Sustainability reporting is very important to create investors’ confidence in the capital market, experts said.
They said, “In the country, most of the companies do not maintain sustainable reporting as this helps companies better understand and communicate their impacts on critical issues like climate change, human rights and labor relations.”
Companies can become more aware of the risks, and take steps to manage them, market analysts said, adding that, transparency can also help them gain access to new opportunities in global market.
Dhaka Stock Exchange (DSE) director Minhaj Mannan Emon said the stock market is suffering from financial sector confusion as well as lack of transparency in financial reporting.
He said, “Today, the stock market’s situation is not good. Hence, supporting forces are very much needed. Apart from the confusion of the financial sector, we are suffering from lack of transparency of financial reporting.”
“The stock market needs a good quality IPO to build investors’ confidence. A good financial report can provide good IPO,” he said.
“If the authority can ensure good financial statement for the companies, investors can gather knowledge about the companies before investing to avoid losses, he added.
Indian former Secretary of ministry of corporate affairs Ram Bandyopadhyay said, “Corporate reporting should highlight the profitability of the company in financial reporting, as well as what the problems are.”
He said, “The Company should maintain corporate governance, corporate social responsibility as well as ethics.”
“All organisations make positive and negative contributions towards sustainable development through their activities and relationships. So, organizations have a key role to play in achieving a more sustainable economy, environment and society,” he added.
However, sustainable reporting in now a mainstream business practice. 93 percent of the world’s largest 250 corporations reported on their sustainability performance by 2017.
Organizations can combine their use of such instruments to improve the quality and comparability of the information they report publicly.
This information enables better decision making by organizations and their stakeholders, helping to build the long-term trust that is essential for the functioning of markets.
Sustainability reporting provides a broader view of a company’s performance than financial disclosure alone.
When used alongside financial reporting, it can reveal value creation across six capitals, financial, manufactured, intellectual, human, natural, and social and relationship.
Only by capturing the full picture of its value creation can a company thrive, and sustainability reporting is a vital tool in this process.
Sustainability reporting can be used to break down silos and build a holistic view of performance.
While various reporting frameworks and approaches for disclosing sustainability information are available, for this guidance we refer to the GRI Standards.
Reporting on both financial and non-financial information can give companies a broader perspective on risk, and the GRI standards are a good tool for companies to measure, manage and address the risks.
The GRI standards include references to other widely recognized frameworks, and are designed as a consolidated framework for reporting performance against different codes and norms for sustainability.