Never mind the quality, feel the width?

January 2006

Never mind the quality, feel the width?

“It is not enough for organisations to report sustainability practices; the reporting needs to be of value to stakeholders,” says David Pickens of the New Zealand Institute of Chartered Accountants. Mr Pickens was commenting on a BT research report that suggests New Zealand’s top 50 companies are lagging behind their international counterparts in sustainability reporting.

“Sustainability reporting is a private decision for companies and their shareholders, and more relevant for some than others,” Mr Pickens notes. He agrees with report author Erik Mather that reporting on good sustainability performance may attract investors as well as benefiting other stakeholders, such as customers and employees.

To achieve this goal, the reporting must be of a high standard; that is, it needs to be understandable, reliable, consistent, comparable, relevant and of value to users. The Institute seeks to promote such high standards by including in its annual report awards a category for evaluating how an entity discloses and incorporates the wider range of non-financial information – economic, social and environmental (ecological) – with its financial statements.

The Chief Judge for 2005 said: “For years we reported for reporting sake, producing stodgy reports that, while meeting their statutory requirements, said absolutely nothing about the organisation. The system of reporting we have now certainly allows us to create a more balanced and open view of an organisation. And so it should – Annual Reports are, in my opinion, the most important documents an organisation can produce.”

ENDS

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