Many times when I explain what I do, I get back “So, you are doing Sustainability Reporting?” Unfortunately for them, I don't let them go for the next 30 minutes, not until its very clear that the disclosure is only the output. The real value comes from what changes in the business because of it.
Sustainability reporting has a reputation problem. For years, many companies produced long reports full of commitments and case studies that many times didn't influence business decisions. Ownership sat with one team, data was gathered once a year, and targets were set without a plan behind them. The result was high effort, low value and growing scepticism from investors.
IFRS Sustainability Standards S1 & S2 take a different approach. They ask a simpler question: what sustainability related issues could affect this business's prospects, and how are you managing it?
Although the focus is on financial materiality (decision-useful information for investors), it doesn't mean a company's impact on people and the planet is irrelevant. In practice, todays impacts often become tomorrows financial risks. Emissions eventually meet carbon pricing. Poor labour practices in the supply chain can lead to disruption, lost customers or litigation. Heavy water use becomes an operating constraint when supply tightens. What starts as an impact question becomes a question about cost, revenue or access to capital.
IFRS S1 & S2 rely on 4 Pillars. Last week was Governance. This week, Strategy 👇
🚦 Governance
♟️ Strategy
⚠️ Risk Management
📊 Metrics & Targets
Reach out for a chat about how to make your business more resilient and aligned with new standards.
https://www.futuroadvisory.com/appointments
Thanks for your time and attention!