The international accounting body, the Association of Chartered Certified Accountants (ACCA), has called for ASIC to issue guidelines on SRI modelled on the Global Reporting Initiative (GRI).
ACCA has been actively encouraging environmental reporting for the last 12 years and recognises the importance of transparent disclosure for both traditional financial accounting and environmental reporting according to Richard Francis, ACCA head for Australia & New Zealand.
He said ACCA was supportive of Australian Securities and Investment Commissions authored guidelines on SRI disclosure, as canvassed in the regulator’s white paper released in December.
But ACCA wants these to follow the Global Reporting Initiative.
The links between environmental and social performance and the effect on shareholder perceptions and a company’s trading position are well established said Francis.
We are trying to encourage broader focus on environmental and social reporting, he said.
Following the introduction of the Financial Services Reform Act last year providers of new financial products have to detail the degree to which ethical, social, environmental and labour issues impact on investment decisions.
Under the legislation ASIC has been given the option of releasing guidelines to support this requirement and is finalising a public consultation process on whether or not it would do so.
According to Francis the difficulty with any form of legislation is that it can encourage reactions that simply satisfy the basics of the rule without getting to the core principles the underlying the rule. He said guidelines are a useful way of countering this problem.
Adopting the GRI guidelines would not only promote awareness of environmental and social reporting generally but would also have the benefit of encouraging uniformity in reporting across the globe he said.
The GRI is a multi-stakeholder process that aims to develop and disseminate globally applicable Sustainability Reporting Guidelines. These guidelines are for use by organisations for reporting on the economic, environmental, and social dimensions of their activities, products, and services.
The GRI was set up after active participation of representatives from business, accountancy, investment and non-government organisations from around the world. See http://www.globalreporting.org
The ACCA is running a Sustainability Reporting Award in Australia this year bringing the total number of countries where it is offered to over 20.
The awards relate to environmental, social and sustainability reports. The judges are meeting in April ahead of the awards presentation at Sydney’s ANA Hotel in June.