Attempting to eliminate the gap between the sustainability and finance functions within an organisation is the aim of people such as Roger Adams, executive director of policy at the Association of Chartered Certified Accountants and chairman of the Global Reporting Initiative's technical advisory committee. 'Sustainability is a key issue for many organisations and yet it's inadequately represented at board level,' London-based Adams said. 'We want to see chief financial officers and finance directors placing more emphasis on the strategic concerns brought about by issues such as climate change that will become pressing issues for directors and boards. 'Finance directors are well placed to lead the debate about the strategic impact of these issues on organisations. From the internal perspective, accountants need to play a larger role and drive the disclosure of key sustainability issues through the annual report and financial statements.' To make the finance function responsible for sustainability reporting, Adams advised giving it ownership of the process. He cited the example of Britain's Crown Estate, which manages the Crown's property and whose finance director is responsible for sustainability reporting. 'In financial reporting, there's a rigour to data collection and data integrity. One of the big criticisms of sustainability reporting has been its lack of data rigour and comparability from sector to sector or year to year within the same organisation. Data rigour is something that the accounting function treats as an everyday competence,' he said. The Institute of Chartered Accountants of England and Wales is also spearheading better sustainability reporting. Its Sustainable Business initiative argues that trusted and properly targeted information is vital to sustainability, sustainable development and sustainable business. 'Sustainable systems - both organisms in the natural world or organisations in society - learn, adapt, improve and succeed by processing information. They need to be able to modify their behaviour on the basis of this information,' the institute said in its initial report. It is no coincidence that the institutional focus on sustainability reporting comes at a time when more companies are using the GRI's G3 sustainability reporting framework. According to latest figures, more than 1,000 companies cited the G3 guidelines in their sustainability reports last year. That was a 46 per cent increase from 2007, the first year G3 became available for use by companies. That said, fewer than 3,000 companies worldwide were doing any form of sustainability reporting at all, Adams said. 'In Britain, we are looking at regulation on carbon emissions for medium and large listed companies from 2012. Leaving things to the market and in the voluntary domain is not fast enough and there are some issues, particularly carbon, where governments are going to have to make clear moves soon to really force home to the majority of companies that there is a crisis they have to address,' he said. According to Simon Copley, partner with PricewaterhouseCoopers, what started out a decade ago as reports of Hong Kong companies' environmental credentials have now become more wide-ranging sustainability reports, often published separately from an annual report and covering initiatives from workplace practices to social citizenship. 'There isn't yet a lot of legislation pushing for compulsory sustainability reports, although in Japan it is mandatory that public companies produce them. The mainland authorities have said that it is important for listed companies to produce an environmental or sustainability report,' he said. In Hong Kong, sustainability reporting remains a fledgling business despite some initiatives. In 1998, for example, an environmental reporting programme for all government departments, bureaus and government-owned organisations came into force. All these organisations are mandated to produce annual reports disclosing their environmental performance. Key listed companies, including CLP, MTRC, HSBC, Standard Chartered and Kowloon Motor Bus, also report on their environmental and sustainability credentials. 'Whether it's about the environment or social responsibility, sustainability reporting will start to be seen as good business and not something unusual,' Copley said. 'Accountants as trained scorekeepers will become more involved because these things are already part of our agenda and we will be the natural scorekeepers.'
