Acca aaa s21 Notes

SOCIAL, ENVIRONMENTAL AND 
INTEGRATED REPORTING
1. Introduction
Environmental and social issues are a source of risk (and opportunity) to companies:
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Bad publicity - for example, disparities between the salaries of male and female employees
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Good publicity - for example, a reduction in carbon footprint.
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Fines - for example, on operating outside permitted hours causing noise that harms those living 
nearby.
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Compensation - for example, on the release of pollution that affects fish stocks.
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Losing customer contracts - for example if a company is implicated in exploiting children.
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More supervision by the authorities - if an industry has repeatedly not improved it standards.
Social media allow much greater involvement of many stakeholders - and can also quickly permit 
harm to be caused to an organisation through Twitter and review sites. Initiatives such as integrated 
reporting and the triple bottom line (profits, people, planet) have meant that more and more 
companies include social and environmental measures in their annual reports and on their web-sites.
2. Assurance reports
Assurance reports on performance measures give greater credibility to those measures. If no 
independent assessment were performed why would stakeholders believe what is published? Of 
course, what company decides to publish relating to these matters is very much the company’s choice 
(unlike in their financial statements) and the auditor has no power to insist on a particular set of 
disclosures. However, once the company decides on its disclosures, the auditor can be asked to 
provide assurance.
In general, the work that the auditor has to carry out for an assurance report is:
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Agree the metrics (eg performance measures and sustainability indicators).
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Check the client’s measurements, calculations and published figures.
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Report compliance.
You should remember from your SBR (P2) studies that an integrated report goes beyond a 
sustainability report. Performance is just one of the eight content elements of an integrated report.
See Chapter 30 of our SBR notes