in organisations by other educators in learning programmes.

So, thank you and goodbye.

Hello and welcome to our series of short recordings addressing the people, process and technology necessary to implement sustainability reporting

I am Aaron Saw.

In this session, we'll talk about identifying the material sustainability-related information for reporting, which is covered in stage 3 of the sustainability reporting cycle.

We also have guest speakers joining us to help bring these processes to life, and I will introduce them in due course.

Sustainability reporting is likely to cover a range of matters, so focus on what is important to your organisation. This will include information to support decision-making by senior management and those charged with governance, as well as information to meet mandatory reporting requirements and information that may be required by primary and other users.

In another video, we have talked about establishing the sustainability reporting standard or framework that's applicable to your organisation. In the guide and in this series of videos, we'll be using the IFRS Sustainability Disclosure Standards as the baseline.

The principle of materiality in IFRS S1 is based on the definition of material in the IFRS Accounting Standards. That means many professional accountants will be familiar with the concept.

Our guide proposes a three-step approach to determining material information for disclosure.

A less well-resourced and less complex organisation may favour conducting these steps together, as the same people are likely to be responsible for the task. In contrast, larger and more complex organisations may choose to carry out these steps separately and consider them at different levels or geographic locations.

Step one is about identifying the organisation's sustainability-related risks and opportunities, or, in this video, I will just say SRROs, as it's quite a mouthful to pronounce the whole phrase.

To do this, you may leverage existing risk management or business planning processes. However, these processes may need to be enhanced to assess risks and opportunities arising from new objectives or new sustainability-related targets, or to use scenario analysis taking into account forward-looking information, as well as to conduct product life-cycle assessments.

In addition, you should scan the environment and external sources.

This includes guidance available in the applicable sustainability reporting standards and frameworks, reporting by industry peers, the work of other experts, and perhaps news and social media.

Then, in step two, you assess whether the SRROs could affect the organisation's prospects.

To do this, you evaluate the organisation's dependence on resources and relationships along its value chain to generate cash flows, and how its activities and outputs affect those resources and relationships.

Then prioritise the risks and opportunities that could reasonably be expected to affect the organisation's prospects.

You notice that step two is heavily subjective and often requires judgement. Therefore, you may want to validate the organisation's SRROs with stakeholders.

Next, we move to step three. Here, we determine the material information for reporting.

For this, you need to assess the requirements in the standards and the relevance of information to key stakeholders, be they internal or external stakeholders.

You need to evaluate both quantitative and qualitative factors, including the nature, magnitude and likelihood of the effects from the risks or opportunities.

You will also need to assess the extent of remediating the risk and the dynamic pace, or, sometimes, people say how quickly a risk or opportunity can affect the organisation's prospects.

Organisations that operate in multiple jurisdictions and comply with several reporting frameworks or standards will need to be alert to information that needs to be reported using the applicable materiality principle.

Last but not least, be aware that SRROs may change over time. This is especially the case when circumstances change or when there is a significant event in the organisation or its value chain.

Information that was not material in the previous period may become material now. As such, material information for reporting would need to be reassessed.

And now, ladies and gentlemen, I'd like to turn to my guest to share some insights on this topic.

Joining me in this session is Prani Ilasan. She is the Deputy General Manager of Group ESG at Hayleys PLC.

Welcome, Prani, and thank you for waiting so patiently.

Thank you, Aaron. Thanks for having me. It's a pleasure to be here.

These days, we see organisations often operate across multiple locations and in several industries.

So, Prani, can you share with us a little insight on how an organisation such as yours would identify its sustainability-related risks and opportunities?

Okay, great.

So, let me start by giving you some context into my organisation.

I represent Hayleys PLC, which is one of Sri Lanka's largest and probably most diversified conglomerates. So, we have 12 business sectors in Sri Lanka, with operations in Sri Lanka and overseas, over 175 companies and nearly 500 operating locations.

So, I mean, you can understand the complexity of non-financial reporting at Hayleys.

For us, it has been a journey of continuous evolution.

At the moment, we report on multiple reporting frameworks because we have very diverse stakeholders who want different types of information.

Just for context, at the moment we report on GRI, integrated reporting, and eight industry standards of SASB, and we do some initial disclosures on TCFD as well.

We are hoping to voluntarily adopt IFRS S1 and S2 for the next reporting cycle, but we are taking the transitional relief that is allowed and going with the climate-first approach because, given the complexity of the group, it's a bit challenging to jump into everything together.

So, to answer your question, at Hayleys we take a centre-to-component approach for assessing SRROs.

And, to be honest, this process was really strengthened over the last few months, or maybe even last year, in anticipation of our adoption of S1 and S2.

So, how it happens is, at sector level — we have 12 very diverse sectors, like I said — at each sector we've now mandated the establishment of an ESG steering committee.

This committee is represented and, most of the time, is led by the finance director because we really want people to see that connectivity between the financials and the non-financials.

It's led by the finance director but is represented by multidisciplinary heads. So, we would have sales, we would have HR, we would have marketing and the like.

At each sector level, the steering committee has been given a standard template.

Like I said, again, it's a centre-to-component approach, where we, at the centre, have identified an exhaustive list of ESG risks, and this template is shared with the sectors, who score these risks on a quarterly basis.

We're just starting to get used to this process.

So, once it is scored and approved by the steering committee, it is then presented to the sector-level audit committees.

And then, at a centre level, I sit at the Hayleys ESG centre team, and I am part of the team responsible for preparing the annual report as well.

Then it is consolidated at group level and reported to our Group Management Committee.

We also have a Group ESG Committee as well as the Audit Committee.

