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AIA's Commitment to Sustainability
AIA’s Sustainability Promise is to be committed to ensuring our members have the skills, knowledge and tools to promote sustainable business practices.
AIA plays two distinct roles in promoting green finance and sustainability.
As a professional body we are committed through our policy agenda to act as an authoritative voice within the accountancy sector to raise standards and education in green finance and sustainability.
We also ensure that our members have the skills, knowledge and tools to promote sustainable business practices.
Sustainability has become increasingly critical for organisations globally to remain both relevant and competitive in an ever-changing world. Embedding sustainability practices in AIA’s strategy has been essential to meet evolving consumer demand and regulatory requirements.
AIA is actively working with industry regulators to demonstrate how our operations are sustainable, whilst promoting sustainability through education and learning to our global membership.
As a professional accountancy organisation, AIA has placed sustainability at the heart of its operations and works with its members to deliver sustainable long-term growth.
Sustainable Finance Education Charter
The government, the Green Finance Institute, and a number leading financial professional bodies, including AIA, are signatories of the Sustainable Finance Education Charter (SFEC), designed to embed green finance and sustainability into the core curricula, new qualifications, and the continued professional development of accountants.
Net Zero Now provides an end to end climate solution, giving accountancy firms all the tools they need to measure and reduce carbon emissions.
Net Zero is a pragmatic response to the climate challenge which many large professional service businesses are already working towards, proving that environmentally-conscious companies can operate profitably.
"We're excited to see more and more accountancy practices starting to calculate their emissions and get on the road to Net Zero - creating a brighter future for their businesses and for the planet.” Neil Ross Russell, Net Zero Now Managing Director
IFRS Sustainability Standards are developed to enhance investor-company dialogue so that investors receive decision-useful, globally comparable sustainability-related disclosures that meet their information needs. The ISSB is supported by technical staff and a range of advisory bodies.
IFRS S1 is effective for annual reporting periods beginning on or after 1 January 2024 with earlier application permitted as long as IFRS S2 Climate-related Disclosures is also applied.
The objective of IFRS S1 is to require an entity to disclose information about its sustainability-related risks and opportunities that is useful to users of general purpose financial reports in making decisions relating to providing resources to the entity.
IFRS S1 requires an entity to disclose information about all sustainability-related risks and opportunities that could reasonably be expected to affect the entity’s cash flows, its access to finance or cost of capital over the short, medium or long term (collectively referred to as ‘sustainability-related risks and opportunities that could reasonably be expected to affect the entity’s prospects’).
IFRS S1 prescribes how an entity prepares and reports its sustainability-related financial disclosures. It sets out general requirements for the content and presentation of those disclosures so that the information disclosed is useful to users in making decisions relating to providing resources to the entity.
IFRS S1 sets out the requirements for disclosing information about an entity’s sustainability-related risks and opportunities. In particular, an entity is required to provide disclosures about:
the governance processes, controls and procedures the entity uses to monitor, manage and oversee sustainability-related risks and opportunities;
the entity’s strategy for managing sustainability-related risks and opportunities;
the processes the entity uses to identify, assess, prioritise and monitor sustainability-related risks and opportunities; and
the entity’s performance in relation to sustainability-related risks and opportunities, including progress towards any targets the entity has set or is required to meet by law or regulation.
IFRS S2 is effective for annual reporting periods beginning on or after 1 January 2024 with earlier application permitted as long as IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information is also applied.
The objective of IFRS S2 is to require an entity to disclose information about its climate-related risks and opportunities that is useful to users of general purpose financial reports in making decisions relating to providing resources to the entity.
IFRS S2 requires an entity to disclose information about climate-related risks and opportunities that could reasonably be expected to affect the entity’s cash flows, its access to finance or cost of capital over the short, medium or long term (collectively referred to as ‘climate-related risks and opportunities that could reasonably be expected to affect the entity’s prospects’).
IFRS S2 applies to:
climate-related risks to which the entity is exposed, which are:
climate-related physical risks; and
climate-related transition risks; and
climate-related opportunities available to the entity.
