The Future of ESG Is … Accounting?

An article from Harvard Business Review analyses how a little known but vastly important revolution in accounting can help secure a more sustainable future-

• Companies, investors and consumers alike are frustrated by a lack of standardized accounting for corporate ESG performance. This might be about to change thanks to a recent proposal from the IFRS Foundation, which is the body that oversees the work of the International Accounting Standards Board (IASB) in setting financial reporting requirements for most companies in the world.

• If the proposal is adopted, investors and other stakeholders will suddenly have a much clearer view of a company’s sustainability performance—just as they do its financial performance. While most companies today issue sustainability reports, these are divorced from their financial reports, making it difficult to see the relationship between financial performance and sustainability performance. The proposal from IASM will make it possible for the ideal of integrated reporting to be realized.

Source: https://hbr.org/2020/12/the-future-of-esg-is-accounting