Similar to financial reporting, organisations should have a board committee responsible for sustainability reporting (akin to the audit committee). PHOTO | FOTOSEARCH
Sustainability reporting by organisations, like other forms of reporting, requires an accountability framework across an entire organisation. For example, there are instances where the board of directors is not aware or familiar with its organisation's sustainability report.
If the leadership of an organisation is not providing governance and oversight, there can be little reliance placed by stakeholders on those reports. An easy way to imagine the required accountability framework is to use the analogy of financial reporting.
Most organisations have robust accountability frameworks developed for financial reporting from the board to the preparers of the reports. The internal accountability framework for sustainability reporting in organisations would take a similar structure with some variations. Key aspects to consider when developing the internal framework for sustainability reporting include the following.
The roles and responsibilities at every level of the organisation need to be defined. It should include the various functions of individuals within processes and controls for sustainability reporting. It should also identify the level within the organisation responsible for approvals and the annual schedule and timeline for reporting.
Similar to financial reporting, organisations should have a board committee responsible for sustainability reporting (akin to the audit committee). This committee will monitor and review the key targets and metrics in the organisation’s strategy in addition to its role.
Functional teams across the organisation should drive continuous capacity building. Transformation and investment roles in sustainability should have a clear reporting line to the board. Organisations should establish an assurance process for sustainability reporting using either internal or external audits or both to increase confidence in reporting.
They should align the auditing process to what obtains for financial reporting at a minimum. It should entail assessing the appropriate level of assurance (reasonable or limited) required by the organisation for sustainability reporting.
In addition, organisations should incorporate the target and metrics linked to sustainability reporting as part of the internal evaluation and performance appraisal, including for the board.
The writer is an Associate Director at PwC Kenya. He writes and speaks widely on corporate reporting.
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