I think what we really try to do is, number one, bring the finance professionals into this gamut as well, because I don't think, very rightly, like you said, you cannot isolate non-financials anymore. You cannot isolate the sustainability function because risk landscapes have changed.

The financial professionals need to be aware of these risks because now it has a direct impact on your performance, your profitability and the stability of your financials.

So, that is one thing we have tried to do.

And the second thing is to really have the board looking at these numbers and looking at these risks.

So, in addition to the SRROs and the CROs, which are presented on a quarterly basis, our Group Management Committee, which sits right below the board, as well as the board, look at the non-financial indicators.

This includes GRI numbers and performance against emission targets.

We have certain companies in the group which have committed to SBTi as well, so these performance against targets are reviewed on a quarterly basis by the Hayleys GMC and the board as well.

So, like I said, it's a journey, and I think we have just started on this journey.

But it also requires a mindset shift across the organisation, starting from the leadership to the bottom level.

So, in addition to the technical aspects and the processes that we are putting in place, we're also trying to drive this culture of sustainability consciousness in the business and trying to really get people to look at things differently and look beyond your typical financial risks.

So, that has been our experience at Hayleys, and, yeah, I'm happy to answer any of the questions you may have.

Thank you very much, Prani, for giving us an overview of your extensive process.

175 companies and nearly 500 operating locations across 12 sectors — I can hardly visualise the complexity of the process in place, although you make it sound so simple.

And thank you for summarising it for us.

Thank you again. I'd just like to say thank you for bringing the process to life with your experience. That was really insightful.

Thank you. Thank you for having me.

Ladies and gentlemen, before we end, I'd like to reiterate an important message, and that is to focus on providing material information for the intended users.

There is no one-size-fits-all model, and so we encourage you to take time to work through the suggested processes of our sustainability reporting cycle and then design processes that are appropriate to your organisation and implement them.

I now leave you with two actions:

Watch the other videos.

Workshop the areas that we have just discussed.

Questions are available at the end of this recording, and you can use them for discussion in your organisation, or they can be used by educators in their learning programmes.

And with that, I'd like to thank my guest and you for watching.

Goodbye.

Hello and welcome to our series of short recordings addressing the people, process and technology necessary to implement sustainability reporting. I am Hsiao Mei Chow, Head of Corporate Reporting Insights – Sustainability at ACCA, and I have with me Sharon Machado, ACCA’s Head of Sustainable Business.

In today’s session, we will focus on reporting and continual improvement, which are covered in stages six and eight of our sustainability reporting cycle.

Here at ACCA, we strongly believe that professional accountants have a broad sustainability role and that connected corporate reporting is an enabler. However, taking that first step is often the biggest challenge.

Sustainability reporting is not a race to a set finish line. Rather, it is a journey of continual improvement. So, our key message for you today is simply: get started. It is OK to start small. Just get started on connected corporate reporting and then find ways to improve.

Now, in our other videos in this series, we have explored the reporting process, the responsibilities of those involved, and how to identify sustainability-related risks and opportunities and material information to be disclosed.

Today, let’s take a look at the reporting itself. How will your disclosures tell your organisation’s story about its sustainability reporting journey?

First, think about how your organisation plans to communicate its story. Reporting frameworks generally do not specify a location to report sustainability-related information. An example of this is the IFRS Sustainability Disclosure Standards, which suggest that such information could be included in an organisation’s management commentary or similar report when it forms part of the general purpose financial reports.

Popular, trusted choices include the annual report, the sustainability report and the integrated report. Other examples you might be familiar with include the management discussion and analysis, operating and financial review, and strategic report.

Disclosures may also be included by cross-reference to another report that the organisation publishes.

So, which is the most suitable mode of communication for your organisation? A good way to figure this out is by thinking through questions like: what types of sustainability-related information will be reported? Who is your organisation trying to reach? Who is your audience? And are there regulatory or other requirements that your organisation needs to comply with?

Next, think about what makes reporting good.

We often hear about the qualitative characteristics of good reporting. For information to be useful, it must be relevant and faithfully represent what it purports to represent, by providing a complete, neutral and accurate depiction of an organisation’s sustainability-related risks and opportunities.

This usefulness is enhanced when the information is comparable, verifiable, timely and understandable.

But what really makes a difference is how various types of information are brought together, while keeping ethics at the front of mind.

This can include information relating to sustainability-related risks and opportunities that can reasonably be expected to affect an organisation’s prospects; disclosures in an organisation’s general purpose financial reports; and information provided within and across an organisation’s different means of communication, whether for internal or external use.

So, Sharon, I’d like to turn to you for a moment. Could you please share with us some of your expectations on connectivity between various types of information?

Yes, sure, Mei.

I think one of the things that you did touch upon right at the start was around that audience. That audience are invariably people and organisations, and they need to be making informed decisions. That’s my number one point, I’d say.

Therefore, in terms of those informed decisions, hopefully those decisions are driving what we would say is better business — and better business that is sustainable. Sustainable across a number of things, be it finance together with environmental and social factors as well, and recognising the really important role that innovation is likely to play.

Of course, sometimes there are going to be conflicts between those four areas — environment, finance, society and innovation — over, let’s say, the shorter to longer terms. And that, for me, is where connectivity plays a really, really important role, because it will help surface some of these conflicts that may exist, and that will then help better decision-making.

Now, what connectivity may mean for users and preparers, I think it’s just worth reflecting on some of the work that we have done over the last few years — namely, the Climate Readiness work that we had and our intangibles projects.

The key thing around connectivity and useful information for user decision-making is that it has to be easy to engage with — less scattered than is perhaps currently the case, based on some of the research that we have observed and undertaken.

