T5

Question 1

What is sustainability reporting

Answer 1

Company communicates sustainability related information stakeholders, including impacts and dependencies.

Question 2

Financial materiality and relevance to sustainability reporting

Answer 2

Focuses on issues that may create a financial risk and opportunities affecting statement of financial position and future prospects.

These financial risks and opportunities may arise from sustainability-related issues.

Question 3

Impact materiality and relevance to sustainability reporting

Answer 3

This focuses on the effect of a company’s actions have on people and the environment.

Covers positive and negative effects.

It will also identify which impacts on people and the environment are most important to stakeholders.

Question 4

Double materiality

Answer 4

This considers financial materiality as sustainability issues may create financial risk and opportunities.

It also considers impact materiality as sustainability activities materially impact on people and the environment

Question 5

Who is financial materiality most relevant too

Answer 5

Investors and lenders- This is because they want to know if a businesses future prospect is affected by sustainability related risks and opportunities)

Question 6

Who is impact materiality most relevant too

Answer 6

A wide range of stakeholders as they want to know the impact of businesses on people and the planet

Question 7

Who is double materiality most relevant too

Answer 7

Wide range of stakeholders, including investors and lenders.

Question 8

Advantages of sustainability reporting

Answer 8

Facilitate access to capital and investment by providing info on risks and opportunities

Help with sustainability risk management and identification of opportunity

Support regulatory compliance from transparency

Can help with tracking performance and encourage sustainable business practices.

Employee motivation as proud to work for sustainable company

Question 9

Challenges of sustainability reporting

Answer 9

Several reporting frameworks so hard to keep up with changes in regulation/ requirements and decide which framework to use.

Hard to gather data on GHG emissions across whole supply chain.

Multiple stakeholders prioritising different info so hard to report to cover all needs.

Greenwashing risk

Resource/ time intensive/ gathering data