Stathis Gould, IFAC, calls on the accountancy profession to step up and do its part to address the sustainability crisis.

The Professional Accountants in Business (PAIB) Committee of the International Federation of Accountants (IFAC) has significantly updated its Sustainability Framework (the Framework), a tool to support professional accountants and their organizations as they integrate sustainability into their strategy, operations, and reporting. The Framework highlights the important roles that professional accountants play in facilitating the sustainable development of their organizations, as well as the importance of adopting an integrated approach to business reporting.

Embracing sustainability and corporate responsibility from three perspectives—strategy, operations, and reporting—is critical to gaining the trust of stakeholders and the wider public, and ultimately ensuring sustainable value creation. Through key considerations, as well as examples from major international corporations, smaller firms, professional accountancy organizations, and leaders from around the world, the Framework provides a comprehensive view of some of the current best practices globally in each of these areas, and is applicable to entities of all sizes and levels of complexity.

“Professional accountants are already doing much to help organizations minimize waste, create efficiencies, and cut costs, which is undoubtedly the biggest driver for embracing sustainability,” said Roger Tabor, chair of the PAIB Committee. “However, accountants also need to be prepared to take on new and expanded roles, activities, and skills as they support their organizations in charting a more sustainable path. The Framework can help them on this journey.”

“To successfully embed sustainability within an organization, business leaders and professional accountants must recognize the importance of incorporating environmental, social, and governance factors into all functions and processes—from strategic planning and goal setting, to external communications and reporting. And, each of these areas is interconnected: to produce high-quality sustainability and integrated reports, these factors must be embedded into an organization’s culture and decision making,” said Ian Ball, CEO of IFAC.

Presented in a digital magazine format, and available in PDF, the Framework contains numerous internal links to allow professional accountants to easily navigate to the sections of most relevance to their particular roles. All sections include key considerations for professional accountants, including examples and references to other sources of information and guidance. The Sustainability Framework is available on the IFAC website.

About the PAIB Committee
The PAIB Committee serves IFAC member bodies and the more than one million professional accountants worldwide who work in commerce, industry, financial services, the public sector, education, and the not-for-profit sector. Its aim is to promote and contribute to the value of professional accountants in business by increasing awareness of the important roles professional accountants play, supporting member bodies in enhancing the competence of their members, and facilitating the communication and sharing of good practices and ideas.

About IFAC
IFAC is the global organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. IFAC is comprised of 164 members and associates in 125 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.

The updated Sustainability Framework consolidates the important aspects of embedding sustainability into the DNA of an organization and can be applied to entities of all sizes and complexities. This edition focuses on the integration of sustainability factors from three perspectives--business strategy, operational, and reporting--and highlights the important roles that professional accountants play in facilitating the sustainable development of their organizations.

The International Auditing and Assurance Standards Board (IAASB) today released for comment proposed new International Standard on Assurance Engagements (ISAE) 3410, Assurance Engagements on Greenhouse Gas Statements.

“The monetary value of carbon trading transactions around the world is in the billions and continuing to increase exponentially. This has led to a strong and growing need for mechanisms to enhance the reliability of the underlying information used in these transactions—and this proposed standard is an important part of fulfilling that need,” said Prof. Arnold Schilder, IAASB chairman. “Disclosure of emissions information is also increasingly being required by regulation or presented on a voluntary basis to inform investors, consumers, and others,” Schilder added. “For example, it is becoming more common to include detailed emissions information in company sustainability reports. Providing assurance to enhance the reliability of information for regulatory and voluntary reporting is also important.”

Proposed ISAE 3410 has been developed through a robust program of consultation, including a series of global roundtables and feedback received on an earlier Consultation Paper. The proposed standard addresses the practitioner’s responsibilities in identifying, assessing, and responding to risks of material misstatement, and contains illustrative assurance reports on greenhouse gas statements. The proposed requirements and guidance also recognize that most engagements will be undertaken by a multidisciplinary team, so they address the need for the assurance practitioner to integrate experts—in engineering or environmental science, for example—into various stages of the engagement.

