UNCTAD organized a virtual Consultative Group meeting on 2nd and 3rd of March 2022 to build on the work already accomplished with the development of sustainability/SDG reporting related tools and activities implemented in the beneficiary countries of its technical assistance programme on Enabling policy frameworks for enterprise sustainability and SDG reporting in Africa and Latin America and regional workshops held in Africa and Latin America. Experts from Africa, Latin America and other regions shared their views and experience regarding their efforts to implement a sustainability reporting mechanism at the national level and provided comments and suggestions for the development of a policy recommendations document which will also contain main lessons learned and good practices in addressing practical implementation aspects pertaining to policymaking, regulation, and institutional and human capacity-building to establish and strengthen the national infrastructure for high quality sustainability reporting.
During the discussions at the Consultative Group meeting, experts highlighted that most countries are just starting their sustainability reporting journey and they face constraints in terms of the resources available at the national level to strengthen the sustainability reporting infrastructure. Despite the challenges faced, participants agreed on the importance of ensuring the quality of sustainability reporting and its reliability, relevance, and comparability in order to avoid greenwashing and promote sustainable behavior of companies.
In their efforts to establish and strengthen their national sustainability reporting infrastructure, countries face regulatory, institutional and capacity building challenges.
Key regulatory challenges include the need to move from voluntary to mandatory sustainability reporting and the fact that non-listed companies and SMEs represent the majority of companies in developing countries. Therefore:
- They see a need to differentiate categories or segments of entities with corresponding requirements. In the case of SMEs, a simplified sustainability reporting framework or recommendations would be needed.
- They believe a transitional approach is necessary to allow countries and entities to get ready and start reporting.
Concerning institutional challenges, experts stressed the need:
- For an inclusive and collaborative process at the national level with engagement of the public and private sectors and leadership from the government.
- For countries to identify or establish an entity in charge of sustainability reporting.
Finally on the human capacity challenges, experts underscored the need:
- To increase general awareness on sustainability topics, including stressing the importance of sustainability reporting to policymakers.
- To build technical skills in the sustainability reporting area for accountancy professionals, students and regulators. In this regard, SMEs will require additional support.
The inputs received from participants will be included in the policy guideline and will also feed into ISAR's communication with the ISSB on key challenges for developing countries in the adoption of international sustainability reporting standards.