IFRS S2 sets out the requirements for disclosing information about an entity’s climate-related risks and opportunities. In particular, IFRS S2 requires an entity to disclose information that enables users of general purpose financial reports to understand:
the governance processes, controls and procedures the entity uses to monitor, manage and oversee climate-related risks and opportunities;
the entity’s strategy for managing climate-related risks and opportunities;
the processes the entity uses to identify, assess, prioritise and monitor climate-related risks and opportunities, including whether and how those processes are integrated into and inform the entity’s overall risk management process; and
the entity’s performance in relation to its climate-related risks and opportunities, including progress towards any climate-related targets it has set, and any targets it is required to meet by law or regulation.
IESBA Ethical Benchmark for Sustainability Reporting and Assurance
The Exposure Draft on International Ethics Standards for Sustainability Assurance (including International Independence Standards) (IESSA) and ethics standards for sustainability reporting proposes a clear framework of expected behaviors and ethics provisions for use by all sustainability assurance practitioners regardless of their professional backgrounds, as well as professional accountants involved in sustainability reporting. The goal of these standards is to mitigate greenwashing and elevate the quality of sustainability information, thereby fostering greater public and institutional trust in sustainability reporting and assurance.
European Union European Sustainability Reporting Standards
The European Commission has adopted the European Sustainability Reporting Standards (ESRS) for use by all companies subject to the Corporate Sustainability Reporting Directive (CSRD). This marks another step forward in the transition to a sustainable EU economy.
The standards cover the full range of environmental, social, and governance issues, including climate change, biodiversity and human rights. They provide information for investors to understand the sustainability impact of the companies in which they invest. They also take account of discussions with theInternational Sustainability Standards Board (ISSB)and theGlobal Reporting Initiative (GRI)in order to ensure a very high degree of interoperability between EU and global standards and to prevent unnecessary double reporting by companies.
The reporting requirements will be phased in over time for different companies.
The Global Reporting Initiative is an independent, international organisation that helps businesses take responsibility for the impact of their work. GRI Standards help advance the practice of sustainability reporting, and enable businesses and their stakeholders to take action and make better decisions that have economic, environmental and social benefits.
Task Force on Climate-related Financial Disclosures
The Task Force on Climate-related Financial Disclosures (TCFD) was created to improve and increase reporting of climate-related financial information, including the risks and opportunities presented by rising temperatures, climate-related policy, and emerging technologies in today's world.
In collaboration with the world’s leading accountancy and finance bodies, AIA signed an open letter urging the UK Government to take transformative action to achieve the global Sustainable Development Goals by 2030.
At its heart are the 17 Sustainable Development Goals (SDGs), which are an urgent call for action by all countries - developed and developing - in a global partnership. They recognise that ending poverty and other deprivations must go hand-in-hand with strategies that improve health and education, reduce inequality, and spur economic growth – all while tackling climate change and working to preserve our oceans and forests.
Every year, the UN Secretary General presents an annual SDG Progress report, which is developed in cooperation with the UN System, and based on the global indicator framework and data produced by national statistical systems and information collected at the regional level.
As a Commonwealth accredited organisation, AIA adheres to the values and principles embedded in Commonwealth Declarations, notably the Singapore Declaration on Commonwealth Principles (1971) and the Harare Commonwealth Declaration (1991), which outlines a commitment to promoting democracy and good governance, human rights and the rule of law, gender equality and sustainable economic and social development.
The Commonwealth helps member countries protect their environments and use their natural resources sustainably and operates a number of environmental programmes.
COP (Annual United Nations Climate Change Conference)
COP is the main decision-making body of the United Nations Framework Convention on Climate Change (UNFCCC). It includes representatives of all the countries that are signatories (or ‘Parties’) to the UNFCCC. COP assesses the effects of measures introduced by the Parties to limit climate change against the overall goal of the UNFCCC.
As well as progress towards the existing Paris goals, COP28 concentrated on:
Fast-tracking the move toclean energy sources, to "slash" greenhouse gas emissions before 2030
Delivering money for climate action from richer to poorer countries, and working on anew deal for developing nations
Focusing onnature and people
Making COP28 the"most inclusive"ever
AIA has signed a climate declaration alongsideIFACin support of new ISSB climate standards, to help drive an enhanced global corporate reporting system.
