ACCA urges firms not to delay sustainability reporting over data gaps

Data-related challenges remain among the most significant obstacles preventing organisations from producing reliable sustainability information. In response, the Association of Chartered Certified Accountants (ACCA) released a new report "Sustainability reporting: working with estimates" on February 25, which provides practical guidance on how sustainability information can be created when data is incomplete, uncertain, or unavailable.

The report notes that many organisations are currently working with imperfect data as they attempt to develop sustainability disclosures. When hard figures are not available, organisations may rely on reasonable and supportable information to make assumptions about present or future situations, enabling them to guide decisions and continue the reporting process.

Aaron Saw, head of Corporate Reporting Insights - Financial at ACCA, said sustainability reporting requirements were still evolving and globally accepted measurement methodologies for sustainability information have yet to be established.

“As sustainability reporting requirements are still evolving, and globally accepted measurement methodologies for sustainability information have not been established, this guide provides valuable support to organisations everywhere as they begin the reporting process,” he said.

The report also explores current approaches used to estimate sustainability information for present situations. These include the use of third-party data or proxy data, as well as deriving sustainability data from financial data and other related sources.

At the same time, organisations are taking steps to improve the quality of sustainability data by ensuring staff understand why they are collecting data, designing systems and processes to collect sustainability data, integrating systems and processes as much as possible, implementing processes and controls, and collaborating with the value chain.

While organisations should continue pursuing reliable sustainability data through direct measurement, ACCA notes that estimates are sometimes necessary given uncertainty and the evolving understanding of what needs to be measured. In the absence of high-quality data, the iterative improvement of estimates can provide a practical way to create decision-useful sustainability information.

“Reasonable estimates do not undermine the usefulness of sustainability information if they are accurately described and clearly explained. Over time, these estimates should be revised to produce more decision-useful information as knowledge of sustainability topics improves, assumptions are refined, systems and processes are strengthened, and better-quality data becomes available,” the report said.

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