Accounting is all about the numbers. But some items that are not easily tallied up in a financial statement are nonetheless essential to the day-to-day functions of a business. Increasingly the world wants answers to questions surrounding sustainability and environment, social, and governance (ESG) issues. More and more people want to know where their services/products are coming from, under what conditions, who is providing them, and what impact they are having on the world. Corporations are recognizing that answering these questions is not only important, but also essential to their long-term prospects.
“By setting a consistent, global framework, it helps companies know what questions to ask, what policies to have, what procedures, what management systems to actually manage these issues well.”
Sustainability and ESG reporting have begun to fill this need, but an overabundance of standards—and a lack of uniformity—makes sifting through the reported information a difficult task. While CPAs can provide attestation services for this information—and some do—the profession as a whole has yet to adopt sustainability-related services in its portfolio. This may in part be because CPAs, like the companies and individuals they serve, find the volume and variety of sustainability information overwhelming.
Recently, the CPA Journal interviewed GRI (Global Reporting Initiative) CEO Tim Mohin to discuss the GRI Sustainability Reporting Standards and discover why business owners, investors, and other stakeholders and corporations are increasingly finding the worth importance in of taking a closer look at the value of internal and external nonfinancial factors of their supply chains, resources, and employees.
“By setting a consistent, global framework for what companies should be looking for in the issues of intellectual property, corruption, ethics and any other of our standards, it helps companies know what questions to ask, what policies to have, what procedures, what management systems to actually manage these issues well,” Mohin said during the interview.
In an effort to assist businesses and corporations with understanding their impact on critical sustainability issues such as climate change, human rights, governance, and social well-being, the Global Reporting Initiative (GRI) was established to help businesses and governments worldwide understand and communicate their individual practices and procedures.
In October 2016, GRI launched the GRI Standards, which replace the earlier G4 standards and build upon the GRI’s pioneering work in standards for sustainability reporting. These standards were set by the Global Sustainability Standards Board (GSSB), which was separated from the GRI’s Secretariat in 2014. The GRI Standards enable all organizations to report publicly on their economic, environmental, and social impacts—and show how they contribute towards sustainable development.
GRI versus SASB
GRI’s roots are long and comprise many organizations—U.S. nonprofits, the Coalition for Environmentally Responsible Economies (CERES), and the Tellus Institute, as well as the United Nations Environment Programme (UNEP)—dating back to the 1970s. GRI helps businesses and governments worldwide understand and communicate their impact on critical sustainability issues such as climate change, human rights, governance, and social well-being. The GRI Standards are developed with multi-stakeholder contributions and rooted in the public interest.
The Sustainability Accounting Standards Board (SASB) was established in 2011 and is an independent, private-sector standards setting organization based in San Francisco, Calif., dedicated to enhancing the efficiency of the capital markets by fostering high-quality disclosure of material sustainability information that meets investor needs.
To see the CPA Journal interview with GRI CEO Tim Mohin in its entirety, please visit http://www.cpaj.com/.