Simplifying Corporate Sustainability Reporting for the Future

To facilitate corporate sustainability reporting, the International Financial Reporting Standards (IFRS) and the European Sustainability Reporting Standards (ESRS) have been formulated to provide a comprehensive framework. While 18 percent of participants in a recent poll by The Conference Board firmly believe these standards will simplify the process, 41 percent are less sure. Almost one-quarter do not think the standards will make reporting easier.

Insights for What’s Ahead: IFRS and ESRS standards form a strong base for transparent reporting of sustainability practices. With further standardization underway, C-suites can focus on these reporting requirements to model their in-house global disclosure standards. The ESRS widely covers several core ESG issues, including emissions, resource use, own workforce, community welfare, board composition, and remuneration. The IFRS supplements this to comprehensively complete the financial metrics. Information mapping, working with auditors and third-party assurance providers, assessing double materiality of company-specific sustainability variables, periodically reviewing internal policies, sustainability training, and building ESG fluency across the company are some of the ideal ways of working for companies.

To catch up with the IFRS and ESRS standards for corporate sustainability reporting, companies should take a proactive approach toward sustainability reporting. They can start by focusing on collating, verifying, and classifying information related to their ESG practices, as covered under these reporting requirements. Companies can then model their in-house global disclosure standards after these reporting requirements. This exercise might be time consuming, but it will help build a robust foundation for a simplified and smooth-sailing process in the future. By doing so, companies can benefit from the comprehensive coverage of sustainability metrics under these standards, leading to more effective sustainability strategies benefiting both their stakeholders and the planet. For more information, read Telling Your Sustainability Story.