A partnership between the University of Sydney and CPA Australia, has successfully obtained funding under the Commonwealth Governments Australian Research Council Linkage Projects to develop a framework for managing and reporting non-financial information.
The three year, million dollar project is an essential step towards improved public confidence in sustainability management and reporting by companies, as well as public and not-for-profit sector organisations.
CPA Australia President Mr Mark Coughlin believes the broad area of corporate social responsibility, triple bottom line (TBL) reporting and sustainability is an important new frontier for the accounting profession, and CPA Australia is leading the way.
‘Companies that make the effort to report against a wider range of business performance indicators should be rewarded for their disclosure, but in the current environment and without a consistent approach these efforts are constantly undermined and often sidelined as self serving,’ said Mr Coughlin.
The three year project is intended to address these current shortcomings to give greater guidance to business along with valued and credible information for stakeholders.
Opportunity for all CPAs
As the business partner, CPA Australia has an important role to play in enhancing the practical application of any proposals coming out of the research project.
‘Our partnership enables the researchers to tap into the intellectual capital and practical experience of more than 105,000 finance, accounting and business professionals; from company director to report preparers and from right across the private, public and not-for-profit sectors,’ said Mr Coughlin indicating that CPA Australias growing overseas membership is also an important resource.
‘There is a global trend towards a wider concept of corporate accountability. Developing an effective non-financial reporting framework is essential to ensuring we are best positioned to attract future investment – that means jobs and growth for the Australian economy,’ said Mr Coughlin.
The project will assist professional and government regulators as well as many private and public sector organisations to better understand how the principles of sustainability reporting can be integrated and applied in a formal planning, risk management and decision making context.
CSR on the political agenda
The project will also ease the burden on business and government by developing a rigorous framework for classifying, measuring and reporting various forms of sustainability information, and gets underway as the debate surrounding the future of sustainability reporting gin Australia heats up.
‘Business, Government and the profession have talked around this issue for a number of years but 2005 is shaping up as the year in which we will need deliver well considered arguments to support our views on the future shape of sustainability reporting and associated obligations for business professionals,’ warned Mr Coughlin.
This year two inquiries will consider the issues of corporate accountability and whether this should be extended to a wider set of corporate and social responsibility benchmarks. The Parliamentary Joint Committee on Corporations and Financial Services (PJCCFS) inquiry into corporate responsibility announced last week will focus on directors and other officers responsibilities, but is explicitly asked to consider the appropriateness of reporting requirements and the need for regulatory, legislative and other policy approaches.
Later this year the Corporations and Markets Advisory Committee (CAMAC) has indicated it will release a discussion paper on, amongst other matters:
the potential extension of directors duties to include CSR obligations
encouraging Australian business to adopt environmental responsible practices
requiring companies to report on social and environmental impact.
CPA Australia anticipates significant political and business interest arising from two inquiries, but believes it is well placed to help shape the potential outcomes to ensure an appropriate balance between public and business interests.
‘Our success in attracting Government funding for the development of a non-financial reporting framework is clear evidence of the community interest in more effective corporate accountability that extends across a much wider set of benchmarks,’ said Mr Coughlin.
Delivering better outcomes for community, business and CPAs
However there is a risk that regulation at this point would in many ways be putting the cart before the horse.
‘We fully support effective regulation, but without the ability to objectively assess compliance, enforcing accountability becomes a burden for business and regulators and at the same time fails to deliver community satisfaction,’ said Mr Coughlin.
And for this reason CPA Australia and the University of Sydney agree that the 3 year project had important and ambitious expectations.
‘Our support for this project reflects our view that the accounting profession must continue to evolve and so apply our knowledge and expertise to meet the changing needs and expectations of the Australian community in ways that advance the opportunities for community and business,’ said Mr Coughlin.