It should reduce duplication and reduce gaps in the information, leaving less of that, “What’s missing? I need something else in order to move to the next stage of my decision-making.”

And, given that in many instances people want to understand the finance as well, it has to be connected with the financials, be it the financial statements for purposes of business planning, access to finance and servicing that finance.

And, of course, I think, as you mentioned, applying ethics in the preparation and use of that connected information.

Fundamentally, then, what types of decisions need to happen, and what do these people need to understand? It’s business activity and that flow between strategy, governance, sustainability-related risks and opportunities, what they are and, really importantly, how they are being managed. In turn, that will then link back to how that strategy is progressing.

So, in a nutshell, or in summary, I think the key things I would say are that connectivity, for me, will mean linking to the financial statements, financial planning and business activities, and really providing a sense of the impact of leadership.

Something rather controversial that was shared with me in a recent round table that we ran for a future piece of research was the impact on materiality. Some people are starting to think about it as triple materiality. Perhaps that’s not a conversation for now, but it is something that we can talk about in a future piece of our work.

I hope that answers your question.

Yes, thank you very much, Sharon.

Reflecting a bit on what you’ve shared, I’d like to emphasise again that organisations really need to clearly and concisely explain the connections, while also avoiding unnecessary duplication where disclosures involve common themes of information.

For example, if an organisation manages its sustainability-related risks and opportunities on an integrated basis, the organisation could provide integrated risk management disclosures rather than separate disclosures for each sustainability-related risk or opportunity.

Sharon, while we are still on the topic of connected information, would you also be able to share some examples of how connections can be drawn and reflected in an organisation’s disclosures?

Yeah, sure.

I think it links back to achieving the expectations that you asked me about right at the start. In terms of how we go about it, preparers should really be working with others in the business and outside to identify their needs in decision-making. What does connectivity mean to them?

In our work, there are some common things in terms of what connectivity might mean. Certainly, as I mentioned before, sustainability with financial information — and recognising that that could look quite different.

It could be quantitative information or, indeed, much more of a narrative story that indicates a direction of travel.

Now, we recognise that this is a journey, so therefore it is OK to start off with that narrative story, recognising that journey. Even in its narrative form, it has to be complete and robust in how you tell that story and develop over time.

Of course, what connectivity might mean and how it’s done will depend on how accurate it needs to be today versus the way it can develop over time, and how immediately the user needs it.

Now, explaining the strategy and action point that I made earlier, and perhaps reflecting a little bit on what might create impactful leadership, I think the types of things that they need to be thinking about are recognising the connections that sustainability strategy and activity might have in accessing and servicing finance.

As I mentioned, thinking about very particular numbers potentially in the financial statements, be they asset valuations or impairment triggers, and then obviously impairment activities.

Looking to the future and clearly saying, “Look, in our strategy we want to reach this particular place,” and talking about that progress towards it in the form of targets, using metrics.

And, of course, that’s in the financials, but also seeing how those targets and metrics play into how the organisation measures itself internally, potentially for some key employees, perhaps linking it to their objectives and even remuneration.

And, of course, how sustainability matters are being connected to supplier engagements and how they are being managed.

On suppliers, I might just extend that a little bit to thinking about how sustainability action affects them — potentially in changes to service level agreements or, indeed, featuring much more, as we’re seeing in procurement arrangements, the quest for suppliers to identify and talk about how they are managing their risks and opportunities.

And that, for me, is a really big call to action to all suppliers, including those that are small and medium-sized enterprises, because they’re not immune.

There’s a comment that I hear that makes me a little bit nervous. We’re hearing a couple of instances — not many, to be fair — where we’re hearing SMEs say, “Sustainability is not for them.”

But I think a lot of our research that we have done, and indeed many of our colleagues within Policy and Insights at ACCA, have said, “Well, no, it does apply to you,” when you think about the fact that 90% of all businesses globally comprise these SMEs.

Therefore, there are a huge number of benefits that are available to them. And, indeed, if the supply chain is not providing this information or acting in a sustainable way, then it’s likely to have negative implications for them.

Perhaps, if I’ve got a little bit of time, I might just end with a short example of what a connected disclosure and its implications might look like.

So, imagine that you’ve got Supplier B, and Supplier B doesn’t meet the sustainability service level agreements of Company A — the company that’s doing the reporting — or Supplier B doesn’t really follow where the industry it’s in is headed when it comes to a sustainability topic.

Therefore, Company A might well say, “Look, it’s not worth me buying from you anymore,” and/or offer worse terms of trade.

Company A will be maintaining its financial records, an annual report, perhaps its management commentary amongst some of the other documents that you referred to right at the start.

So, it’s telling people about that story in terms of not just what it does in terms of its business, but how it manages its value chain.

Therefore, these suppliers — and therefore the connected information that was presented by Company A — will help its stakeholders, but in turn potentially have further implications for Supplier B.

Over to you, Mei.

Well, OK. Thank you, Sharon. That was very helpful and certainly a lot of insights.

I’ll circle back to your point on metrics and targets in a little bit, but for now I’m going to talk about how we can enhance the integrity of reported information through a cycle of verification and continual improvement.

It’s important that the level of rigour applied to reporting sustainability-related information is the same as that applied to financial statements in order to produce verifiable and auditable disclosures.

Verification supports building trust in sustainability-related information and underpins its verifiability.

So, to address the quality of reporting across the stages of the sustainability reporting cycle, focus on obtaining assurance — an essential part of an organisation’s continual improvement.

Think about what level of assurance is appropriate to meet the needs of the users of your organisation’s sustainability-related information, as well as whether your organisation is subject to any regulations determining that level of assurance.

