Sustainability reporting: Definition
Sustainability reporting is a means for companies to disclose their environmental and social performance. In certain jurisdictions, it is obligatory for companies of a certain size. Nevertheless, even when not mandated, customers, investors, and prospective employees increasingly demand information on a company’s actions to reduce greenhouse gas emissions and achieve net-zero emissions by 2050, aligning with the Paris Agreement.
For Sustainability Managers
Understanding Sustainability reporting is essential for accurately tracking and reducing your organisation's carbon footprint.
For CFOs
Sustainability reporting affects investor confidence, risk assessment, and the financial credibility of your climate disclosures.
For Sustainability Reporting
Sustainability reporting is a core element of sustainability reporting that auditors and regulators expect to see addressed.
Related Terms
ESG Reporting
An ESG report is a document released by a company detailing its impact on environmental, social, and governance aspects.
Extended External Reporting (EER) Assurance
Extended External Reporting (EER) Assurance refers to engagements that provide assurance on various forms of non-financial reporting, including integrated reporting, sustainability reporting, and non-financial reporting concerning environmental, social, and governance matters.
IFRS Sustainability Disclosure Standards
In June 2023, the International Sustainability Standards Board (ISSB) issued its inaugural pair of IFRS® Sustainability Disclosure Standards: IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and IFRS S2 Climate-related Disclosures. These standards are applicable for annual reporting periods commencing on or after January 1, 2024. Companies are mandated to apply both IFRS S1 and IFRS S2 together to demonstrate compliance with IFRS Sustainability Disclosure Standards. Nevertheless, the ISSB offers transitional relief for some requirements during the first year of application of IFRS S1 and IFRS S2.
1.5°C
The Paris Agreement commits countries to limit global warming to well below 2°C above pre-industrial levels, with an even more ambitious target of 1.5°C to avert severe climate changes. Achieving the 1.5°C trajectory necessitates halving emissions by 2030 and reaching net-zero emissions by 2050.
AASB
The Australian Accounting Standards Board (AASB) is a government agency in Australia responsible for developing and maintaining financial reporting standards applicable to entities in both the private and public sectors of the Australian economy. This includes the development of accounting and external reporting standards and guidance related to sustainability-related financial information, which is aligned with principles, caters to external report users' needs, and can be subject to assurance and enforcement.