Singapore 2024 Event The Way Forward Slides

Singapore 2024 Event The Way Forward Slides

• 1.
  Emerging Best Practices Mandatory Requirements– Regulatory frameworks should promote rigor and define the scope of what companies report and have assured. Connected Disclosure/Assurance – Aligning sustainability disclosure with financial reporting and then connecting sustainability assurance with financial statement audit engagements will maximize value to companies and their stakeholders. Phased Approach – A proportional and phased approach to new reporting and assurance requirements, especially for smaller entities, allows time for high-quality implementation. Level of Assurance – Over time, transitioning from the current practice of limited assurance to reasonable assurance will further enhance trust and confidence. TheWayForward
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  Importance of Reporting– A harmonized, global reporting system provides the best basis (and “suitable criteria”) for robust, high-quality assurance. Global IAASB Standards – ISAE 3000 (Revised) is currently the most globally-accepted standard for sustainability assurance. ISSA 5000 will drive future consistency and quality—for all practitioners—as mandatory requirements are implemented. Ethics & Independence – High-quality sustainability information depends on an ethical framework such as the IESBA Code—addressing reporting / independence considerations. Level Playing Field – Regulation and enforcement must deliver uniform application of standards and practice—otherwise doubt / confusion about integrity and reliability will persist. TheWayForward High-Quality Global Standards
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  Importance of an Ecosystem Working withExperts – The accountancy profession must work effectively with sustainability experts to deliver the value-added services of the future. Corporate Governance – Effective board oversight of all reported information, including sustainability disclosures, is critical to investor and stakeholder confidence and decision making. Role of the Profession – Engagement with regulators, policy makers, investors and other stakeholders is needed. TheWayForward
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  Sustainability Assurance: Whatto Expect? CALL TO ACTION: The accountancy profession, regulators, preparers, investors and all users of sustainability disclosures need to engage with each other and develop a shared understanding of—and commitment to—delivering high-quality sustainability assurance. Managing Expectations: ▪ Level of assurance ▪ Scope of assurance ▪ Assurance conclusions
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  IF and WHERECOMPANIES REPORT • Oversight of sustainability strategy impacts reporting practice: ̶ Only 89% of companies that did not disclose sustainability strategy oversight issued a report with sustainability information. ̶ Companies with Sustainability Committee or Audit Committee oversight are far more likely to issue an Integrated Report. GOVERNANCE: ImpactonReporting Integrated Report Annual Report Sustainability Report No Report *Averages sum to 99% due to rounding 15% 29% 43% 40% 31% 30% 11% 1% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% No oversight Sustainability / Audit committee oversight 60% 33% 62% 42% 80% 56% 87% 77% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% GRI SASB SDG TCFD No oversight Sustainability / Audit committee oversight HOW COMPANIES REPORT • Companies with sustainability strategy oversight are more likely to reference specific sustainability reporting standards and frameworks. • Companies with oversight are twice as likely to employ TCFD to disclose risks and opportunities. Where companies report Reporting standards
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  41% 76% 59% 24% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% No oversight Sustainability/ Audit committee oversight RATE OF ASSURANCE • Nearly twice as many companies with Audit or Sustainability Committee oversight obtain assurance compared to companies that don’t disclose oversight. GOVERNANCE: ImpactonAssurance WHO PROVIDES ASSURANCE • However, oversight had little to no impact on the decision to engage an audit firm or other service provider to perform sustainability assurance. Rate of assurance Who provides assurance Note – Sustainability committee data is skewed due to roughly half of assurance coming from Germany and Spain. Have assurance No assurance 53% 58% 47% 42% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% No oversight Sustainability / Audit committee oversight Audit firms Other service provider