Financial reporting

Many companies have to report on their sustainability impact as part of their financial reporting process. In some industries, this is only mandatory for companies of a certain size (E.G. over 500 employees), whilst in other industries – the financial industry; agriculture, food and forest products industry; energy industry; materials and buildings industry; and transportation industry – it is mandatory for companies of all sizes.

Below are the two predominant reporting frameworks that companies comply with as part of their reporting:

• In June 2023 the International Sustainability Standards Board (ISSB) issued their inaugural sustainability disclosure standards, marking a new era of sustainability related disclosures in capital markets worldwide. The Standards not only help to improve trust and confidence in company disclosures on sustainability – informing investment decisions – but also create a common language for disclosing the effect of climate-related risks and opportunities.

• On January 5 2023, the Corporate Sustainability Reporting Directive (CSRD) [EU] came into force. This new directive modernises and strengthens the rules concerning the social and environmental information that companies have to report. These rules ensure investors and other stakeholders have access to the information they need to assess the impact of companies on the environment, and the financial risks and opportunities that arise from sustainability issues.