Professional accountants are being urged to respond to increasing demands from investors for information on environmental, social, and governance (ESG) disclosures.
A new report by the Professional Accountants in Business (PAIB) Committee of the International Federation of Accountants (IFAC) highlights an evolving trend toward greater interest in ESG factors, and integration of these factors and ESG performance information into investment processes and decisions.
“As professional accountants both support and fill leadership roles in management operations and control, as well as stakeholder communications, they are well placed to apply accounting discipline and rigor to the collection, analysis, and reporting of ESG data, and to support the incorporation of ESG factors into their organisation’s management processes, systems, and reporting,” says Roger Tabor, chair of the PAIB Committee.
Tabor adds that the involvement of accountants in improving the relevance and quality of their organisation’s internal and external business reporting will be critical to meet the challenge of increasing the use of ESG information.
In response to the challenges of ESG integration, the report recommends that accountants engage investors effectively to understand their information needs and communicate performance.
Accountants should also incorporate ESG factors and non-financial performance information into governance and accountability arrangements to improve information and disclosure quality.
Another recommendation is to link financial and non-financial performance and outcomes to improve understanding of sustainable value creation.
Accountants should also ensure that ESG disclosures meet investor needs by being material, timely, consistent, and comparable in order to improve usefulness of reporting and greater transparency.
The report also suggests bringing together data that may be dispersed in different parts of the organisation or its supply chain to support internal and external decision making.
MORE ARTICLES ON INVESTOR RELATIONS
CFO innovation Asia Accounting and Regulation the Asia Pacific resource center for senior finance executives, daily news, analysis, best practice and case studies in Accounting Regulation, IFRS, US GAAP, Tax, investor relations, corporate governance, Corporate Law, Financial Regulators, Internal Audit, Audit, Corporate Law.
CFO innovation Asia, Finance and Banking the Asia Pacific resource center for senior finance executives, daily news, analysis, best practice and case studies in Corporate Finance, trade finance, treasury and risk management, capital expenditure, Banking, mergers and acquisitions
CFO innovation Asia the Asia Pacific resource center for senior finance executives, daily news, analysis, best practice and case studies in Finance Management, Corporate Governance, Human Resource Management, Compensation and Benefits, Mergers and Acquisitions, Professional Development, Corporate Real Estate, Risk Management, Budgeting and Forecasting, Business Process Management, Business Process Reengineering, Outsourcing.
CFO innovation Asia Technology the Asia Pacific resource center for senior finance executives, daily news, analysis, best practice and case studies in Finance Systems, Business Intelligence, EPR, Accounting software, CRM, Cloud Computing, Telecommunications, Business Process Outsourcing, Business Process Management Software.