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Recent sustainability reporting developments

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13 Oct 2020

A summary of recent developments at CDSB, TNFD, GRI/SASB, GRI, PRI, in New Zealand and Hong Kong, at AccountAbility, IAASB and CAQ.

In addition to the recent major developments at the European Commission, CFA Institute, five ESG standard-setters, the World Economic Forum, and the IFRS Foundation Trustees, the following smaller developments occurred recently:

  • The Climate Disclosure Standards Board (CDSB) released CDSB Framework application guidance for climate-related disclosure. The release is the first in a series of guides on nature-related financial disclosure, with water guidance to follow early next year. Please click for more information on the CDSB website.
  • The CDSB also offers free consultation on climate-related reporting for EU businesses. See here for more information.
  • Efforts are underway to create a Task Force for Nature-related Financial Disclosures (TNFD). An Informal Working Group has been founded that will lead to the creation of the TNFD itself in 2021. Establishing a reporting framework for finance sector impacts and dependencies on nature is seen as critical for halting biodiversity and ecosystem loss. A TNFD website is already available.
  • Following the launch of a collaborative workplan between the Global reporting Initiative (GRI) and the Sustainability Accounting Standards Board (SASB), the standard-setters are working together to develop materials that show how the two sets of reporting standards can be used together. As a next stage in the collaboration, a joint survey has been launched to help understand current experiences by organisations that use either or both sets of standards for their sustainability reporting. Please click for more information on the GRI website.
  • Also, a recent GRI public opinion poll on social and environmental corporate performance revealed rising trust in sustainability reporting around the world. Please see the GRI website for more information.
  • Principles for Responsible Investment (PRI) has published a call by investor groups on companies to reflect climate-related risks in financial reporting. They stress the investor view that climate-related risks are material factors that should be reflected appropriately in financial statements. More information is available on the PRI website.
  • New Zealand will implement mandatory climate risk reporting in line with the TCFD recommendations, becoming the first country to do so. Please see the press release of the New Zealand government for more information.
  • The Hong Kong Money Authority (HKMA) recently set out a supervisory approach designed to ensure banks build resilience to climate-related risk. In terms of disclosures and data, HKMA notes that supervised financial institutions should take the TCFD recommendations into account while developing an ‘appropriate’ approach to disclosing climate-related risk that enhances transparency. More information is available in the corresponding HKMA White Paper.
  • AccountAbility announces three developments:
    • German and simplified Chinese translations of the AA1000 AccountAbility Principles (press release)
    • Spanish, Portuguese, and Bahasa Indonesian translations of the AA1000 AccountAbility Principles (press release)
    • Latest guidance on sustainability assurance (press release)
  • The International Auditing and Assurance Standards Board (IAASB) has issued a Staff Audit Practice Alert The Consideration of Climate-Related Risks in an Audit of Financial Statement. The Staff Audit Practice Alert assists auditors in understanding what already exists in the International Standards on Auditing (ISA) today and how it relates to auditors’ considerations of climate-related risks in an audit of financial statements. Please click for more information on the IAASB website.
  • The Center for Audit Quality (CAQ) released a new report that finds external auditors can contribute to the reliability and comparability of non-GAAP financial measures and KPIs – information found outside of the audited financial statements. Please see the CAQ website for more more information.

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