Ahead of the upcoming consultation by the European Commission on the fitness of the EU corporate reporting framework, Accountancy Europe has published a position paper on how the accountancy profession contributes to EU sustainable finance strategy and has called for EU institutions to discuss this with private sector stakeholders.
According to the document the finance sector is critical to the EU’s transition to a low-carbon and sustainable economy, by ensuring that it contributes to long lasting welfare and follows the United Nations (UN) sustainable development goals (SDGS). Accountancy Europe suggested that to improve the European Commission’s sustainable finance strategy corporate reporting should accommodate long-term horizons, disclosure requirements should address investors’ needs, and accounting frameworks need to be in line with long-term investments.
The position paper stated that the accountancy profession can help define the models, approaches and boundaries for transparency, as well as ensure reliability of the reporting information through independent assurance. Corporate reporting should also evolve to address a wider audience beyond investors, such as employees, consumers and non-governmental organisations. Further, the EU should consider the Task Force on Climate Related Financial Disclosures (TCFD) recommendations, and non-financial and financial standard setters should work together.
Additionally, Accountancy Europe supports setting up an EU Corporate Reporting Lab platform to discuss corporate reporting practices, similar to the UK Financial Reporting Lab from the Financial Reporting Council (FRC). Also supported is the global initiative from the International Integrated Reporting Council (IIRC), which focuses on how organisations resources create value.
Regarding the final recommendations delivered in January 2018 from the High Level Expert Group (HLEG) on sustainable finance to the European Commissioner, welcomed by Accountancy Europe, there is a need to better assess the lack of attractiveness and whether it is the result of investor behaviour or regulatory barriers. The document added that the HLEG final recommendations are the first step towards a roadmap for sustainable finance, which should be further discussed with organisations with similar interest.
These views were also expressed by Accountancy Europe deputy CEO Hilde Blomme in a recent interview with The Accountant.
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