While external assurance gives confidence to users of sustainability-related information, including investors, do remember that internal audit has its own role in helping an organisation improve the effectiveness of its internal controls.

I guess your next question would be: how would you select an independent assurance provider?

As sustainability reporting can relate to a large variety of subject matters, ensure that they have the right credentials and subject matter competence, as well as experience in the industry that the organisation operates in.

The assurance provider will also need to have a good understanding of the link between sustainability-related and financial information, be regulated and abide by the ethical requirements.

At the same time, those charged with governance, such as the audit committee, have their own role and important remit in building stakeholders’ trust as part of their oversight of the quality of assurance services.

Their responsibilities would include advising on the verifiability of sustainability-related information, determining the scope for internal and external assurance as well as the level of assurance, developing and strengthening the policy to appoint sustainability assurance providers, as well as ensuring that these assurance providers have access to the appropriate staff and supporting information.

But, of course, in smaller or less well-resourced organisations, the focus on assurance is likely to be scaled back and more focus placed instead on continual improvement.

But hold on for a bit. Before we explore further into what continual improvement entails, I’m going to step back a little into reporting.

By now, you would have worked through the earlier stages of our sustainability reporting cycle, and your organisation is ready to incorporate additional relevant data into your reporting package and then move on to preparing the disclosures themselves.

Your reporting package might range in complexity, perhaps from a set of spreadsheets to automated, system-generated reports.

To help you with this, we have developed a set of sample worksheets which you can download from the ACCA website.

A few key things to note are that these are not formal worksheets, but rather they highlight the key items which are required for reporting based on IFRS S1 and IFRS S2.

However, using these worksheets should not bypass reading the standards themselves.

One example of how you can use our sample worksheets is by workshopping the questions and actions with your colleagues and stakeholders along your value chain.

As these worksheets highlight key reporting items, working through the guided thought process will help you in developing the first cut of your organisation’s sustainability reporting disclosures, while helping to ensure that the various reporting needs are aligned and met in an efficient manner.

Sharon, would you like to reflect on something here?

Yeah. I was actually thinking about what you were saying, and I think that the worksheets are a really great tool in helping everyone get started.

They are really good when designing and monitoring the process for reporting.

You touched upon aspects of who is responsible and accountable for the different components.

And when it comes to monitoring, I think what it allows is that, when you’re using the worksheets that we’ve developed, at a glance you should be able to appreciate where the gaps are in the data.

You should then be able to work out who and how that data got to you, and perhaps what’s not quite working perfectly in that process.

And it’s from there that you’ll be able to focus on what continual improvement might look like for you as an organisation.

It will be different across all organisations. I think that’s probably what I’d like to say most.

Thank you, Sharon. So, you have segued us nicely back into continual improvement.

Organisations need to set metrics and targets — I think this is something that you highlighted earlier — to assess and monitor their own quality of reporting and how that progresses over time.

These metrics and targets are different from the ones for disclosure and are a way for the organisation to validate that its reporting process and output are meeting both its internal and external stakeholders’ needs.

In our guide, we have listed some metrics and targets that your organisation might find helpful to consider.

These are aimed at assessing progress in the quality of data over time, stakeholders’ feedback on the value of sustainability-related information, development and retention of sustainability-related knowledge across the organisation, and the availability and ease of access to sustainability-related data across the organisation.

So, before we end today’s session, I would actually like to reiterate my very first point for today, and that is to get started. Get started on connected corporate reporting and then find ways to improve.

Again, I’d like to say that professional accountants are well placed to lead organisations along their sustainability reporting journeys while keeping ethics at the front of mind.

So, use connected corporate reporting as your enabler along your sustainability reporting journey. Collaborate with others, drive transparency, business change and sustainable value generation over the long term.

And with that, we have come to the end of today’s session.

Once again, I’d like to say thank you to Sharon and also to you for watching.

I leave you with two actions.

One, to watch the other recordings on how to implement the processes, as well as on working with people and using technology as enablers.

And two, to workshop the areas we have discussed today.

Questions are available at the end of this recording and can be used in organisations by other educators in their learning programmes.

And so, thank you very much, Sharon. Goodbye.

 

Hello and welcome to our series of short recordings addressing the people, process and technology necessary to implement sustainability reporting.

I am Aaron Saw.

In this session, we will talk about using data and technology as enablers to produce high-quality sustainability-related information. Joining me in this session to help bring these important enablers to life is Ricky Cheng. Ricky is a director and the head of risk advisory at BDO Hong Kong.

Now, you may know data can be obtained from within or outside an organisation, including its value chain and third-party data providers. As such, the integrity of data and the entire reporting process is imperative to producing high-quality sustainability-related information.

In another video, we’ve talked about determining material information for reporting. The considerations of data and technology as enablers to support the reporting of such information are covered in stages 4, 5 and 7, specifically 7.2, of the sustainability reporting cycle.

While you will usually engage with the sustainability reporting cycle in a clockwise manner, it’s important to remember that when engaging with a particular stage, you may return to an earlier stage or one of the underpinning activities in that stage.

Now, in this stage, the expertise of technology and data professionals will be crucial. Technology and data professionals will need to collaborate with professional accountants and other experts in determining the type of data required for analysis and then reporting, and where the data will come from.

For the organisation, it is important to clearly identify the subsidiaries and relevant value chains that form the boundary where information will be reported on.

You also need to take into account the information demanded by key stakeholders for decision-making, which will inform the scope and parameters of the data.

By now, you’ll notice that determining the reporting boundary, and the scope and parameters of the data, are influenced by the risks and opportunities that could reasonably be expected to affect the organisation’s prospects, as well as the material information to be disclosed. These are determined in stage 3.

