The debate around the broader disclosure of environmental, social and governance (ESG) issues is important. FEE believes it can make a difference to the most necessary transition to a sustainable economy.

A considerable number of sustainability reporting guidance documents have appeared in recent years. This demonstrates an increasing recognition of the importance of the subject. However, the multiplicity and sometimes the lack of consistency between the various guidance documents can be confusing or at least unclear, for reporting organisations and stakeholders alike.
 

As there is no unique globally recognised standard, there is a need to find a commonly agreed methodology on how to use the various guidance documents to meet stakeholders’ needs (i.e. it is about “selecting” and not “adding” information).

Before deciding on KPIs, factors crucial to the long-term continuity of businesses should be identified and considered.
 

In addition, FEE recommends that regardless of the guidance documents that entities opt for, there are criteria that should be met in deciding what information should be reported; relevance, materiality, consistency and reliability (all being equally important).

Furthermore, the use of these suitable criteria could address the risk of missing KPIs that are material and relevant – a potential concern in adopting a “comply or explain” approach on KPIs.
 

An important emerging issue linked to corporate reporting is the development of the integrated reporting framework. Whether a separate sustainability report or an integrated annual report is considered, the above mentioned recommendation on the suitable criteria should be applied. FEE supports the increasing attention to integrated reporting as well as the further development of separate sustainability reporting. As the integrated annual report and the separate sustainability report may be targeted at different stakeholders groups, there is a demand for both.

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