Monday, 23 March 2020 12:21pm
More companies are preparing climate-risk and sustainability reports, and they are doing so in new ways, according to EY climate change and sustainability partner Terence Jeyaretnam.
"Sustainability reporting in all formats is increasing," Jeyaretnam told Footprint, adding that there were multiple factors behind the rise.
Partly, it has been driven by February 2019 changes to ASX corporate governance guidelines, he noted.
Jeyaretnam said the ASX changes "could have gone further", but nevertheless represented a significant shift.
Companies are also responding to Modern Slavery Act reporting requirements and to calls for the development of Reconciliation Action Plans, Jeyaretnam said.
Additional issues motivating various companies to boost sustainability-style reporting include growing concern about liabilities associated with PFAS and other contaminants, and animal rights (a key concern in industries such as dairy), he said.
There is also growing stakeholder demand for information on how companies ensure they behave ethically, look after workers, and protect the interests of vulnerable customers such as those under financial stress, he said.
In response to these diverse pressures, sustainability reporting "has become more integrated" within organisations, Jeyaretnam said.
"We are seeing a lot more dialogue across different functions around sustainability."
Common forms of cross-function engagement within organisations include bringing together representatives of operational, procurement, legal and financial teams, he said.
Senior executives and boards are also becoming more involved.
"There is much more interest from executives and boards as these issues become core business," he said.
The rise of team-based approaches has benefitted sustainability staff, as matters that were previously left almost entirely to them to handle are now being treated as central to business operations, he noted.
This has increased the chances of their sustainability initiatives receiving greater funding and closer attention from "the right people in the business", Jeyaretnam said.
Sustainability personnel are still playing a very important coordinating role, and are also providing "technical insight" and identifying new and emerging issues, he added.
Jeyaretnam cautioned that although the increase in reporting is noticeable, "quality still has some way to go".
There are companies that for several years have had a very mature, high-quality disclosure regimes, particularly those that have had assurance over their disclosures, he said.
Others – such as QBE and the Commonwealth Bank – have come a long way very quickly.
However, there are still "some real laggards", he concluded.