Environmental Assurance: "Environmental Assurance
Environmental assurance is the process of gathering, analyzing, and reporting a company’s environmental risk profile and management of environmental issues. Increasingly, stakeholders are asking executives to reduce their organization’s environmental risk profile and strengthen their commitment to environmental stewardship.
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Saturday, December 25, 2010
Monday, November 22, 2010
Sustainability Organizations
AccountAbility
The AIHA Stewardship and Sustainability Committee
IRCA Associate Sustainability Assurance Practitioner
The AIHA Stewardship and Sustainability Committee
IRCA Associate Sustainability Assurance Practitioner
Sustainability Accounting and Reporting - FAQ
Sustainability Accounting and Reporting - FAQ
Sustainability Accounting and Reporting - FAQ
Published May 03, 2010
What is sustainability?
Sometimes used interchangeably with the term corporate social responsibility, the most widely accepted definition of sustainability that has emerged over time is the “triple bottom-line” consideration of 1) economic viability, 2) social responsibility, and 3) environmental responsibility.
While environmental considerations are often the focus of attention, the triple-bottom-line definition of sustainability is a broad concept. In addition to preservation of the physical environment and stewardship of natural resources, sustainability considers the economic and social context of doing business and also encompasses the business systems, models and behaviours necessary for long-term value creation.
What is the role of the CPA in sustainability and sustainability reporting?
Members in business, industry and government - can add value within their organizations by serving in an integrative role in the value creation process, linking company strategy to sustainability, evaluating risks and opportunities, and providing measurement, accounting and reporting skills.
Members in public accounting practice - can add value to their clients by providing services related to the development of sustainable business strategies, sustainability accounting and reporting, and assurance.
What types of reports are companies issuing and why?
Environment, Health and Safety (EHS) – Some entities have been reporting on their performance with respect to environment health and safety (EHS) matters for a number of years. EH&S reports cover such matters as employee health, on-the-job accident rates, emissions of certain pollutants, spills, volumes of waste generated and initiatives to reduce and minimize such incidents and releases.
Corporate Social Responsibility (CSR) - Corporate social responsibility reporting is similar in concept to HSE reporting but with a broadened emphasis on social matters such as ethical labor practices, training, education and diversity of work force and corporate philanthropic initiatives.
Sustainability Reports - As corporate reporting on environmental, social responsibility and economic performance has evolved and gained wider acceptance, the types of reports discussed above are increasingly being described as sustainability reports.
Companies are issuing corporate responsibility or sustainability reports:
What is climate change or greenhouse gas emission reporting?
Many companies report on their greenhouse gas emissions and their efforts to reduce their emissions under a variety of regulatory requirements in jurisdictions around the world, or to voluntary organizations such as the Carbon Disclosure Project, a UK-based organization, or the Climate Registry, a North American non-profit organization.
What are the requirements in the US for greenhouse gas reporting or climate change reporting?
SEC - On January 27, 2010, the Securities and Exchange Commission voted to release interpretive Guidance Regarding Disclosure Related to Climate Change. The disclosure requirements are meant to inform investors and potential investors of the climate change-related risks and opportunities that may impact company profits and operations.
The SEC Interpretive Guidance does not create new legal requirements or modify existing ones, but suggests that companies consider whether information that is currently being reported voluntarily in sustainability reports or to organizations such as the Carbon Disclosure Project, and information mandated by EPA or other regulatory requirements, should be disclosed in their SEC filings.
EPA - Effective January 1, 2010, the U.S. EPA requires large emitters of heat-trapping emissions to begin collecting greenhouse gas (GHG) data under a new reporting system. This new program will cover approximately 85 percent of the nation’s GHG emissions and apply to roughly 10,000 facilities. The first annual reports for the largest emitting facilities, covering calendar year 2010, will be submitted to EPA in 2011.It is anticipated that the information gathered from this reporting will serve to help identify opportunities for reducing emissions.
What criteria or frameworks are companies using for sustainability reporting and climate change reporting?
Global Reporting Initiative – Initially launched by Ceres to develop a framework for sustainability reporting, the GRI is now a separate multi-stakeholder organization. The GRI Framework has evolved into the de facto standard for sustainability reporting. Many large corporations use or reference the GRI Reporting Framework in their sustainability reports. These reports, to date, have generally been “stand-alone” reports that have a multi-stakeholder focus on a broad array of issues.
