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- Thirty-first session of UNCTAD-ISAR highlights importance of compliance monitoring and enforcement for high-quality corporate reporting
- UNCTAD holds workshop on the future direction of corporate reporting
- 2014 Climate Change Summit mobilizes support of institutional investors
- European Union Directive on Disclosure of non-financial and diversity information published
- The SME Implementation Group submits recommendations to the IASB
- Global Reporting Initiative announces a new governance structure
Thirty-first session of UNCTAD-ISAR highlights importance of compliance monitoring and enforcement for high-quality corporate reporting
The main agenda item of the session dealt with good practices in monitoring and enforcement, and compliance mechanisms in the context of achieving high-quality reporting. The Group of Experts also discussed additional topics, including capacity-building needs of member States and applications of the UNCTAD-ISAR Accounting Development Tool (ADT). A number of panel discussions featuring prominent experts addressed key issues on the different topics tabled at the session. Speakers included: Gonzalo Ramos, Secretary-General, Public Interest Oversight Board (PIOB); David Wright, Secretary-General, International Organization of Securities Commissions; Richard Thorpe, Head, Accounting and Auditing Issues and Policy, Financial Stability Board; Gert Luting, Advisor, International Forum of Independent Audit Regulators; Markus Grund, Chair, Accounting and Auditing Working Group, International Association of Insurance Supervisors; Michel Prada, Chair, Trustees of the International Financial Reporting Standards Foundation, Mike Hathorn, Board Member, International Federation of Accountants; Teresa Fogelberg, Deputy Chief Executive, Global Reporting Initiative; and Neil Stevenson, Brand Director, International Integrated Reporting Council.The Group of Experts concluded the session by reaching agreed conclusions on the agenda items it discussed. Delegates agreed on the critical role that the monitoring of compliance and enforcement mechanisms play in effective implementation of global standards and codes for high quality corporate reporting. The session called on regulators and enforcement authorities as well as other stakeholders around the world to make concerted efforts towards building efficient monitoring of compliance and enforcement mechanisms with a view to ensuring consistent implementation of international standards and requirements on corporate reporting.Furthermore, delegates reiterated the importance of the Accounting Development Tool (ADT) for facilitating an integrated and systemic approach to building solid national regulatory, institutional and human capacity foundations for high-quality reporting. It provides a framework for consistent and efficient implementation of globally recognized accounting and reporting standards, codes, benchmarks and good practices, along the entire corporate reporting supply chain. Furthermore, the ADT enhances policy dialogue and trust among major stakeholders in the area of accounting and reporting.
A full report on the thirty-first session of ISAR, including agreed conclusions, background documentation, presentations and a photo gallery of the session can be accessed by clicking here.
In conjugation with the thirty-first session of ISAR, the UNCTAD secretariat organized a workshop under the theme The Future Direction of Corporate Reporting Models that took place on Monday 13 October 2014 at the Palais de Nations in Geneva. The workshop attracted over 100 participants and featured globally recognized experts who addressed the topic from different perspectives. The main objectives of the workshop were to address how high-quality reporting can enhance the positive impacts of enterprises on sustainable development, and how to facilitate promotion of a cohesive approach to reporting.The workshop highlighted the following needs: 1) addressing sustainable development and sustainable development goals; 2) facilitating the incorporation of social and environmental issues into decision making for companies; 3) providing better information for SRI funds and other investors; 4) increasing mandatory reporting on sustainability and social responsibility issues whilst allowing for innovation in reporting; 5) focusing on material issues; 6) looking at how reporting can change behaviour, encourage integrated thinking and integrated management; 7) increasing reporting on products, on supply chains, on finding the true price of externalities and addressing the issues of stranded assets through reporting; 8) reporting on a sustainability context and facilitating performance improvement through that; 9) identifying what underpins value creation and the way to measure it; 10) focusing assurance on reporting, value creation and strategy.
To access further information on the workshop, including presentations and photos, please click here.
The 2014 Climate Change Summit which was held in New York on 23 September 2014 attracted 100 Heads of State and Government and more than 800 leaders from business finance and civil society. The Summit was organized with a view to raising political momentum for a meaningful universal climate agreement in Paris in 2015 and galvanizing transformative action in all countries to reduce emissions and build resilience to the adverse impacts of climate change.
