For non-financial reporting to be more commonly accepted and to be reported to the same level as financial reporting, there is likely going to be a fundamental change to reporting systems, panellists at a Climate Disclosure Standards Board (CDSB) suggested.
The CDSB conference, The future of Climate Change and Environmental Reporting, on 9 April in London, coincided with the launch of CDSB’s revised framework and their 10th anniversary.
CDSB special advisor Lois Guthrie asked the panellists to tell her what they want from the future. “Not what you expect, but what you want?” she said. However, the panellists responded by offering predictions alongside their hopes.
UK Financial Reporting Council (FRC) project director Debbie Crawshawe said she would like to see non-financial information reported more broadly and to be reported on with as much focus as companies’ finances are reported. She commented: “For this to happen we need to look at, not just what companies report, but how they are going to report […] I don’t believe that putting more and more information into a company’s annual report is the right answer.”
Crawshawe expanded on how this could be achieved by changing the way reports are conducted: “We need to think about the future of corporate reporting in general — whether a number of different reports are required, what assurance there should be over that information, and whether or not those different types of reports require legislative underpinnings as well.”
Natural Capital Coalition executive director Mark Gough echoed Crawshawe’s views about how the nature of annual reporting may have to be changed to better suit non-financial reporting: “We have got this model at the moment of a pipe, where we pump things for the annual report, where we think if we can structure everything in a certain way and pump it out that should be the information but we know that that isn’t working.”
Gough explained that the trust levels for companies and organisations is extremely low and that people do not believe the information in the reports: “Why are we still using this method to tell people what is going on if people don’t believe it. So it is turning into more of a lake of information where people are dipping in and out all of the time, we need to completely change the way we think about reporting over the next ten years to take account of that.”
Landsec head of sustainability and public affairs Caroline Hill also supported the idea of moving away from annual reporting describing it as ‘static’. Hill did say that it was still important for the annual report but that more continual reporting would “necessary for rebuilding trust”.
As well as discussing the way that reporting will need to evolve if more sustainability reporting is adopted, the panellists also discussed the role that technology will play in non-financial reporting in the future.
Gough said the industry is going to have to involve itself with technological opportunities rather than just leaving it to the technology companies to try and find solutions without the involvement of the industry describing he potential situation as being like “stuck down rabbit holes”. To combat this he said: “We need to get some of the other players up to speed and this is maybe a role for the CDSB.”
By Joe Pickard