Climate Disclosures Standards Board (CDSB) - The CDSB is a consortium of seven business and environmental organizations that works with leading professionals in accountancy, business, standard-setting and regulation to develop and advocate a generally-accepted global framework for use by corporations in disclosing climate change-related information in mainstream reports. The AICPA is a participant in the development of the CDSB Reporting Framework.
What is “connected reporting” or “integrated reporting?”
The AICPA has joined forces along with the other major accounting bodies around the world in support of the Prince Charles of Wales’ Accounting for Sustainability Forum (A4S). In December 2009 the AICPA joined with the A4S Forum in a call for the development of a universally accepted connected or integrated reporting model.
Connected or integrated reporting, is the reporting of both financial and non-financial information, including sustainability information, in an integrated way, as contrasted with the current prevailing practice of issuing separate, stand-alone financial and sustainability reports.
The trend towards connected reporting is responsive to the perceived need for enhanced reporting that connects strategy, risk and performance, and encompasses financial measures, key performance drivers, and sustainability opportunities and impacts.
What type of assurance is provided for sustainability reports?
A variety of approaches are currently used by report preparers for assurance on sustainability reports, including professional assurance providers, stakeholder panels, and other external groups or individuals. Some companies opt to include the commentary of influential stakeholder groups or experts in lieu of a formal assurance statement.
What are the relevant standards for providing assurance on sustainability reports?
AccountAbility - the non-profit organization, has issued a corporate responsibility assurance standard that is used by many organizations internationally. Accounting firms doing corporate responsibility assurance engagements must follow International Standard for Assurance Engagements (ISAE) 3000 if there is a no national alternative.
SOP 03-2, Attest Engagements on Greenhouse Gas Emissions Information, developed by the Joint Task Force of the AICPA and CICA on Sustainability Reporting provides guidance for the application of assurance standard AT101 to greenhouse gas information. Specific guidance for providing assurance on sustainability reports has not yet been developed.
Sometimes used interchangeably with the term corporate social responsibility, the most widely accepted definition of sustainability that has emerged over time is the “triple bottom-line” consideration of 1) economic viability, 2) social responsibility, and 3) environmental responsibility.
While environmental considerations are often the focus of attention, the triple-bottom-line definition of sustainability is a broad concept. In addition to preservation of the physical environment and stewardship of natural resources, sustainability considers the economic and social context of doing business and also encompasses the business systems, models and behaviours necessary for long-term value creation.
What is the role of the CPA in sustainability and sustainability reporting?
Members in business, industry and government - can add value within their organizations by serving in an integrative role in the value creation process, linking company strategy to sustainability, evaluating risks and opportunities, and providing measurement, accounting and reporting skills.
Members in public accounting practice - can add value to their clients by providing services related to the development of sustainable business strategies, sustainability accounting and reporting, and assurance.
What types of reports are companies issuing and why?
Environment, Health and Safety (EHS) – Some entities have been reporting on their performance with respect to environment health and safety (EHS) matters for a number of years. EH&S reports cover such matters as employee health, on-the-job accident rates, emissions of certain pollutants, spills, volumes of waste generated and initiatives to reduce and minimize such incidents and releases.
Corporate Social Responsibility (CSR) - Corporate social responsibility reporting is similar in concept to HSE reporting but with a broadened emphasis on social matters such as ethical labor practices, training, education and diversity of work force and corporate philanthropic initiatives.
Sustainability Reports - As corporate reporting on environmental, social responsibility and economic performance has evolved and gained wider acceptance, the types of reports discussed above are increasingly being described as sustainability reports.
Companies are issuing corporate responsibility or sustainability reports:
- To demonstrate their commitment to the environment or social issues, to their employees and the communities they serve
- To promote transparency and solicit feedback on their performance in response to demands for information from a growing number of stakeholders including investors, customers, regulators, advocacy groups and non-governmental organizations (NGOs)
- To demonstrate their efforts to build and maintain relationships with external parties such as the community and other stakeholders
- To better manage and communicate risk
- To enhance or protect their reputation
- To grow shareholder and brand value
What is climate change or greenhouse gas emission reporting?
