In an era where environmental and social responsibility are at the forefront of corporate agendas, sustainability reporting has emerged as a key practice for organisations striving for transparency and accountability. Finance teams play a pivotal role in this paradigm shift, as they are responsible for ensuring that a company’s financial and non-financial performance aligns with sustainable business practices. What is more, Climate disclosures are becoming mandatory and are increasing in scope year on year.

Sustainability reporting requirements for finance teams involve the integration of environmental, social, and governance (ESG) factors into financial disclosures. This holistic approach enables stakeholders to gain a comprehensive understanding of a company’s impact on the planet and society, going beyond traditional financial metrics. With regulatory bodies and investors increasingly emphasising sustainability, finance teams must navigate a complex landscape of reporting standards and frameworks.

One widely recognised framework is the Global Reporting Initiative (GRI), which provides a comprehensive set of guidelines for reporting sustainability performance. Similarly, the Task Force on Climate-related Financial Disclosures (TCFD) framework has gained prominence, emphasising the integration of climate-related risks and opportunities into financial reporting – this will be mandatory in 2024 for companies over a certain size. The first IFRS sustainability standards have also been developed in 2023 and will start to become common requirements within financial reports in 2024 and onwards.

For those reporting under IFRS, you may be interested to read the IFRS – Ten things to know about the first ISSB Standards published by mid 2023.

Finance teams need to familiarise themselves with these sustainability standards to effectively capture and communicate the company’s ESG efforts.

Beyond compliance, finance teams are essential in identifying key performance indicators (KPIs) that reflect the company’s commitment to sustainability. These KPIs may include carbon emissions, water usage, diversity metrics, and ethical supply chain practices. By incorporating these metrics into financial reporting, finance teams contribute to a more complete picture of the company’s overall health and resilience in the face of environmental and social challenges.

Furthermore, as investors increasingly prioritise sustainable investments, finance teams can enhance the company’s attractiveness by proactively communicating its commitment to sustainability. This involves developing a narrative that aligns financial performance with responsible business practices, showcasing the organisation’s ability to create long-term value while minimising its environmental and social footprint.

In conclusion, sustainability reporting has become a non-negotiable aspect of corporate transparency, and finance teams are at the forefront of this transformation. By embracing sustainability reporting requirements, finance teams not only ensure compliance but also contribute to building a more resilient and responsible business that meets the expectations of a changing world.

AIS Consulting are at the cutting edge of implementing ESG & Sustainability Reporting solutions and advising organisations on “Best Practice for Getting Started” on the ESG & Sustainability data capture and reporting journey.

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