The Association of Chartered Certified Accountants (ACCA) has released the latest instalment in its sustainability reporting series, ‘Sustainability Reporting: Risk and Materiality’, offering guidance to businesses on identifying material information for sustainability reporting.
The report outlines a three-step process to help organisations navigate sustainability-related risks and opportunities (SRROs), assess their impact, and determine what information should be disclosed. It emphasises the need to address both physical and transitional climate risks, which can significantly affect business continuity.
The guidance encourages companies to take a holistic approach to sustainability reporting. It will help companies in identifying sustainability-related risks and opportunities within their value chains, assessing their impact on business operations and long-term strategy; and enhancing disclosure practices to improve transparency and accountability.
The report includes real-world examples to help accountants, finance professionals, and business leaders refine their risk and opportunity communication strategies. It also highlights the importance of resource allocation to effectively manage and mitigate these risks while identifying new opportunities in sustainability.
ACCA urges businesses to integrate sustainability risk management into existing financial processes to streamline reporting efforts.
“Many organisations manage and report financial and sustainability-related matters separately. As a result, they often overlook insights they already possess,” said Aaron Saw, ACCA’s head of financial corporate reporting insights. “To reduce costs and effort while producing connected information, leveraging existing risk-management processes makes sense.”
The guidance stresses that businesses should use insights from one reporting cycle to enhance future disclosures, ensuring more relevant sustainability-related information over time.
