- 6 Marks
CR – Nov 2017 – L3 – Q5a – Beyond financial reporting
Identify limitations of financial reporting in social and environmental impact reporting and discuss current practices.
Question
In recent years, the discourse has shifted from Corporate Social Responsibility to Sustainability Reporting. Indeed, some critics would argue that there is very little difference between the two. However, sustainability in this context is a complex and contested concept as it is about ensuring that there are sufficient resources available for future generations. It is very difficult for this to be addressed at an individual firm level. There are huge external pressures for companies to disclose information in relation to their impacts on carbon emissions, waste management, protection of biodiversity, and health and safety. Expectations of key users (stakeholders) are changing.
Required:
i) Identify FOUR limitations of financial reporting in the context of reporting the social and environmental impacts of corporate activity to users of financial statements.
ii) What are companies currently doing to report their social and environmental performance?
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