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In this issue
- ISAR to hold its thirty-eighth session in Geneva in Autumn 2021
- Thirty-seventh session of ISAR held in November 2020
- UNCTAD-WBCSD organized a webinar on assurance of sustainability reports
- 2020 edition of ISAR honours conducted
- Progress on implementation of UN Development Account project to support enterprise reporting on SDGs
- UNCTAD undertaking activities under the Global Initiative towards post-Covid-19 resurgence of the Micro, Small and Medium Enterprises (MSMEs) sector
- IFRS Foundation launches consultations on establishment of a Sustainability Accounting Standards Board
- Five sustainability reporting standard-setting organizations commit to joining efforts
- IIRC and SASB announce their intention to merge
- Cheesecake factory settles charges with the SEC with respect to COVID 19 related disclosures
UNCTAD’s Intergovernmental Working Group of Experts on International Standards of Accounting and Reporting (ISAR) will hold its thirty-eighth session at the Palais des Nations in Geneva in the Autumn in 2021. The session will deal with two main agenda items:
- Review of practical implementation, including measurement, of core indicators for entity reporting on the contribution towards the attainment of the Sustainable Development Goals; and
- Climate-related financial disclosures in mainstream entity reporting: good practices and key challenges
Further information will be forthcoming soon.
The thirty-seventh session of ISAR was held from 2 to 6 November 2020 in a virtual format. It dealt with two interrelated and timely main topics:
- Practical implementation, including measurement, of core indicators for entity reporting on the contribution towards the attainment of the Sustainable Development Goals: Review of case studies; and
- Climate-related financial disclosures in mainstream entity reporting: Good practices and key challenges.
Under other business, the session also addressed two topics: progress and challenges on SDG data collection from companies towards the SDG 12.6.1; and sharing of experiences by member States that implemented the UNCTAD-ISAR Accounting Development Tool (ADT) and the core indicators on SDGs reporting (GCI).
The UNCTAD secretariat prepared two background papers (ISAR 93 and ISAR 94) to facilitate deliberations on the respective agenda items. Furthermore, several case studies on practical implementation of the core indicators (GCI) were prepared and presented at the session. The case studies included entities based in Egypt, Italy, Kenya, Poland, Saudi Arabia, South Africa, Tanzania, and United States of America as well as three companies from the Family Business Network. Close to 370 participants from about 53 countries registered for the session. In their responses on feedback forms circulated by the UNCTAD secretariat, 98 per cent of respondents indicated that they found topics addressed at the session to be relevant to their work; 92 per cent were satisfied with organizational aspects of the session; and 96 per cent said they were satisfied with the substance of the session.
With respect to the first main agenda item, the Group of Experts requested the UNCTAD secretariat to convene consultative meetings during the forthcoming intersessional period, with a view to analysing the main findings of the case studies conducted on pilot-testing of the Guidance; and proposing to the thirty-eighth session any refinements on the Guidance on core indicators for entity reporting on contribution towards implementation of the Sustainable Development Goals.
Regarding outcome on the second main agenda item, the Group of Experts requested the UNCTAD secretariat to continue monitoring progress on the implementation of the recommendations of the Task Force on Climate-related Financial Disclosures, as well as of the recommendations of other initiatives, with a view to facilitating the exchange of experiences and good practices on this topic in future sessions of the Intergovernmental Working Group of Experts on International Standards of Accounting and Reporting.
Further information on the 37th session of ISAR, including background documents, and Power Point presentation slides speakers used then can be accessed by clicking here.
On 30 October 2020, UNCTAD and the World Business Council for Sustainable Development (WBCSD) organized a webinar under the theme assurance of sustainability reports: current practices and challenges. Five prominent experts on this topic addressed: main benefits that investors expect to derive from assurance on sustainability reports; prospects for harmonizing sustainability reporting frameworks in the foreseeable future; impact of Covid 19 on preparation and assurance of sustainability reports; key considerations that preparers of sustainability reports need to make in view of pursuing assurance on their reports; and efforts being made by educators and academic institutions towards facilitating education and training on assurance of sustainability reports. This event was a follow-up to a webinar on this topic that UNCTAD and WBCSD organized on 16 June 2020.