Many companies report on their greenhouse gas emissions and their efforts to reduce their emissions under a variety of regulatory requirements in jurisdictions around the world, or to voluntary organizations such as the Carbon Disclosure Project, a UK-based organization, or the Climate Registry, a North American non-profit organization.
What are the requirements in the US for greenhouse gas reporting or climate change reporting?
SEC - On January 27, 2010, the Securities and Exchange Commission voted to release interpretive Guidance Regarding Disclosure Related to Climate Change. The disclosure requirements are meant to inform investors and potential investors of the climate change-related risks and opportunities that may impact company profits and operations.
The SEC Interpretive Guidance does not create new legal requirements or modify existing ones, but suggests that companies consider whether information that is currently being reported voluntarily in sustainability reports or to organizations such as the Carbon Disclosure Project, and information mandated by EPA or other regulatory requirements, should be disclosed in their SEC filings.
EPA - Effective January 1, 2010, the U.S. EPA requires large emitters of heat-trapping emissions to begin collecting greenhouse gas (GHG) data under a new reporting system. This new program will cover approximately 85 percent of the nation’s GHG emissions and apply to roughly 10,000 facilities. The first annual reports for the largest emitting facilities, covering calendar year 2010, will be submitted to EPA in 2011.It is anticipated that the information gathered from this reporting will serve to help identify opportunities for reducing emissions.
What criteria or frameworks are companies using for sustainability reporting and climate change reporting?
Global Reporting Initiative – Initially launched by Ceres to develop a framework for sustainability reporting, the GRI is now a separate multi-stakeholder organization. The GRI Framework has evolved into the de facto standard for sustainability reporting. Many large corporations use or reference the GRI Reporting Framework in their sustainability reports. These reports, to date, have generally been “stand-alone” reports that have a multi-stakeholder focus on a broad array of issues.
Climate Disclosures Standards Board (CDSB) - The CDSB is a consortium of seven business and environmental organizations that works with leading professionals in accountancy, business, standard-setting and regulation to develop and advocate a generally-accepted global framework for use by corporations in disclosing climate change-related information in mainstream reports. The AICPA is a participant in the development of the CDSB Reporting Framework.
What is “connected reporting” or “integrated reporting?”
The AICPA has joined forces along with the other major accounting bodies around the world in support of the Prince Charles of Wales’ Accounting for Sustainability Forum (A4S). In December 2009 the AICPA joined with the A4S Forum in a call for the development of a universally accepted connected or integrated reporting model.
Connected or integrated reporting, is the reporting of both financial and non-financial information, including sustainability information, in an integrated way, as contrasted with the current prevailing practice of issuing separate, stand-alone financial and sustainability reports.
The trend towards connected reporting is responsive to the perceived need for enhanced reporting that connects strategy, risk and performance, and encompasses financial measures, key performance drivers, and sustainability opportunities and impacts.
What type of assurance is provided for sustainability reports?
A variety of approaches are currently used by report preparers for assurance on sustainability reports, including professional assurance providers, stakeholder panels, and other external groups or individuals. Some companies opt to include the commentary of influential stakeholder groups or experts in lieu of a formal assurance statement.
What are the relevant standards for providing assurance on sustainability reports?
AccountAbility - the non-profit organization, has issued a corporate responsibility assurance standard that is used by many organizations internationally. Accounting firms doing corporate responsibility assurance engagements must follow International Standard for Assurance Engagements (ISAE) 3000 if there is a no national alternative.
SOP 03-2, Attest Engagements on Greenhouse Gas Emissions Information, developed by the Joint Task Force of the AICPA and CICA on Sustainability Reporting provides guidance for the application of assurance standard AT101 to greenhouse gas information. Specific guidance for providing assurance on sustainability reports has not yet been developed.
Fundamentals for Sustainable Reporting
http://www.aicpa.org/InterestAreas/BusinessIndustryAndGovernment/Resources/Sustainability/DownloadableDocuments/Governance%20and%20Sustainability.pdf
Recent Activity on Connected Reporting
Accounting Groups Back Integrating Sustainability, Financial Reports
By Matthew G. Lamoreaux
August 2, 2010
A new international committee formed Monday by the Prince of Wales’ Accounting for Sustainability Project (A4S) and the Global Reporting Initiative (GRI) will work to integrate the way companies report on strategy, risk, governance, financial performance and sustainability.