The applicable sustainability reporting frameworks or standards, such as the IFRS Sustainability Disclosure Standards, may also set out specific requirements for information to be disclosed and provide guidance. This includes the metrics to measure progress towards sustainability-related targets.

Next, we’ll move to collecting the required data.

For this, consider the available sources of data. Some data may already exist in your systems; others have to be sourced externally from stakeholders in the value chain or from third-party data providers.

Organisations need to consider the credibility of each source and weigh the costs and benefits. This is true especially when considering the use of proxy data for estimates when directly measuring certain metrics is not possible or very costly.

Technology and data professionals may add value here.

Stage 5.2 of the cycle encourages organisations to pay close attention to how the required data will be collected. The methodology will greatly influence the success in collecting good-quality data.

Perhaps technology and data professionals can assist organisations in this area, especially on the following:

• evaluating the technology available;
• keeping the process simple and using consistent methodology;
• maximising the use of data collected;
• aligning the frequency of collection with the reporting timelines;
• aligning data collection with the procurement process; and
• embedding verification in the process and systems.

Despite the best efforts, organisations might still find it necessary to engage external support to help improve processes, perform some of the data collection and analysis tasks, or access the data in third-party systems.

Finally, we encourage organisations to have a clear strategy for using technology to meet their reporting objectives and other needs, including integration with existing systems and the scalability and flexibility of the technology to meet their future needs.

And now, ladies and gentlemen, I would like to turn to my guest to share some insights.

Welcome, Ricky, and thank you very much for joining us to share your insights on this important area that enables the reporting of sustainability-related information.

Reporting of sustainability-related information will inevitably require data from outside the organisation. I touched upon this briefly earlier in my introduction, and this may come from the value chain and even third-party systems.

So, Ricky, can you share with us how technology and data professionals can support an organisation in collecting sustainability-related data, especially those that come from across the value chain?

Over to you, Ricky.

Okay, thanks, Aaron. I’m very happy to be here to share my insights.

Well, actually, I think professionals can assist in a number of ways.

First of all would be data verification. Problems usually happen when companies are collecting data from the front lines, but the front-line people misinterpret the information requirements and required information is not being provided, or incorrect conversion factors are used when calculating carbon footprint, for example.

We can assist them with data verification against raw data and also generate up-to-date conversion factors for calculating carbon footprint by using automated tools.

Secondly, identification of required information. This actually refers to the Scope 3 emissions inventory. Many companies may not have a full understanding of each category of the 15 Scope 3 emissions categories.

We have established a Scope 3 emissions tool, which helps them to assess the relevance of the categories and provides them with clear guidance on the information required for calculation.

Thirdly, we could assist in identifying material sustainability topics. The fact that we have established a database of listed companies’ ESG reporting practices and topics, with our ESG performance assessment tool and our knowledge in ESG reporting frameworks such as SASB, GRI and TCFD, means we will be able to identify the gaps in ESG disclosure and advise them on material ESG topics that are relevant in the client’s industry and what information will be needed for disclosure purposes.

Thank you.

Thank you, Ricky. You touched upon some of the technology factors, as well as those coming from requirements from the standards.

Perhaps can you tell us a bit more about the data characteristics? In terms of the volume of data, will companies of different sizes have different considerations with regard to how they collect the data?

Well, actually, this will depend on the scale of business operations.

Especially when you’re talking about, like, a small trading company with very simple or just a small volume of transactions, then I guess they can use simple Excel spreadsheets. That can cater for their own purpose and their needs.

But when you’re talking about companies having multiple jurisdictions and operations, and also compliance requirements from different jurisdictions – say, one from the European area and one from Asia, like in Hong Kong – I could say that the data requirements for ESG disclosure could be very different.

So you can see that there could be a big difference in the data collection exercise.

And also, given that companies with multiple locations and operations may have more complex requirements, a simple spreadsheet may not be able to serve the purpose of ESG disclosure.

To solve this problem, actually, we would suggest our clients consider using some sort of software with multiple-access capabilities, and also software that can track users’ audit trails and track their changes, such that we can locate who has done the correction or the input recently, and whether there are any such exceptions that we can identify from this kind of audit trail log.

Okay, so what about the database that you mentioned earlier? Since there’s so much data and it’s coming from different locations, can you tell us a bit more about the database that you mentioned earlier?

Yeah. Actually, we are talking about a database of information that we collected from the listed companies’ ESG reports.

BDO Hong Kong has been performing an ESG reporting survey over the past few years and, for the purpose of doing the survey, we have established an Excel spreadsheet with over 300 data points and questions that we need to collect from the ESG reports for analysis purposes.

And when we are building up this kind of Excel spreadsheet for data collection, we have also made use of programming software, say, for example, Python, that can enable us to do look-ups and also enable some sort of automated operations.

Say, for example, automatically drawing the data from the ESG report in PDF format from the public domain on a regular basis, such that we do not need to do it on a manual basis.

So this can enable our subsequent assessment and also analysis of ESG report presentation and disclosure information across the peers, and provide relevant insights to our clients about, say, for example, in your industry, what kind of material ESG topics you need to take care of.

Your existing disclosure level may not be up to the industry average level, or you could involve more information in disclosing areas such as social matters, human resources or supply chain practices.

Yes, so ultimately the success of whichever methodology is used is down to the people who will be providing inputs or data into the system.

So can you tell us more about how you, or how organisations, can convince stakeholders, especially those in the value chain, to supply them with the necessary data?

Well, yes, I believe that many companies are having challenges in collecting this kind of data from value chain companies.

But apart from the disclosure requirements, I think there are some commercial reasons behind why it is valid for supply chain companies to provide ESG-related information.