Further information on this event, including Power Point presentation slides speakers used then can be accessed by clicking here.
UNCTAD announced recipients of the ISAR Honours 2020 at the 37th session of the Intergovernmental Working Group of Experts on International Standards of Accounting and Reporting (ISAR) on 3 November 2020. More than 100 participants joined the virtual ceremony and more than 150 people watched it on the UN Web TV website.
The awards recognize entities that excel in promoting environmental, social and governance (ESG) reporting among companies. This year, 37 public and private sector entities from 20 developing, developed, and countries with economies in transition were considered for the honours.
In the national category, the Colombo Stock Exchange in Sri Lanka was awarded for its work with the Global Reporting Initiative on enhancing corporate transparency in the country. Other recipients of the honours in the national category were the London Stock Exchange Group in the UK, for its ESG reporting guidance, and the Japan Exchange Group, for its practical handbook on ESG disclosure.
Recipients of the international honours included the Global Algorithmic Institute, for its initiative on harmonizing corporate sustainability reporting through the intersection of big data, artificial intelligence technology and UNCTAD-ISAR global core indicators. The other international honorees were the UK-based Prince’s Accounting for Sustainability Project, for its guides on ESG reporting, and the Financial Stability Board, for the work of its task force on climate-related financial disclosures.
UNCTAD also gave special recognition to the Institute of Certified Public Accountants in Kenya (ICPAK), acknowledging its efforts in incorporating sustainability reporting aspects in its Financial Reporting (FiRe) Award, an established initiative on corporate reporting in the Eastern African Region.
Further information can be accessed by clicking here.
Over the past two years, UNCTAD has been implementing a UN Development Account Project to support enterprises with reporting on the SDGs. The main objective of the project is to enable governments to develop policy frameworks on the SDG reporting by companies to strengthen their capacities to measure and monitor the private sector contribution to the implementation of the 2030 Agenda; including to provide data on target 12.6 “Encourage companies, especially large and transnational companies, to adopt sustainable practices and to integrate sustainability information into their reporting cycle” and indicator 12.6.1. “Number of companies publishing sustainability reports.” The project is being implemented in Colombia and Guatemala in Latin America, and Kenya and South Africa in Africa.
The following activities have been undertaken over the recent months:
UNCTAD and the Colombian Institute of Corporate Governance (ICGC) held a virtual meeting on 11 September 2020 to present the Development Account 11th Tranche Project titled Enabling policy frameworks for enterprise sustainability and SDG reporting in Africa and Latin America and UNCTAD’s Guidance on core indicators on entity reporting on contribution towards implementation of the SDGs (GCI). The meeting was attended by the Colombian Stock Exchange and CEOs and senior staff from around 20 companies which are members of the ICGC’s network such as Ecopetrol, Carvajal, Grupo Argos, Grupo Energia Bogota, etc. The meeting aimed at advancing the application of the core SDG indicators among big companies in Colombia. It also highlighted findings and recommendations of the national action plan for high quality sustainability/SDG reporting with a view to promoting its implementation.
A thorough assessment of the national sustainability/ SDG reporting infrastructure in Guatemala was conducted from July till October 2020. Gaps and priorities were identified in the assessment process. This also included the preparation of another GCI case study for TRECSA. This case study is also considering a company that implements the UNGC principles to explore complementarities between the GCI and the Communication of Progress of the UNGC.