The International Integrated Reporting Committee (IIRC), whose high-profile members include the heads of FASB, the International Accounting Standards Board (IASB), the International Federation of Accountants (IFAC), each of the Big Four firms, representatives of some of the world’s largest institutional investors and governance organizations, is the result of a decision made last December at a meeting of more than 20 organizations including the AICPA to form a committee that would oversee development of an integrated reporting model (see Proposal: Connect Sustainable Activities and Financial Reports).
The organizations agreed that part of the problem in reporting on sustainability issues is that numerous organizations are developing standards but no single organization is coordinating the efforts.
“The intention is to help with the development of more comprehensive and comprehensible information about an organization’s total performance, prospective as well as retrospective, to meet the needs of the emerging, more sustainable, global economic model,” the A4S and GRI said in a joint press release.
“The case for globally consistent financial reporting standards is well understood and accepted,” said IASB Chairman Sir David Tweedie in the press release. “It is appropriate to apply the same global approach to other aspects of corporate reporting. This initiative represents an important step on that journey.”
“The goal of the IIRC is not to increase the reporting burden on companies and other entities,” said IFAC CEO Ian Ball. “Rather, it is to help them and all their stakeholders make better resource allocation decisions. All of us have a stake in a sustainable society. While integrated reporting alone cannot ensure sustainability it is a powerful mechanism to help us all make better decisions about the resources we consume and the lives we lead.”
The A4S project was launched in 2004 by The Prince of Wales to develop decision-making and reporting systems that take into account the longer-term and broader consequences of actions and are capable of responding to the sustainability challenges faced in the 21st century. A4S works with businesses, investors, governments, accounting bodies, the public and academics to build an international consensus around the need for a generally accepted integrated reporting framework and to develop practical guidance and tools to embed sustainability into decision-making processes.
The GRI has developed a widely used sustainability reporting framework and is committed to its continuous improvement and application worldwide. This framework sets out the principles and indicators that organizations can use to measure and report their economic, environmental and social performance.
Connected Reporting Format - A proposal
Proposal: Connect Sustainable Activities and Financial Reports
By MATTHEW G. LAMOREAUX
DEC. 23, 2009
Representatives of more than 20 organizations including the AICPA agreed last week on a proposal to form a committee that would oversee development of an integrated reporting model. The model would connect reporting of organizations’ strategy, risk and financial and sustainability performance.
The proposals were the outcome of a London meeting of the Accounting for Sustainability Forum hosted by the Prince of Wales. “Sustainability is a global issue,” said AICPA Senior Vice President Arleen Thomas, who represented the Institute at the meeting. “Participation with other major accounting bodies in international groups like the Accounting for Sustainability Project is essential to success in providing thought leadership and influence in this emerging area.”
The members of the forum agreed that part of the problem is that numerous organizations are developing standards but no single organization is coordinating the efforts. “Businesses and investors both need universally accepted standards and frameworks that reduce complexity and provide consistent comparable information,” says AICPA Technical Manager Ken Witt, who was part of the Institute’s delegation.
As a result, the group proposed that accountability for the oversight and development of the reporting model should rest with a single body. However, that single body, which the proposal calls an International Connected Reporting Committee, would not be responsible for developing accounting standards. Instead, it would “provide strategic oversight and be a source of guidance in relation to the reporting model.”
The proposal says the committee would:
- Provide vision and identify key elements and how they need to interlink to provide insight and understanding;
- Provide a road map to support the model’s development;
- Establish structures and mechanisms to achieve collaboration between existing organizations in order to enhance connectivity and reduce proliferation;
- Identify emerging issues that may demand a global solution and future incorporation into the reporting framework; and
- Sponsor and coordinate research across all aspects of the model so as to inform and shape its development.
The proposal concludes by saying, “It is hoped that action to establish an ‘International Connected Reporting Committee’ will have been taken by the end of 2010.” To that end, it provides next steps, including establishing a working group comprising representatives of interested organizations, developing the governance structure for the committee and achieving broader support for the proposals among key stakeholder groups.
Connected Reporting Format
http://www.accountingforsustainability.org/files/pdf/Connected%20Reporting.pdf
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