The Summit mobilized support from different stakeholders and a number of initiatives were launched. Some examples are: a coalition of institutional investors committed to decarbonizing US$100 billion of their investments by December 2015, and to measure and disclose the carbon footprint of at least US$500 billion investments; three major pension funds from North America and Europe announced plans to accelerate their investments in low-carbon investments across asset classes up to US$31 billion by 2020; and leaders of the insurance industry, representing US$30 trillion in assets and investments committed to creating a Climate Risk Investment Framework by the time of the next Summit in Paris in 2015. For further information, please click here.
On 15 November 2014, the Parliament and Council of the European Union published Directive 2014/95/EU on disclosure of non-financial and diversity information by certain large undertakings and groups. The Directive notes that coordination of national provisions concerning the disclosure of non-financial information in respect of certain public interest entities is of importance to shareholders and other stakeholders alike and that coordination is necessary in such national provisions because most of such large public interest entities operate in more than one member State of the European Union.The Directive requires public interest entities that fall within its scope to provide non-financial statements about environmental matters, details of the current and foreseeable impacts of the entity’s operations on the environment and as appropriate, on health safety, the use of renewable and/or non-renewable energy, green house gas emissions, water use and air pollution. With respect to employee-related matters, the information provided in the non-financial statement may cover the actions taken by the entity to ensure gender equality, implementation of fundamental conventions of the International Labour Organization, working conditions, social dialogue, respect for the right of workers to be informed and consulted, respect for the trade union rights, health and safety at work and the dialogue with local communities, and/or the actions taken to ensure the protection and the development of those communities. With regard to human rights, anti-corruption and bribery, the non-financial statement could include information on the prevention of human rights abuses and/or on instruments in place to fight corruption and bribery.
Entities subject to the Directive are advised to prepare non-financial information on the basis of national frameworks, European Union-based frameworks such as the Eco-Management and Audit Scheme (EMAS), or international frameworks such as the United Nations (UN) Global Compact, the Guiding Principles on Business and Human Rights implementing the UN ‘Protect, Respect and Remedy’ Framework, the Organisation for Economic Co-operation and Development (OECD) Guidelines for Multinational Enterprises, the International Organisation for Standardisation’s ISO 26000, the International Labour Organisation’s Tripartite Declaration of principles concerning multinational enterprises and social policy, the Global Reporting Initiative, or other recognised international frameworks.
European Union member States are required to transpose the Directive into national laws, regulations and administrative provisions by 6 December 2016 and entities subject to the Directive are required to prepare non-financial statements starting from 1 January 2017.
The full text of the Directive can be accessed by clicking here.
At the end of October 2014, the Small and Medium Sized Entities Implementation Group (SMEIG) published its recommendations to the International Accounting Standards Board (IASB) with respect to the proposals in the Exposure Draft published in September 2013 to amend the IFRS for SMEs. The issues which the SMEIG addressed in its report include: definition of “fiduciary capacity”; accounting for income taxes; transition and effective dates; future reviews of the IFRS for SMEs; as well as application of “undue cost or effort”, definition of basic financial statements, useful life of goodwill or other intangible assets; offsetting income tax assets and liabilities, group entities with different reporting dates, use of “undue cost or effort” exemptions in a business combination, accounting for extractive activities, grouping items in other comprehensive income, cumulative exchange differences on disposal of a subsidiary, disclosure of policy for termination benefits, subsidiaries acquired and held for sale, distribution of non-cash assets, best evidence of fair value, and classification of spare parts.The full report can be accessed by clicking here.
The Global Reporting Initiative (GRI) announced on 6 November 2014 that it will implement a new governance structure. Accordingly, GRI will have separate governance structure for standard-setting, including the establishment of three new bodies: The Global Sustainability Standards Board (GSSB) will develop and approve Sustainability Reporting Standards; the Due Process Oversight Committee (DPOC) will safeguard the application of GRI’s Due Process Protocol; the Independent Appointment Committee (IAC) will appoint qualified, independent individuals to the GSSB and DPOC. Further information on this announcement can be accessed by clicking here.