A disclosure framework for Sustainable Development Goals (SDGs) has been put out for consultation by three accountancy bodies, closing on October 31.
The consultation paper has been penned by Carol Adams, Durham University Accounting Professor alongside Paul Druckman, Chair of the World Benchmarking Alliance, and Russell Picot, Special Advisor to the Task Force on Climate-related Financial Disclosures (TCFD).
It is endorsed by the Association of Chartered Certified Accountants (ACCA), the Institute of Chartered Accountants of Scotland (ICAS) and Chartered Accountants Australia and New Zealand (CAANZ).
The authors said the proposed framework has been developed for a range of stakeholders, including investors, in order to obtain reliable information on long-term value creation.
It also applies to institutional investors. The paper acknowledged that reporting by asset owners and asset managers “is critical to shifting investment to contribute to the SDGs.”
Four main areas of disclosures are suggested under the following banners: management approach, strategy, governance and performance and targets.The proposed framework proposes five steps.
1. Identify external factors that affect SDGs, which should involve stakeholder engagement.
2. Identify material sustainable development information and disclosing the role of management to integrate SDGs into the organisation’s processes.
3. Describe how this material information influences the business model strategy for the achievement of SDGs.
4. Alignment of SDGs with the governance strategy so that SDGs are embedded “into the fibre of the organisation”. Recommended governance disclosures in that regard include the description of the board’s oversight processes to drive progress in this respect.
5. Report on the impact and contribution towards SDG targets. The authors highlighted that the lack of assurance of this information could be a barrier for investors.
As an alternative, it is proposed “appointing a panel of independent experts and representatives of key stakeholders to provide comment on the recommended narrative disclosures.”
The consultation paper does not cover the role of responsible tax practices in meeting SDGs, as it has been raised by many stakeholders including the OECD.
It is, however, within the scope of the consultation to seek additional matters that should be addressed by the SDG disclosures framework.