We are aware that some of the big corporations are increasingly concerned about their reputation in terms of ESG and keen to implement responsible procurement practices.

As such, when procuring goods and services, they may require vendors to follow their supplier ESG codes of conduct. The company may conduct ESG assessments of their vendors’ ESG practices on a regular basis, or even carry out on-site verification to certify compliance.

Therefore, vendors may need to have the ESG information ready for such checking.

Secondly, shared value and goals. Value chain companies may have their own business goals and pursue certain UN SDG goals, or even reduce their carbon footprint together with the company.

So companies with shared values may come together, sharing their common interests and co-operating together to share ESG information, practical experience and also solutions.

This may enhance collaboration with big corporations or even develop strategic alliances for future business opportunities.

Thirdly, becoming a qualified supplier.

Nowadays, many corporations require their vendors to be evaluated by independent assessment firms to ensure that they have obtained a certain ESG score before accepting them as qualified or approved vendors.

As such, vendors are required to have this ESG information ready for assessment purposes.

Yes, thank you very much, Ricky, for bringing these important enablers to life with your insightful comments.

Data and technology are important, but it can often be difficult to visualise how they will contribute to reporting sustainability-related information, especially for companies that are just at the start of their journey.

Before we end, I’d really like to reiterate an important message, and that is to use data and technology as enablers to produce high-quality sustainability-related information.

There is no one-size-fits-all model, and so we encourage you to take time to work through the suggested processes of our sustainability reporting cycle, then design processes that are appropriate to your organisation and implement them.

I leave you with two actions.

Number one, please watch the other videos.

Number two, workshop the areas that we have discussed today.

To help you, there are questions available at the end of this recording, and you can use them in your discussions within your organisation or by educators in their learning programmes.

And with that, I’d like to thank Ricky and to thank you for watching.

Goodbye.

Thanks. Bye-bye.

Hello and welcome to our series of short recordings addressing the people, process and technology changes necessary to implement sustainability reporting and, indeed, be more sustainable as an organisation.

Today, we're going to cover the people-related considerations, and we're going to be drawing on ACCA's own journey to be more sustainable and to communicate how we're doing.

I'm really pleased to say that I've got Maggie McGhee, Executive Director – Strategy and Governance, and Dale Burridge, Director of Global Business Services. I'm Sharon Machado, Head of Sustainable Business and the co-researcher of the piece of work that this particular recording is about.

Together, we're going to discuss four key areas. One, looking at how we create awareness amongst our people to be more sustainable and to report. Two, the organisational change necessary so that our people are best placed to deliver. Three, the skills that we need, in particular the skills of professional accountants, and how we access them. And four, looking at how we manage our external stakeholders, who are central to providing the information for sustainability reporting, but also to using it.

So, with no further ado, we're going to start on our first of the four areas, and I'm going to turn to Maggie for this particular one.

As we know, the reporting process isn't just happening in one team. It's all of us as an organisation coming together, and therefore we all need to be on a learning and development journey. So, if you could outline for me how we at ACCA go about it.

Thanks very much, Sharon.

I think the top line is that if you're going to be sustainable and if you're going to report on it, then it's absolutely critical that the organisation as a whole is behind you, because sustainability has to be part of every discussion. It has to be truly embedded, and that really supports learning and development.

At ACCA, we start with executive accountability. So, what does that mean? Well, in terms of that, it means that at our Executive Board meeting, sustainability is an intrinsic part of our discussions, and that includes reporting on sustainability.

We've also developed cross-functional working groups to support us, because it's really important that you get that broad spread of knowledge and information. That includes our Finance and Operations, our Global Business Services — we'll hear more from Dale in a bit — as well as our teams across the world in our market offices. That brings together knowledge and experience and allows us to share information.

But sustainability really has to be absolutely embedded in ways of working, and that really, as you said, starts with training. It starts with the training for our people.

At ACCA, we've actually undertaken training for all of our people across the organisation, regardless of their level and regardless, actually, of their role.

What we've tried to do through that training is raise a broad awareness. So, we cover things like: what is sustainability, actually? Let's define it, and what does that definition mean in the context of ACCA?

We've also covered: what do we report on? What data do we need to capture? And I think the really important bit is, well, why do we need to capture that data?

Then we've taken it to a level of: what does that mean? What does that mean for your department? What does that mean for your team? And what does that mean for you as an individual?

Beyond that, we're also trying to encourage an understanding amongst all our people in terms of what do we report externally? What do we share with our stakeholders through our integrated report?

We cover all of that through our learning and development, through the training that we provide. Then that supports the operational side, because it's not an end in itself. It's great having people knowledgeable and having that awareness, but then it translates into, first, a strategic plan, but then also into the operational plans.

It's that learning and development that really is, I'd say, the sort of oil that makes everything work, because people understand what they're seeking to do through those plans.

We also supplement that with guidance because things constantly change. So, it's not a sort of thing you do once and then it's over.

Actually, I think a lot of what you've said does certainly resonate with the different teams that Dale and I come from, in terms of cross-functional working groups, how our data is shared and used amongst our teams. That's something that we're going to be touching upon a little bit later on.

For the time being, I'm going to move on and really think about the aspect of how our organisation is structured to deliver, and if there are changes necessary, what changes should they be?

Excellent. I think, in terms of it, you often hear the word "organisational design", and it all feels somewhat big, a bit scary and definitely expensive. I think you've got to be realistic about what you need to achieve.

Now, at ACCA, actually, our transformation wasn't so much in how we structure ourselves. Actually, we already had lots of globally distributed teams. Our transformation was really in how we work together and how we collaborate and bring people together around common challenges and issues.

