Environmental, Social, And Ethical Factors On Performance Measurement 6 / 12

IFRS

No required disclosure requirements for environmental and social matters.

However:

  1. Provisions for environmental damage are recognised under IAS 37

  2. IAS 1 requires disclosure to a proper understanding of financial statements.

Voluntary Disclosure

Voluntary disclosure and the publication of environmental reports has now become the norm for quoted companies in certain countries as a result of pressure from stakeholder groups to give information about their environmental and social 'footprint'.

The creation of ethical indices has added to this pressure - for example the FTSEA Good index in the UK, and the Dow Jones Sustainability Group Index in the US.

Sustainability Reporting

This integrates environmental, social and economic performance data 

The most well-known is the Global Reporting Initiative.

  1. The GRI is a long-term, multi-stakeholder, international not-lor-profit organisation whose mission is to develop and disseminate globally applicable GRI Standards on sustainability reporting for voluntary use by organisations.

Environmental Reporting

This is the disclosure of environmental responsibilities and activities 

Increasing awareness of environmental issues and pressure from non governmental organisations (NGOs) make this vital to an entity

Social Reporting

This discloses the social impact of a business's activities:

Eg.

Charity donations
Giving employees time to support charities
Employee satisfaction levels and remuneration issues;
Community support; and
Stakeholder consultation information

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