Using The Connected Reporting Framework
Accounting For Sustainability and Financial Performance
Oct 22, 2009
Accounting for Sustainability, an initiative of His Royal Highness Prince Charles through The Prince’s Charities, aims to incorporate the reporting of sustainability outcomes by companies into financial disclosure documents such as annual reports. The Connected Reporting Framework is a mechanism by which sustainability performance can be communicated to stakeholders of organisations.
His Royal Highness Prince Charles has long been an advocate of environmental issues and the Accounting for Sustainability project was initiated as a means of making organisations aware of the role they play in environmental issues. The project is supported by the Sustainability at Work website which provides assistance, guidance and resources to assist organisations develop sustainable practices in business operations.
Connected Reporting Framework – Disclosing Costs of Sustainability
Implementing sustainability initiatives has a direct financial impact on organisations; the Connected Reporting Framework allows businesses to disclose the direct impacts in both financial terms and non-financial indicators. For example, an organisation’s water usage may result in charges from water providers as well as sustainability outcomes in the amount of water used. The Connected Reporting Framework also discloses indirect impacts including targets, key performance indicators and industry benchmarks.
Companies using the Connected Reporting Framework are required to explain where and how sustainability is connected to operational strategies, as well as information on the upstream and downstream impacts of business operations, products and services.
Accounting For Sustainability – Decision Making Model
The decision making model recommended for organisations adopting the Connected Reporting Framework is a three phase approach where organisations map sustainability concerns and consider all options prior to making balanced and reasonable decisions. Phase 1 of the decision making model reviews the potential impacts and expectations of all the organisation’s products and services, phase 2 looks at the life cycle of each product/service individually and phase 3 is the determination of the ways that sustainability performance can be improved in the organisation. Data gathering and analysis comprises a large part of the decision making model, in order that fully informed decisions can be made.
Five Key Environmental Impact Indicators To Be Reported
Environmental impacts of business operations vary however during the research to create the Connected Reporting Framework, the project team found that there were similarities across all business. From the research, five key environmental impact indicators were identified and are required to be reported:
- pollution emissions including carbon emissions;
- waste;
- water usage;
- energy usage; and
- details of the amount and type of any other finite natural resources used or impacted upon by business operations.
Organisations are also recommended to report any other key sustainability impacts relevant to that particular industry or geographic region.
Aligning Connected Reporting Framework With Other CSR Reporting Frameworks
The Connected Reporting Framework has been designed to work in conjunction with other corporate social responsibility reporting frameworks including the GRI G3 Guidelines, United Nations Global Compact and AccountAbility. Organisations can continue to report performance on corporate social responsibility initiatives which are not related to environmental sustainability via the above frameworks and report environmental sustainability outcomes in a Connected Reporting Framework report.
Accounting for Sustainability and the Connected Reporting Framework bring the issues of environmental sustainability into the financial accounts of organisations, large and small, public or private. A three phase decision making model exists to enable organisations to review and determine where sustainability improvements can be made in business operations. An initiative of His Royal Highness Prince Charles, Accounting for Sustainability and the Connected Reporting Framework has been adopted by organisations in both the public and private sectors.
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