London, 8 June 2015 - CDSB, the consortium of business and environmental NGOs born out of the World Economic Forum, has built on its expertise in climate change reporting and applied concepts from financial reporting with environmental aspects of corporate performance and risk.
The Framework was launched by former Swedish Finance Minister, Chair of the World Economic Forum’s Global Financial System Initiative Anders Borg and Michael Izza, CEO of the Institute of Chartered Accountants in England and Wales.
In practice the Framework helps companies to provide clear, concise, comparable and actionable information to investors, trustees, directors and managers, connecting the organisation's environmental risks and opportunities with its overall strategy, performance and value creation prospects, in line with the financial information that is reported in the mainstream report.
Recognizing that information about natural capital and financial capital is equally essential for an understanding of corporate performance, the Framework aims to build trust and transparency in the reported information that is needed to foster resilient capital markets.
Michael Izza, Chief Executive of the Institute of Chartered Accountants in England and Wales said: “Not another reporting framework? I can almost hear you groan. No, not that.
One of the important aspects of this initiative is that it self-consciously sets out not do that. Instead it references other frameworks wherever possible. More importantly, the Framework seeks to achieve two things. In the first place it brings natural capital reporting into the mainstream by including that information in the annual report. It is therefore focused on investors rather than being a general report to an unspecified audience. Secondly, it seeks to move beyond the ‘what’ of environmental reporting to the ‘how’ of linking that data to an assessment of risk and strategy and thereby to the impact on financial performance.”
The Framework provides a useful guide to help companies report natural capital information in integrated reports. It will also be a key resource to aid the 5000+ companies in Europe that will be required by the EU Non-Financial Reporting directive from 2017 to report environmental information in their annual reports. The Framework will rely on methodologies such as the emerging natural capital protocol for its long term success and fills the current gap in international accounting standards for environmental and natural capital disclosure and reporting.
Senior Project Officer, CDSB
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