COP26 aimed to mobilise finance as a mechanism to achieve its climate goals; countries need to manage the increasing impacts of climate change on their citizens’ lives and they need the funding to do it. The scale and speed of the changes require all forms of finance including:
Public financefor the development of infrastructure we need to transition to a greener and more climate-resilient economy.
Private financeto fund technology and innovation, and to help turn the billions of public money into trillions of total climate investment.
AIA ensures that our members have the skills, knowledge and tools to promote sustainable business practices.
IFAC Sustainability Information for SMEs and SMPs
This publication outlines some of the benefits for SMEs using and even reporting on sustainability information, highlighting the range of services practitioners can provide, including advisory, reporting, Agreed-Upon Procedures (AUP) engagements and assurance. It also explains how SMPs can build skills, knowledge and take initial steps.
Guidance from the European Federation of Accountants and Auditors for SMEs (EFAA)
As an EFAA member AIA works with other professional bodies across Europe to provide guidance and support to SMPS and SMEs.
Published guidance offers suggestions on how SMPs can best respond to the rapid emergence of sustainability reporting. It explains how the landscape is fast evolving and how significant new reporting requirements, and the limited time to get ready for them, demand that SMPs and SMEs prepare now for their implementation. It also includes useful tips on how SMPs can get ready to prepare sustainability reports for their SME clients.
SMPs can support the creation of a sustainable EU economy in the following ways:
Advise on Sustainable Business Practices– SMPs can encourage and advise their clients on how they can adopt sustainable business practices and improve their sustainability performance. This advice may include how to reduce carbon footprint and how to comply with health, safety, and environmental regulation. If they are to provide such advice to clients, then SMPs themselves need to ‘practice what they preach’ by adopting such practices themselves.
Adopt Sustainable Business Practices– SMPs themselves have a responsibility to change their way of working so that they become more sustainable. Hence, they need to embrace sustainable business practices. Such practices include reducing their carbon footprint and providing a safe and inclusive place to work. Digital technologies can help, for example, remote working can reduce carbon emissions.
Prepare Sustainability Reports– SMPs have traditionally prepared the financial information and reports, both for management and external reporting purposes, for clients that lack the in-house expertise or capacity to do so themselves. Going forward, SMPs can expect increasing numbers of clients to ask them to also prepare sustainability information and reports.
Provide Assurance on Sustainability Information– SMPs sometimes provide audit and other forms of assurance on financial information and reports of clients. Going forward, SMPs can expect an increasing number of clients to seek assurance on their sustainability information and reports.
Green is the New Finance is a podcast series from the Green Finance Institute which showcases thought leadership on green finance and sustainability with interviews from key figures in the finance sector or policy environment discussing their ideas on how to advance green and sustainable finance.
AIA has brought together a team of experts to provide a series of workshops to ensure members are ready to operate in a low carbon/net-zero world.
The series looks at issues faced not only by companies but by individuals. These issues range from climate change to social inequalities and are constantly being raised, yet so many people are not taking them seriously. Why?
Climate change is probably the biggest threat to human kind and has brought World Leaders together in a display of co-operation to make the necessary changes. But how are they doing this?
The accountancy profession has a huge part to play as companies look towards calculating carbon footprints and how to plan for net-zero. Sustainability accounting standards are being considered globally to bring the profession into line with each other.
Understanding Economic, Social and Governance risks, opportunities and reporting are essential for a business to thrive in today’s world!
International Accountant magazine covers a range of topics relating to green finance and sustainability, including news, insights and thought-leadership.
Sustainable Economy: Winners in the New Economy
In the first of a four part series, 'Transforming accountancy to create a sustainable future', AIA council member Dr Peter Ellington urges accountancy firms to take advantage of the new sustainable economy.
The Financial Reporting Council (FRC) has published its Annual Review of Corporate Reporting, which outlines the FRC’s ‘top ten’ areas where improvements to reporting are required. From next year, premium listed companies will be required to disclose their compliance with the Taskforce for Climate-related Financial Disclosures (TCFD) recommendations on a comply-or-explain basis.