Clearing the air on sustainability reporting

MENTION sustainability reporting and it is enough to cause company executives to shudder about the potential compliance costs. Such concerns, however, fail to take into account the higher corporate social responsibility expectations that a more enlightened populace demands of companies. Stakeholders increasingly expect access to non-financial information in these sustainability reports, such as investors who incorporate sustainability factors in their investment decisions.

In another sign of the changing times, more than 185 countries committed to setting national targets to reduce carbon emissions at the recent 2015 Paris Climate Change Conference of Parties. Businesses in these countries may now face pressure from their governments to develop, disclose and align their carbon reduction strategies with the respective national targets.

"Comply or explain" requirements have already been put in place in a number of global stock exchanges including Australia, Brazil and South Africa to varying degrees. For example, large listed companies in the European Union will have to disclose non-financial issues such as environmental, social or employee matters and bribery from 2018 onwards.