“The proposed standard can be applied to a broad range of circumstances, including emissions from electricity used at a single office; emissions from complex physical or chemical processes at several facilities; or emissions calculated using information from multiple entities in a supply chain,” explained IAASB Technical Director James Gunn. He noted, “Importantly, the proposed standard covers both ‘reasonable assurance’ and ‘limited assurance’ engagements for both of which demand is increasingly evident in the marketplace.”

How to Comment
The IAASB invites all stakeholders to comment on its proposals. To access the exposure draft or submit a comment, visit the IAASB’s website at www.iaasb.org/ExposureDrafts.php. Comments on the exposure draft are requested by June 10, 2011.

About the IAASB
The IAASB (www.iaasb.org) develops auditing and assurance standards and guidance for use by all professional accountants under a shared standard-setting process involving the Public Interest Oversight Board, which oversees the activities of the IAASB, and the IAASB Consultative Advisory Group, which provides public interest input into the development of the standards and guidance. The structures and processes that support the operations of the IAASB are facilitated by IFAC.

About IFAC
IFAC (www.ifac.org) is the global organization for the accountancy profession, dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. It is comprised of 164 members and associates in 125 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.

Accountancy leaders from around the world met in Geneva on October 12 to discuss next steps for global corporate governance reforms. With an eye to helping prevent future financial crises, they collectively supported the following points:

• The accountancy profession has a key role to play in strengthening corporate governance and facilitating the integration of governance and sustainability into the strategy, operations, and reporting of an organization.
• Boards should be focused on the long-term sustainability of their businesses. As such, corporate governance reform must include strengthening board oversight of management, positioning risk management as a key board responsibility, and encouraging remuneration practices that balance risk and long-term (social, environmental, and economic) performance criteria.
• Governance is more than having the right structures, regulation and principles in place—it is about ensuring that the right behaviors and processes are in place.
• Governance mechanisms need to be strengthened at banks and other companies to ensure better oversight of risk management and executive compensation.
• More dialogue is needed between policy makers, the accounting profession, and other financial industries to consider how we can work together effectively on a global level.

The conference, hosted by the International Federation of Accountants (IFAC) and the United Nations Conference on Trade and Development (UNCTAD), took place at the United Nations Office in Geneva, Switzerland.

Professor Mervyn King, author of the King Code on Corporate Governance, was the keynote speaker. Participants from more than 50 countries were on hand to address key questions including: What lessons has the financial crisis revealed about corporate governance? What corporate governance reforms should be developed on a global basis? And what role should the accountancy profession play?

“Professional accountants can serve as a critical link to ensure that good corporate governance is practiced,” said IFAC President Robert L. Bunting. “Accountants provide strategic direction to boards and governing bodies, aiming to ensure that risks are managed appropriately and resources are used responsibly—all key processes for facilitating sound corporate governance.”

The IFAC/UNCTAD conference was designed to allow professional accountants, corporate governance experts, and other participants to challenge current practices, exchange views on essential elements of corporate governance, and discuss best practices that will improve the current and future business and economic climate.

Mervyn King, professor at the University of South Africa, who specializes in corporate citizenship, said: “Our businesses impact society, the economy, and the environment. We are no longer distant bystanders of these organizations, but we are the stakeholders, because business impacts our society, environment, and economy.”

About IFAC

IFAC is the global organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. It is comprised of 159 members and associates in 124 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.

About the United Nations Conference on Trade and Development (UNCTAD)

UNCTAD is the focal point of the United Nations for the integrated treatment of investment and enterprise development. Since its founding in 1964, UNCTAD has progressively evolved into an authoritative knowledge-based institution whose work aims to help shape current policy debates and thinking on development. UNCTAD is the host for the Intergovernmental Working Group of Experts on International Standards of Accounting and Reporting (ISAR). For more than 25 years, ISAR has been the focal point within the UN system for issues of corporate transparency and accounting. Through ISAR, UNCTAD works to promote international best practices in financial reporting and corporate governance disclosure and to assist developing countries to build their technical capacity in this area.

