Corporate Reporting on Sustainability with Meaningful Disclosures on Climate-related Issues : For a Sustainable Future
Corporate Reporting on Sustainability with Meaningful Disclosures on Climate-related Issues : For a Sustainable Future

Author(s): Hristina Oreshkova
Subject(s): Economy, Business Economy / Management, Accounting - Business Administration, Socio-Economic Research, Green Transformation
Published by: Университет за национално и световно стопанство (УНСС)
Keywords: corporate sustainability reporting; climate change; climate-related disclosure; transparency; consistency; coherence
Summary/Abstract: Scientists have long agreed that climate change will be a major challenge for humanity in the coming decades. Extensive research supports this view and hypothesis. There is widespread agreement that climate change is accelerating to the point where it poses an existential threat to humans and other living things, as well as unprecedented challenges (risks) to businesses in various sectors of the economy. In the midst of this global urgency, there is a growing need for truthful, transparent and consistent information on climate-related issues. It is therefore vital that these issues are brought to the forefront of corporate governance and management awareness so that good disclosure practices can be developed on a large scale to adequately respond to the threat. Therefore, where deemed material, current or potential risks (physical or transitional), dependencies (on) and exposure to such risks, and opportunities (prospects) for mitigation and adaptation should be thoroughly analysed, assessed, reviewed and disclosed. It is the author’s contention that the trustworthiness, transparency and consistency (coherence and comparability) of climate-related disclosures have proven to be of great importance in achieving disclosure effectiveness and usefulness for interested parties – present and potential investors, creditors, lenders, employees and all members of society. The author’s objective is to identify, discuss and highlight key issues and to justify the global need for a strategic approach to the development, adoption and implementation of corporate policies that enable companies to provide meaningful information to stakeholders and to disclose it in a transparent, consistent and well-organised manner. The article identifies and analyses the main reasons for the prevailing lack of quality in climate-related reporting and disclosure practices world-wide, and justifies the global need to address and overcome existing weaknesses and vulnerabilities. It is reasonable to expect that a forward-looking approach would benefit not only the company by enhancing its performance, reputation and public trust, but also investors, other stakeholders, present and future generations and their sustainable future. By adopting such an approach, companies can, over time, gradually contribute to the world’s transition to a low-carbon, climate-resilient economy. A key prerequisite for achieving this is greater alignment of the conceptual frameworks used around the world, as well as the mechanisms and means to influence reporting and disclosure policies and practices.

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