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It assesses the current state of corporate disclosures on key social and environmental issues in different regions around the world and outlines five disclosure and decision-making approaches that can support business to create inclusive and sustainable value for society over the long-term.
Social and environmental challenges are becoming more complex. Increasingly, these two issues are seen by government, business and finance as interconnected priorities.
Professional accountants, finance teams in business and investors can support social and environmental value creation in many ways, such as risk analysis of climate change issues, social impact evaluation and assessing the quality of non-financial information. These are key areas for the accountancy profession around the world, and are being incorporated into investment processes including asset valuation, asset allocation, and risk management. Corporate disclosures and wider ESG data serve as the bedrock for these investment processes.
Specifically, businesses are being called on to meet:
1. increasing requirements from governments for better social and environmental performance
2. greater demands for more precise environmental, social and governance disclosures from investors
3. calls from central bank governors to understand the financial stability risk that climate change poses to financial markets
4. changing customer preferences that need new business models to produce products and services that meet new social and environmental expectations.
5. a volatile environmental landscape in crisis and escalating social problems.
Full report - Social and environmental value creation