Pamela Steer
President & CEO, CPA Canada
As new sustainability disclosure standards are issued and adopted, CPAs will play an increasingly significant role in supporting businesses with reporting.
Stakeholder and investor demands for greater insight into sustainability performance are pushing businesses to report on metrics beyond the bottom line creating a pressing need for a system to hold them accountable.
“Changing societal demands for greater disclosures on sustainability issues are becoming a mainstay in corporate reporting,” says Pamela Steer, President and CEO of CPA Canada. “It’s no longer just about the bottom line. There’s an expectation for organizations to take accountability for their impact on society and the environment.”
Businesses around the world are embarking on a complex journey to monitor, measure, and publicly report sustainability information and CPAs will play a crucial role in helping them navigate this rapidly evolving space.
The state of sustainability reporting
Sustainability reporting encourages business leaders to embrace responsible, sustainable practices within their organizations. However, a lack of a clear global baseline for reporting has left the space cluttered with various ways to report risks, metrics, and targets. Comparability, scalability, and transparency have suffered as a result.
“Right now, sustainability reporting is often hit and miss — and, worse, potentially misleading due to the multitude of voluntary frameworks,” explains Steer. “While many organizations are trying to track their sustainability performance, there’s no consensus on the information that should be reported and how. Fortunately, substantive progress has been made to bring much-needed transparency and consistency to sustainability standard-setting.”
Global standards are here
On June 26, the International Sustainability Standards Board (ISSB) published two disclosure standards – General requirements for Disclosure of Sustainability-related Financial information (IFRS S1) and Climate-related Disclosures (IFRS S2). The release is a major step in creating a framework that requires the global business community to disclose material information on exposure to sustainability and climate-related risks and opportunities.
And more are coming. The ISSB is in the process of collecting feedback on priorities for the next round of standards.
The Canadian Sustainability Standards Board (CSSB), will work closely with the ISSB to develop and facilitate the adoption of IFRS Sustainability Disclosure Standards for the Canadian marketplace and ensure that the Canadian perspective is part of international standard-setting decisions.
“It’s important to have a common standard, as standards engender trust and accountability,” says Steer. “You cannot begin to improve until you can accurately measure where you are, set goals, and then measure progress toward meeting them.”
CPAs bring a host of valuable skills to the table when it comes to successful decision-making in a world overloaded with data.
Now is the time to build capacity in this space to react to changes in market demands as new roles and opportunities are established. The education and training needs for sustainability reporting and assurance are greater than the current capacity to deliver. CPA Canada is a designated Capacity Building Partner of the ISSB and will continue to support the effective implementation of upcoming standards.
CPAs: Holding business accountable
CPAs play a critical role in the capital markets, ensuring organizations report relevant and trustworthy information. This responsibility is now extending to sustainability standards.
CPAs can help companies build effective governance and internal controls to ensure accurate and timely reporting. The Canadian CPA profession has been building sustainability literacy for decades, compiling a significant portfolio of thought leadership and resources to encourage a more holistic view of performance.
Sustainability is a lens that will help organizations achieve more strategic foresight, but it’s important to recognize that not all are starting from the same place. Canada’s CPAs will be pivotal in helping organizations – from global operators to small startups – understand the impact of sustainability reporting on their business models and operations.
“CPAs bring a host of valuable skills to the table when it comes to successful decision-making in a world overloaded with data,” says Steer. “In fact, our profession has a proven history of providing the analysis, reporting, and assurance necessary to evaluate performance and manage risk. Now, we can apply those skills to help tackle some of the most pressing issues of our time.”
Visit cpacanada.ca to learn about how CPAs can support businesses with sustainability disclosure. Take a step in futureproofing your career with the ESG Certificate: cpacanada.ca/newfrontier.
