Media Release
Wednesday, 25 November, 2009
SUSTAINABILITY REPORTING MUST PAINT CLEARER PICTURE
Sustainability information about companies has high credibility in the business and finance sector but there is still
confusion about the best way to report it, a CPA Australia survey of the investment community in key financial
centres has found.
Releasing the findings of the organisation’s latest report Valuing Sustainability Reporting, in Hong Kong, CPA
Australia President Richard Petty said there was clearly a demand for sustainability information but many
respondents to the survey were concerned about how well the information was disclosed.
“There are concerns that some of the reporting is unfocussed which dilutes its significance as a source of
information for making investment decisions about companies,” Professor Petty said.
“In the aftermath of The Global Financial Crisis, issues of sustainability are highly relevant to a company’s long-
term future and standing in the community.
“Investors are looking for sustainability information that is communicated with efficiency and clarity. Some critical
aspects, such as governance and environmental performance, are often obscured or need to be more
comprehensive and integrated with financial reporting.”
Prof Petty said the survey also revealed that while there were examples of excellent reporting, the investment
community needed to become more literate with many of the underlying principles and frameworks of
sustainability practice and reporting in order to capitalise on the information.
Stockbrokers, investment analysts, fund managers and auditors in Australia, Asia and Europe were among those
surveyed.
The development of acceptable international standards and government leadership will be major influences on
further growth in sustainability reporting.
Prof Petty said interest in sustainability information and the expected growth of socially and environmentally
based investments had not declined in the face of the global financial crisis.
“Indeed, the views from Hong Kong respondents points to future increases with 55% believing that there will be
growth in investor interest in these portfolios.
While financial reporting was still clearly seen as the main form of disclosure, there was a significant year-on-year
increase by Hong Kong respondents (34 to 49 per cent) in perception of investor interest in environmentally or
socially responsible investment portfolios.
Stand-alone sustainability reporting was not necessarily the best way forward, with approval of this medium
dropping from 85% to 77% for Hong Kong respondents, and from 84% to 59% in the UK.
“Clearly the demand is for better integration with annual reports while the wider adoption of sustainability
reporting, with good governance at its core, has never been more important as it will enhance transparency and
accountability leading to better informed markets.
“Sustainability reporting will lead to better corporate conduct in the financial sector, for example, as it promotes
a greater level of scrutiny of supply chains which encourages management to assess the inherent risks
associated with their financial products.
Other key findings include:
Australian respondents think financial reporting is twice as important as non-financial reporting;
51% of Hong Kong respondents use sustainability reporting in risk assessment compared to 38% in
the UK and 29% in Australia;
76% of Hong Kong respondents see financial reporting’s past-performance orientation as a major
deficiency;
Hong Kong respondents scored the quality of financial services sustainability reports at an average of
6.6 out of 10, while Australian respondents rated them at 5.6 out of 10.
General awareness of international sustainability frameworks and standards is not high.
The research follows
CPA Australia’s recommendation of
a three step action plan to business and political
leaders that can be implemented within the next 2-5 years:
1- Positive initiative from Governments to engage with the business sector and various regulatory agencies to
collectively determine the best way forward to facilitate in a non-prescriptive manner the uptake of sustainability
reporting.
2-
Development by the accounting profession of a clear understanding and articulation of the complementary
aspects of financial and non-financial reporting, and how, collectively, they build corporate performance and
market confidence.
3- A collective approach by the business community to develop understanding of the best and most efficient
mediums through which business sustainability performance and risk are communicated to the market and
users.
CPA Australia has established a formal relationship with the Amsterdam-based Global Reporting Initiative (GRI)
as part of its campaign. The GRI has pioneered the development of the world’s most widely used sustainability
reporting framework which sets out the principles and indicators that organisations can use to measure and
report their economic, environmental, and social performance.
Accountants
are fundamental to the development of sustainability reporting as they capture vital corporate
information which is used as a basis for organisational decision making. As the principle source of assurance,
accountants are also vital in promoting confidence in these emerging forms of disclosure. CPA Australia,
through its 122,000 members located in 100 countries, aims to promote the take up of sustainability reporting
and to mobilise the accounting profession to take a leading role.
Click here to view the survey report.
Media Enquiries:
Licardo Prince, External Affairs Executive, Ph: +61 3 9606 9746 Mob: +61 0401 777 917.
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