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Is T&T ready for sustainability reporting?
In the last article, the topics covered included: the meaning of sustainability, why sustainability reporting is important and the organisation made a call for regulatory authorities in T&T to mandate some form of sustainability reporting by entities with public accountability (listed entities and state enterprises).
In the current challenging economic environment in T&T when businesses are looking to lower costs, some decision makers may question the need to expend resources on what they perceive as glitzy reporting meant for blue-chip corporations in developed countries, not us in sweet T&T.
The answer has several dimensions; the cost of reporting is not as high as some may think, sustainability reporting is a cost of doing business today and reporting on sustainability is critical for our nation’s future generations environmentally and socially.
Adopting both a long-term view and corporate social responsibility perspective regarding this issue are fundamental for our business leaders.
This article, provides some insight into the cost of sustainability reporting and provides an update regarding recent developments in the field.
Cost of sustainability reporting
The cost of issuing a sustainability report is dependent on factors such as the size of the organisation, its industry and the nature and complexity of its activities.
Many elements of the reporting process contribute to its cost, including:
• Time for senior management and other staff to discuss report contents
• Developing and implementing data gathering systems
• Time for gathering and inputting data
• Implementing new processes, including staff training, on data collection
• Time for checking information
• Preparing the report itself, involving internal resources (time, capacity building, etc), and potentially external resources (consultancy, writing/editing, layout, printing, etc)
• External verification and auditing, if applicable
Various research organisations have estimated the cost of sustainability reporting. GRI estimates range from as little as €2,000 to €100,000 per annum for multinationals. Another research organization estimated that costs are broadly in the range of US$10,000 to US$50,000 per annum.
Many entities will find the expenditure on their sustainability report to be far less significant than their expenditure on financial reporting, advertising or public relations. So, the cost of reporting is not prohibitive and will not bankrupt our reporting entities.
One may even say the cost is literally “a drop in the bucket” for those T&T’s entities that have public accountability.
By not reporting on sustainability, decisive interventions may not be prompted and, in the long run, the cost to businesses, tax payers and our society could be very significant in terms of environmental costs, healthcare costs and social services—billions of dollars.
Launch of new global standards
In October 2016, the Global Reporting Initiative (GRI), an international organisation who produce the world’s most widely used sustainability reporting standards launched the world’s first global standards for sustainability reporting, giving companies a common language for disclosing non-financial information.
The GRI Sustainability Reporting Standards will enable companies around the world to be more transparent about their impacts on the economy, the environment and society. They will also help organisations make better decisions and contribute to the United Nations Sustainable Development Goals (SDGs). The GRI Standards are the latest evolution of GRI’s reporting disclosures, which have been developed through more than 15 years of a robust multi-stakeholder process.
“The GRI Standards make it much easier for companies to report non-financial information, using a well-understood shared language,” said GRI Interim Chief Executive Eric Hespenheide.
“The Standards are more straightforward, making them accessible to potentially millions of businesses worldwide. Sustainability reporting, using the GRI Standards, is the best way for a company to disclose its economic, environmental and social impacts, thus providing insights into its contributions—positive or negative—toward sustainable development.”
For further details visit: https://www.globalreporting.org/information/news-and-press-center/Pages/... Ramoutar, ACCA International Assembly Representative, Trinidad and Tobago and Partner PwC