From our perspective, we used our Strategy team, which is a central team, as really the key driving force through it. We've called them an incubator. I think they're also an accelerator in terms of thinking in the organisation.

But that Strategy team has worked with teams across the organisation, so Finance and Operations and Global Business Services — key teams there in terms of the work that we need today.

The other team that they really worked very closely with was our Risk team, and I think risk is so critical to this conversation.

If I look back perhaps five years, our risk reporting, or risk consideration around sustainability, was really in its infancy. We did what we needed to do from an integrated report perspective, but it wasn't embedded in the way we operated as an organisation.

Now, one of the things we've moved forward is actually embedding sustainability into our Enterprise Risk Management framework. That means sustainability risks are a critical consideration.

I'd also say sustainability opportunities, because we always talk about risk, but it is two sides of the one coin. Of course, that's absolutely key because that then supports how we report on net zero, as I'm sure we'll come on to, but also how we respond to our commitments to the Sustainable Development Goals that we very publicly made.

It also reflects best practice, and that's the other element that we're continually working on. Best practice continually evolves, especially in the reporting space, and it's an area that we've continually tried to focus on.

I think for all of that, collaboration is absolutely key. So, it isn't about having a very separate sustainability team perhaps sat in one room talking amongst each other. It really is about bringing teams together, sharing information, sharing data, sharing the analysis and collectively identifying what needs to be done.

For that, we're in a great position with technology. It really has provided great advancements for us.

I would say, from ACCA's perspective as an organisation, what we've sought to do is build capability across the organisation rather than in that specific team. I think that does support integrated thinking, it supports genuine commitments to sustainability that need everyone to work together, but also reflects our size.

We may have three-quarters of a million members and students, but actually, as an organisation, we're just over a thousand in terms of employees. So, we need to make sure that we can operate in a way that's sustainable for us as well.

I would say, in terms of it, it's very much a journey — that's the sort of great phrase, isn't it? — and as sustainability grows and embeds, obviously we'll continue to reflect on our approach to building that capability.

Actually, there's quite a lot of insight there, Maggie. You talked about the collaboration, you talked about actually, several times, it being a journey, and actually an integrated approach that ACCA has taken.

Dale, you've been at the heart of that, so I wonder if you've got any reflections that build upon what Maggie has just articulated.

Yes, certainly. I think a point for me to emphasise, particularly with organisational design and the way that we're structured today at ACCA, is that we didn't need to make any real changes to our design.

We have globally distributed teams. In my function, we're globally distributed, and that's really helped us in terms of gathering data and really producing a lot of our net zero reporting information.

I think that's certainly something that's worth considering.

I think also what's worked really well for us: we've had a Steering Group. Very early on in our process, we set up a Steering Group that was always focused around sustainability and sustainable development.

I think having that group of sustainability-minded people from the organisation has really helped us build a guiding coalition for sustainability at ACCA. I think any organisation having that is going to set them up for success with how they take this forward.

Those are probably some of my key reflections from what Maggie just said.

Then I think the next bit for me is that there's a section of the guide where you talk about investing in internal audit. We've recently had an internal audit that we used to look at, really just to provide some assurance around our sustainability approach, and also in particular around our net zero point.

That, for us, has been really useful. Our approach to sustainability at ACCA is heavily influenced, as you'd expect, by our values, in particular integrity. So, having audit engagement has been really valuable for us in verifying that our approach to sustainability is aligned with our values.

Also, I think just given the nature of the topic, there's a lot of subjectivity when it comes to sustainability reporting. If it's net zero emissions, what you include, what's not included, and so on.

I think internal audit and the skill set that internal audit brings to sustainability is extremely valuable, and I think that's going to be an ongoing involvement for us as we progress our journey.

There are a couple of things that you've picked up upon, and it's that interest in sustainability that all of us, I believe, have had throughout our careers. But it's probably fair to say that we didn't start off — and, by the way, we're all accountants here — and throughout our qualification process, I wouldn't say that we actually had a huge amount of sustainability back when we started studying and initially entered membership.

But actually, Dale, you mentioned a couple of topics about greenhouse gas emissions and net zero. There are lots of new topics for us to be engaging with, and certainly you have engaged with them within your role.

So, I'm going to move on to that third area around the capabilities that are necessary, in particular the skills, behaviours and mindset. What are they, and perhaps a few reflections as to how they're best accessed?

Yeah, it's a great question. It was certainly an experience for me getting involved in net zero and sustainability, which I think was just a few years ago.

But reflecting on the skills and the capabilities, I found it really helpful looking again through the guide, and I've pulled out a few from the guide that, for me, really resonated.

The first one is drive. I think it's been really important to be motivated and have the right attitude. I don't think you can go into this without that, and I think it's been hugely beneficial having that motivation and drive.

There's a lot to it. I think it's the alignment with our values and seeking out the right answers and doing it in the right way.

So, drive has been really important. I think motivating yourself and other people — I think it's a topic that is emerging, has been emerging for the last couple of years — and I think motivating other people to have an interest in it, to be going on that journey with you, I think is really important. I think that's a key capability.

I think also looking at stretching goals and being curious. When we set our targets around net zero, they were, I think, quite ambitious targets, and I think it's really important that we're able to support those decisions and support those targets in that kind of a way.

Drive, for me, was really important.

I think ethics is also really important, again because of the subjectivity of the topic. I think you can often come across decisions or discussions that you often have to really consider from an ethical perspective.

One of them might be what you include in your Scope 3 emissions and what you don't. So, I think that's a really important capability that's here.

And I think also with ethics as well, there's a real opportunity to help shape the vision, the strategy and policy of an organisation.

