Sustainability Reporting and Practitioners' Responsibilities

Summary of the IESBA Staff Q&A

Richard C. Jones, PhD, CPA (np)

Over the past decade or so, corporate reporting has broadened to cover issues not addressed in quarterly or annual GAAP financial reports. At present, such reporting, often called Corporate Sustainability Reports (CSR) or Environmental, Social, & Governance Reports (ESG), is periodic and voluntary. Periodic, because companies can release such information annually, biannually, or whenever management deems it appropriate. Voluntary, because in the United States, except with respect to several specific issues, neither FASB nor the SEC requires extensive ESG disclosures. Of course, many required disclosures (e.g., business risks, executive compensation) are consistent with ESG disclosures. But because such disclosures are not offered as a single, concise, and organized report, many stakeholders argue that such disclosures are less useful than they might prefer.