UNCTAD together with the Ministry of Economy, the Secretariat of Planning and Programming of the Presidency of Guatemala (SEGEPLAN) and CentraRSE held a National Consultative Workshop virtually on 21, 22 and 23 October 2020. The Workshop aimed at validating findings of the implementation of UNCTAD tools in Guatemala, such as the Accounting Development Tool (ADT) and the Guidance on core indicators for entity reporting on contribution towards implementation of the SDGs (GCI), undertake discussions on sustainability/SDG reporting, and agree on a preliminary list of gaps, priorities, and recommendations to strengthen the national infrastructure for accounting and sustainability/SDG reporting. The meeting was attended by 48 participants from 28 key entities including institutions in charge of the implementation of the SDGs and entities involved in financial and sustainability/SDG reporting at the national level.
Virtual meeting of beneficiary countries
In addition, during the 37th session of ISAR, a meeting with 16 representatives from the beneficiary countries of the Development Account project 1819H took place virtually on Monday, 2 November, 2020. The meeting allowed beneficiary countries of the Development Account 11th Tranche Project Enabling policy frameworks for enterprise sustainability and SDG reporting in Africa and Latin America, to receive updates on the progress of implementation of national activities and to share experiences, express their views and discuss common challenges faced by countries in their efforts to strengthen policy frameworks for enterprise sustainability/SDG reporting. The meeting was organized to respond to a request from beneficiary countries to use the ISAR session as an opportunity to share lessons learned throughout the project implementation within and across regions to facilitate a harmonized approach towards developing policy frameworks on sustainability and SDG reporting by companies.
Project implementation in South Africa was initiated last year. UNCTAD jointed efforts with the Department of Trade & Industry (the dti) to organize the kick-off meeting that was held on 21 November 2019 in Pretoria, South Africa. It encouraged a participatory process that is key for the multi-stakeholder nature of the Development Account and marked the beginning of activities at the national level. During the meeting UNCTAD shared details on the objectives, activities and expected outputs of the project and presented UNCTAD tools, such as the Accounting Development Tool (ADT), the Guidance on Core Indicators (GCI) as well as the Metadata Guidance on the SDG indicator 12.6.1 that will be used during the implementation period. The national coordinator shared how the assessment phase of the project is organized based on the ADT application, including how it would be used towards development of an enabling policy framework for enterprise sustainability and SDG reporting. The meeting was attended by 33 stakeholders representing key institutions involved in the implementation of the SDGs, as well as those institutions involved in financial and non-financial reporting at the national level.
Following the launch of the project, the national assessment of the country’s capacity for high-quality corporate reporting has been initiated. The assessment has been carried out based on UNCTAD’s Accounting Development Tool (ADT) that intends to assist in identifying priorities in order to develop the country’s action plan towards facilitating high quality sustainability reporting by companies based on international requirements, best practices and standards.
On 9 July 2020, a virtual project meeting was organized to discuss progress on project activities in the country and elaborate on the interim results of the national assessment of the sustainability reporting infrastructure. It focused on the following agenda items: current progress of the project, preliminary results of the national assessment, development of consensus on inconsistencies in the feedback received as well planning the next steps. The meeting gave participants an opportunity to learn about insights discovered at the assessment phase, receive technical guidance and engage in further progress of the project as well as identify gaps in the system and discuss further developments required for harmonization of sustainability reporting in the country.
The national workshop on the implementation of the Development Account 11th Tranche Project was held virtually during 28-30 October 2020. It helped to validate the findings of the implementation of UNCTAD tools, undertake discussions on sustainability and SDG reporting and agree on a preliminary list of gaps, priorities, and recommendations. The workshop was attended by 36 key agencies and stakeholders in the area of corporate reporting.
Further information on this Development Account project can be accessed by clicking here.
Accounting Training Manual for MSMEs
Based on its Guidance on Accounting for SMEs (SMEGA 3) UNCTAD has developed Accounting Training Manual for MSMEs. A pilot Training of Trainers (TOT) webinar targeting accounting and reporting trainers in English-speaking developing countries took place on 17 December 2020. The webinar was attended by more than 80 participants who provided valuable feedback on the Training Manual for further consideration. UNCTAD will further adapt the Training Manual for Francophone and Spanish-speaking developing countries and deliver two corresponding TOTs for these countries in January and February 2021. This initiative is part of UNCTAD activities that are being implemented under the cluster Improving Access to finance of the framework of the “Global Initiative towards post-Covid-19 resurgence2 of the Micro, Small and Medium Enterprises (MSMEs) sector, a UN Development Account project aimed at improving financial literacy in the MSMEs and to facilitate access to finance, including to financial aid in the post COVID-19 resurgence.