The Prince’s Accounting for Sustainability Project (A4S) and the Global Reporting Initiative (GRI) announced today the formation of the International Integrated Reporting Committee (IIRC). The IIRC brings together a cross section of representatives from the corporate, accounting, securities, regulatory, NGO, and standard-setting sectors. Ian Ball, CEO of IFAC, will serve as co-chairman of the Working Group.

The objective of the IIRC is to create a globally accepted framework for accounting for sustainability that brings together financial, environmental, social, and governance information in a clear, concise, consistent, and comparable format. The intention is to help with the development of more comprehensive and comprehensible information about an organization’s total performance, prospective as well as retrospective, to meet the needs of the emerging, more sustainable, global economic model.

Please see the attached press release issued and briefing notes. For further information regarding the IIRC, please see www.integratedreporting.org.

The International Federation of Accountants (IFAC) and The Prince's Accounting for Sustainability (A4S) Project have entered into a memorandum of understanding to support the global accountancy profession's role in developing sustainable organizations.

Organizations are increasingly seeking new ways to maintain their economic performance and contributions to society in the face of challenge and crisis. Perhaps the most critical challenge facing business and society generally is to live within our ecological limits, while continuing to enjoy economic prosperity. IFAC and A4S believe that an essential part of the answer lies in going beyond traditional ways of thinking about performance and embedding sustainability into strategy, governance, performance management, and reporting processes.

Key priorities to support the work of professional accountants in embedding sustainable practices include:

• Raising awareness and facilitating sharing and collaboration across the global accountancy community, for example, through the development of a community website for professional accountancy organizations, business leaders, academics, and other experts to exchange ideas and share good sustainability practice;
• Establishing an international integrated reporting committee to develop a new reporting model that will better reflect the interconnected impact of financial, environmental, social, and governance factors on the long-term performance and condition of an organization; and
• Incorporating accounting for sustainability within professional training and education.

Professional accountants in organizations support the sustainability efforts of the organizations they work for in leadership roles in strategy, governance, performance management, and reporting processes. They also oversee, measure, control, and communicate the long-term sustainable value creation of their organizations.

Paul Druckman, Chairman of the A4S Executive Board, states, "We will only be able to achieve a sustainable future if all organizations, and all individuals within those organizations, recognize the role that they can and need to play. Effective action by the accounting and finance community to better account for sustainability is an essential part of the response. The collaboration between IFAC and A4S will help to make this a reality."

"Professional accountants play a vital role in helping to create sustainable organizations and markets, especially in the areas of accountability and measurement of results," says Robert Bunting, President of IFAC. "I am delighted that our two organizations are working together to advance the role of sustainability leadership and reporting at a global level, fostering collaboration with key stakeholders and developing best practices for integrating sustainability issues in the way we do business."

About IFAC
IFAC (www.ifac.org) is the global organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. IFAC is comprised of 159 members and associates in 124 countries and jurisdictions, representing more than 2.5 million accountants in public practice, education, government service, industry, and commerce.

About the A4S Project
The Prince's Accounting for Sustainability Project works with businesses, investors, the public sector, accounting bodies, NGOs and academics to develop practical guidance and tools for embedding sustainability into decision-making and reporting processes. To date, the project has involved the collaboration of more than one hundred and fifty public and private sector organizations.

As the world turns its attention to the Copenhagen talks later this year for a successor to the Kyoto Protocol on reining in carbon emissions and other greenhouse gases (GHG), the International Auditing and Assurance Standards Board (IAASB) is making significant progress to develop a new assurance standard on GHG statements. Today, the IAASB released a Consultation Paper seeking views on key issues in developing that standard.

"Having reliable information is key to global efforts to reduce emissions and stabilize the level of carbon in the atmosphere," emphasizes Arnold Schilder, IAASB Chairman. "We are actively seeking to enhance the credibility of GHG information because of the importance to the public interest of decisions being made on the basis of that information. Our consultation will help inform the development of a robust standard in support of this goal."

"A growing number of countries are developing, or have developed, carbon emissions trading schemes under which public reporting of information about emissions inventories, and assurance thereon, has economic, political, and social significance," explains James Gunn, IAASB Technical Director, adding, "The IAASB's project seeks to enhance the consistency and quality of performance by practitioners on assurance engagements to report on this information, whether produced for regulators, legislators, investors, or other interested parties."