So, I think getting involved with sustainability and having that skill set around ethics is important from that perspective.

The third one for me was expertise. When I came into this, I had no real experience or expertise around net zero or sustainability, but I did have the background of an ACCA qualification, and that, for me, I think, helped quite significantly.

I think the broad skill set that I took from ACCA, from my qualification, from being an accountant, really helped.

I think for anybody working in sustainability, expertise is really an important point.

I've likened it a lot to accounting standards. A lot of what's happening in sustainability reporting with the new standards, and around things like emissions reporting, I tried to approach in the same way that I did when I was learning about all of the accounting standards.

Actually, having that basic skill set and being able to apply it and learn a new standard and a new subject area, I think, has been really important.

And then the last one for me was collaboration.

Again, talking about the Steering Group that we've got, working with people around all of our global offices, working with our suppliers, with the experts, with internal audit — it's been really important to be able to engage effectively with people, be clear in our communications, and I think that's been a real key capability.

I think going into a lot of the sustainability reporting, having that view can be really supportive and helpful with all the reporting requirements.

That's great. Actually, one of the things that Dale's referenced a few times is the guide, and the Guide to Implementing Sustainability Reporting has a whole section devoted actually to the capabilities.

So, the capabilities that Dale has picked out as being relevant to him are probably going to be relevant to many watching today.

But they are broken down into those that are core and within the domain of every professional accountant, and some of the newer areas that they need to be developing.

So, it's really quite good for all of us engaging to have a look at them and think, "Okay, which ones do we have, and which ones do we need to build upon?"

And I think with that, I might just quickly turn to you, Maggie.

Sure. So, in terms of capability, I mean, I think I talked a lot about how we've tried to build capability within the organisation.

I think it's fair to say that is absolutely critical, and you're not going to achieve anything without that.

However, sustainability covers such a broad range of issues, and some of them are very, very deeply technical and some are very fast-evolving.

So, I think it's also important to recognise where you do need to bring in external support and external help.

I think in particular where a topic is new — if we look at greenhouse gas emissions, life cycle assessments, or areas that are particularly complex — I think you've got to recognise all roles in an organisation have responsibility.

You need to recognise where you need to bring in additional support.

But I think the key reflection for me is you also have to recognise that it's going to continually evolve.

What you're looking to do is scale up for starting it, but also, what's your long-term capability model that you're going to use to make sure that you can sustain this over the long period that you're going to need to?

That's actually interesting. I think every day is a little bit of a school day when it comes to building our capabilities in this space.

Actually, Dale touched upon an aspect around working with external stakeholders, and I'm going to stay with you, Maggie, because being sustainable means bringing our suppliers, our customers and our members on that journey, in terms of providing information but also actually using it in the way that it's intended to be used.

I wonder if you could perhaps signpost some of the changes that we've made with our external stakeholder engagement in that space.

Yeah, that's a good question. I think actually, in some ways, managing externals isn't all that different from managing internal stakeholders.

I think you still have to go through the same elements. They've got to appreciate what your sustainability ambition is, they've got to understand the data that you collect and why you want to collect that, and they've also got to understand what their role is in terms of it.

But I think, you know, we've talked about sustainability. It's not just about reporting on the organisation; it's about reporting on the full value chain.

So, that does mean that we do have to engage, so they are very clear on our expectations over what they need to provide to us, and that they're able to provide that information in a way that's robust and indeed is auditable.

But we also have to engage more broadly. As a membership body, with all our members and with everyone who reads our integrated report, so that we raise the importance of sustainability and their understanding of it.

And I think in terms of that reporting, the sort of elements that we're talking about are, you know, we want to make sure everyone understands why we believe sustainability is important, how it features into our long-term success, but also how critical it is in terms of delivery of our strategy.

And when we do that external reporting, they also need to trust it, and that's really critical.

So, that comes back to how do we ensure that that information is robust, reliable and can also be subject to audit in terms of trust.

It's an interesting point, Maggie, and I think for me what you say about trust, it links back to one of the earlier questions we talked about around audit.

For me, also part of how we do that, we've had our net zero targets and methodology validated by SBTi, the Science Based Targets initiative.

Part of the reason we did that was to really get some assurance, but also to demonstrate, I think, to our external stakeholders that we were doing the right thing in the right way and in the most meaningful way.

I think part of demonstrating that integrity and gaining the trust of our external stakeholders, SBTi and having our targets validated has really helped that.

Again, it really shows that we're taking a robust approach around our measurement of emissions, and we're doing it in a science-based way that really makes a difference.

I have to say, we really are actually quite close to time on this one, but I think there have been some fantastic points raised today.

What I'd like to do is just really end with pulling it all together, because a lot of what was raised really helps and should help organisations think about what their business case might be for investing in people.

So, please correct me if I'm wrong, but I think if I were to sum up, there are a couple of big things.

One is around ensuring that the culture is set, that the whole organisation is thinking about sustainability, and that requires that integrated approach in terms of the actions, integrated thinking, ethics in particular. I think you touched upon it several times, Dale, and I think that's really important when you're trying to build that trust.

And there's going to be loads and loads of new learning for all of us, and it's something that is going to be an ongoing piece. So, it's about being motivated to continue to learn.

With no further ado, I'm actually going to say thank you to Dale and to Maggie.

I'm also going to leave the audience today with two key asks.

One is: please do watch the other four recordings that we've got around implementing sustainability reporting. Those focus on process, and they also focus on technology and data.

And to leave you with the people considerations, we have five key questions for you to workshop. They can be used in education settings, or indeed within your own organisation, to think about how you can be more sustainable and communicate it effectively.

But thank you very much for watching us today.