A webinar on practical application of the GCI conducted in the Russian Federation
UNCTAD contributes to the progress of the MSME Surge project by building capacity of MSMEs to use its existing tools such as Guidance on core indicators for entity reporting on contribution towards implementation of the Sustainable Development Goals (GCI) and a Training Manual on its application. An important means to achieve this objective is the adaptation of the GCI to region and country specific environments to ensure its further promotion and ease of practical application, particularly in the MSME sector. The first webinar in this series was held virtually in Russia on 27 November 2020. It was organized by UNCTAD in cooperation with Eurasian Institute of Certified Public Accountants (EICPA) and the professional organization of accountants and auditors CPA RUSSIA that supported by carrying out relevant work within the framework of adapting the GCI to the Russian environment, including for use in the MSME sector. The webinar provided information on the main aspects of the GCI, highlighting some findings from case studies conducted in Russia and other countries and information on developing further case study on the GCI application on the SME sector in the Eurasian region in 2021. More than 70 stakeholders participated in the event, including around 30% of small and medium-sized businesses, representing various countries in the CIS region such as Russia, Kyrgyzstan, Belarus, Kazakhstan and Turkmenistan.
2The Global Initiative towards post-Covid-19 resurgence of the MSME sector (MSME Surge project) is an initiative developed under the UN framework for the immediate socio-economic response to COVID-19. The main objective of the MSME Surge project is to strengthen the capacity and resilience of micro, small and medium enterprises (MSMEs) in developing countries and economies in transition to mitigate the economic and social impact of the global Covid-19 crisis. It is led by UNCTAD and implemented in partnership with several United Nations Agencies and Economic Commissions including, UNDESA, UNESCWA, UNECE, UNECA, UNESCAP, and ECLAC. During the first phase of the MSME Surge project, partner agencies are assisting Governments and entrepreneurs by providing targeted advisory and capacity building services. The project is delivering an electronic knowledge platform and providing capacity building activities to facilitate access for governments and MSMEs to relevant information, entrepreneurship skills and business management knowledge, including focusing on areas most critical for recovery, such as access to finance, markets, and technologies.
On 30 September 2020, the Trustees of the IFRS Foundation published a Consultation Paper to assess demand for global sustainability standards and, if demand is strong, assess whether and to what extent the Foundation might contribute to the development of such standards. Further information on this news item can be accessed by clicking here.
On 11 September 2020, five framework and standard-setting institutions of international significance: CDP, the Climate Disclosure Standards Board (CDSB), the Global Reporting Initiative (GRI), the International Integrated Reporting Council (IIRC); and the Sustainability Accounting Standards Board (SASB), co-published a shared vision of the elements necessary for more comprehensive corporate reporting and a joint statement of intent to drive towards this goal – by working together and by each committing to engage with key actors, including the IOSCO and the IFRS, the European Commission, and the World Economic Forum’s International Business Council. Further information can be accessed by clicking here.
On 25 November 2020, the International Integrated Reporting Council (IIRC) and the Sustainability Accounting Standards Board announced their intention to merge into a unified organization, the Value Reporting Foundation, providing investors and corporates with a comprehensive corporate reporting framework across the full range of enterprise value driver sand standards to drive global sustainability performance. Further information can be accessed by clicking here.
On 4 December 2020, the Securities and Exchange Commission of the United States of America announced settlement of charges against The Cheesecake Factory Incorporated for making misleading disclosures about the impact of the COVID-19 pandemic on its business operations and financial condition. The action is the SEC’s first charging a public company for misleading investors about the financial effects of the pandemic. Further information on this news item can be accessed by clicking here.