Entitled Assurance on a Greenhouse Gas Statement, the Consultation Paper asks a series of questions addressing such matters as: the form of assurance report that users would find most useful; the nature and extent of requirements; how a standard should best integrate with regulatory requirements; and technical aspects of applying the assurance process to GHG emissions. The IAASB intends to use the feedback from the consultation to develop an exposure draft of a proposed new assurance standard on GHG statements for release in 2010.

All stakeholders are encouraged to respond to the Consultation Paper, either in its entirety or to select questions that are of special interest to them.

How to Comment
Comments on the Consultation Paper are requested by February 19, 2010. The Consultation Paper may be viewed by going to www.ifac.org/Guidance/EXD-Outstanding.php. Respondents are asked to send their comments electronically through the IFAC website, using the "Submit a Comment" link on the Exposure Drafts and Consultation Papers page. Please note that first-time users must register to use this new feature. Although IFAC prefers that comments be submitted using the online submission system, e-mail may continue to be sent to edcomments@ifac.org. They can also be faxed to the attention of the IAASB Technical Director at +1 (212) 856-9420 or mailed to IFAC, 545 Fifth Avenue, 14th Floor, New York, NY 10017, USA. All comments will be considered a matter of public record and will ultimately be posted on IFAC's website.

About the IAASB and IFAC
The IAASB (www.ifac.org/IAASB) develops auditing and assurance standards and guidance for use by all professional accountants under a shared standard-setting process involving the Public Interest Oversight Board, which oversees the activities of the IAASB and the IAASB Consultative Advisory Group, which provides public interest input into the development of the standards and guidance.

IFAC (www.ifac.org) is the global organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. IFAC is comprised of 157 members and associates in 123 countries and jurisdictions, representing more than 2.5 million accountants in public practice, education, government service, industry, and commerce.

In a letter issued today, the International Federation of Accountants (IFAC) has called for broad action by the G20 leaders at their September meeting in Pittsburgh, PA to encourage adoption and implementation of global accounting, auditing, and auditor independence standards to improve the ability of capital markets to work globally. In addition, IFAC has called for the worldwide adoption and implementation of International Public Sector Accounting Standards as a means to greatly improve government transparency and accountability in light of the "unprecedented takeovers, lending, guarantees, and bailouts of major market institutions, banks, and companies." It is also urging that further steps be taken to enhance the governance of the International Accounting Standards Board in order to ensure its legitimacy and its ability to act independently, and without inappropriate political interference, in its standard-setting role.

"The G20 leaders must act quickly to build a reformed international financial system," said Ian Ball, IFAC Chief Executive Officer. "While some nations appear to be moving toward recovery from the financial crisis, underlying problems of accountability and transparency remain. We believe that the adoption of international standards can help to address these issues and play an essential role in resolving the current crisis."

"The G20 should acknowledge that small- and medium-sized enterprises are the engine of the global economy and address their unique needs," emphasizes Robert Bunting, IFAC President. "IFAC's letter emphasizes this and points out that those establishing regulations must take into account any related costs and complexities that will impose burdens on, and threaten the sustainability of, the small business sector."

IFAC's letter to the G20 also includes recommendations on enhancing corporate governance, supporting the long-term strengthening of the accountancy profession in developing countries, and developing new tools and metrics to achieve global sustainability. The submission also asks the G20 to facilitate debate to resolve issues between financial reporting-designed to communicate business performance to investors-and prudential reporting-used to monitor and maintain financial stability. The letter with the full list of recommendations is posted on the IFAC website (http://www.ifac.org/financial-crisis/).

The recommendations reflect the views of the 60 leaders of accountancy organizations who attended the IFAC G20 Accountancy Summit, which took place in London, UK, July 23-24. They build on IFAC's previous submission to the G20, which was issued prior to their April 2009 meeting.

About IFAC
IFAC (http://www.ifac.org/) is the global organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. IFAC is comprised of 157 members and associates in 123 countries and jurisdictions, representing more than 2.5 million accountants in public practice, education, government service, industry, and commerce.