Significant improvements to sustainability reporting and data collection are likely to be needed to meet the requirements of the forthcoming Companies Bill (formerly known as the Company Law Reform Bill), based on newly-published CIMA funded research on sustainability reporting.
Accounting for Ethical, Social, Environmental and Economic Issues: Towards an Integrated Approach by Professor Carol Adams and Dr Geoff Frost (available on www.cimaglobal.com/techresearch) has found a low level of reporting on sustainability performance or targets, which indicates that performance is not being adequately managed.
Further research into seven best practice organisations found that even leading companies are using an ad hoc, variable approach when assembling sustainability information and then integrating it into their decision making process.
Professor Carol Adams, La Trobe University, says:
This study raises the question as to how much social and environmental performance information is being collected and whether or not companies are using it when making strategic decisions. Under the proposed law directors will be required to act in a way which benefits employees and local communities, customers and suppliers yet many of them do not have the means to assess their impacts on these groups.
Charles Tilley, Chief Executive, CIMA, says:
This valuable report highlights the need for companies to address the shortcomings in the quality of their management information to aid their strategic decision making.
CIMA is dedicated to investigating and promoting the importance of sustainability and improving decision making in business through its participation in the PAIBs (Professional Accountants in Business) committee of IFAC (the International Federation of Accountants) three year action plan The role of the PAIB in Sustainability.