What will happen next in non-financial reporting…?

Well, first it's going to end up as an executive 'must do': Emissions cap and trade schemes will multiply... which is ...

December 18, 2007

Well, first it’s going to end up as an executive ‘must do': Emissions cap and trade schemes will multiply… which is going to crank up the financial relevance and at least some non-financial reporting elements will become mandatory, so it must become a board agenda issue, albeit heavily influenced by the CFO.Secondly it’s going to become even more complex: Climate change will precipitate a reexamination of risk management, and the requirement for cross-cutting responsesA burgeoning Sustainability Performance Management industry will fuse IT, management systems and reporting agenda.Thirdly, the IT boys are going to be the key beneficiaries: The SPM industry will be enabled by a Green IT revolution, and specifically by CSR and GRC (governance/risk/compliance) software. This infrastructure revolution, in turn will be enabled by financial management, ERP and BI vendors creating solutions which enable sustainability management AND sustainability reporting.These are not my views, but those of the Caiteur Consulting: CP.pdfTheir paper is really worth a read.  While most of the innovation and regulatory outcomes they predict will most likely come more slowly than they imagine, the sensitisation of organisations is likely to be even faster.I only have one caveat.  As financial markets collapse around us, and an ‘emotional’ recession hits home, we are likely see another cycle of lost faith in the crazy speculations of financiers, and the rearward gazing of accountancy.  A more proactive form of assurance, which focuses on control, and transparency, is once again required…In this uncertain situation, process-based assurance, rather than data-based auditing, is a more constructive approach.  We will see at least some rebalancing towards this wider assurance agenda – and a much broader definition of ‘materiality’.