With the increasing attention of investors, regulatory authorities, and the general public to sustainable development, enterprises are communicating their sustainable development strategies, performance and progress through diverse channels of sustainability information reporting. As the disclosure criteria for sustainability reporting and the legal framework of various countries are continuously evolving, the new form of sustainability information disclosure demands a shift from historical reporting to future and forward-looking reporting of items such as sustainable goals, transformation plans, scenario analysis, and disclosure of sustainability risks and opportunities. At the same time, significant challenges and changes have also formed in the resources which enterprises invest in sustainability reporting. The new version of the International Valuation Standards (IVS) expected to take effect in 2025 has incorporated environmental, social, and governance (ESG) factors into corporate evaluation, highlighting the importance of sustainability information. Therefore, how to provide timely, reliable, and consistent sustainability information across regions, companies, and periods depends on the enterprise’s establishment of the relevant internal control system to ensure the quality and efficiency of sustainability information preparation. Taiwan’s Financial Supervisory Commission has also completed regulatory amendments, requiring TWSE and TPEx listed companies as well as financial, insurance, securities and futures service providers to incorporate sustainability information management into their internal control systems, and list it as a mandatory audit item from 2025 onward. Regarding the response to such requirements, the author suggests that enterprises start from the three major aspects of personnel, workflow and control, and information technology.
Personnel: Clarifying the Role of the Board of Directors’ Governance and Supervision Function and the Responsibilities of the Responsible Personnel
The primary key to implementing sustainability information management is to clarify the role of the board of directors’ governance and supervision and the responsibilities of the personnel responsible. The board of directors plays a crucial role in the strategies, risks, opportunities, and resource allocation in sustainable corporate development. The major international sustainability reporting frameworks and standards require companies to clearly disclose how they govern sustainable development strategies, opportunities and risk management, as well as the role of the governance unit in them. Through the supervision and resource allocation by the board of directors, appropriate internal personnel at various levels can be assigned to expand the responsibility of sustainability information from the past perspective of centralization in the sustainability office and the sustainability report preparation team to the overall operational process from the source, including sustainability data collection, consolidation, preparation, quality review, and disclosure.
Workflow and Control: Establishing Sustainability Information Reporting and Preparing Operating Procedures
The information in the sustainability report covers a wide range. Starting from the results of risk assessment and identification of material sustainability topics, the author suggests establishing standard operating procedures (SOPs) and corresponding preventive and/or detection control points for areas of concern to stakeholders, such as greenhouse gas emissions, supply chain management, and information security. This will ensure reliable data quality. This can effectively improve the accuracy and consistency of sustainability information, and ensure its compliance with relevant disclosure requirements.
Making Good Use of Information Technology to Optimize Sustainability Information Reporting
Currently, enterprises often rely too much on manual operations in the preparation of sustainability information, and how to provide timely, reliable, and consistent high-quality sustainability information and leave relevant audit trails in the face of the increasing intensity of supervision requirements is an important strategy for enterprises to meet future challenges. The author suggests that enterprises may refer to their current financial reporting models, make good use of information technology, and integrate the information and preparation operations required for sustainable performance indicators into the current information system. If the company has planned an IT transformation project, the need for automation of sustainability information reporting should also be taken into consideration. In response to the challenge of gradually aligning the annual report filing schedule with the IFRS sustainability disclosure standard for TWSE and TPEx listed companies in the future, as well as the increasing emphasis on the quality of sustainability information from the outside world, enterprises may evaluate and optimize their sustainability reporting operations by utilizing information technology in a timely manner.
Conclusion
In order to cope with increasingly stringent requirements for sustainability reporting, enterprises should actively establish and improve their internal control systems for sustainability information management, and enhance the quality and efficiency of sustainability information through a clear governance structure, effective operating procedures, and the application of information technology, in order to ensure the accuracy and consistency of the information reporting, and establish trust and recognition from investors and the general public for sustainable corporate development.