ACC 146 Sustainability and Strategic Audit

Students’ Activity Sheet #12

Name: _____________________________________________________________ Class number: _______

Section: ____________ Schedule: ______________________________________ Date: ______________

Lesson title: Reporting Frameworks Part 1 Materials:

Lesson Objectives: Student Activity Sheets
1. Explain the principles of Sustainability Reporting
2. Explain the key performance indicators References:
Sustainability Reporting:
Concepts and Framework By:
Intosai Working Group

Study Tip: Find your best time – Some people work better in the morning. Others work better at night.
Work out which time suits you and plan to study then. Don't study much later than your usual bedtime –
pushing yourself late at night can make you too tired to study properly

A. LESSON PREVIEW/REVIEW
1) Introduction
Greetings Buddy! Today we are going to discuss the framework in sustainability reporting. Shall
we start?

2) Activity 1: What I Know Chart

What do you know about this topic? Try answering the questions below by writing your ideas
under the What I Know column. You may use key words or phrases that you think related to the
questions.

What I Know Questions: What I Learned (Activity 4)

When do we say that our Company

is sustainable?

What is Global Reporting Initiative?

B. MAIN LESSON
Activity 2: Content Note
Sustainability Reporting Principles
1. Materiality
An organization is faced with a wide range of topics on which it can report. Relevant topics, which
potentially merit inclusion in the report, are those that can reasonably be considered important for
 ACC 146 Sustainability and Strategic Audit
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reflecting the organization’s economic, environmental, and social impacts, or influencing the decisions
of stakeholders. In this context, ‘impact’ refers to the effect an organization has on the economy, the
environment, and/or society (positive or negative). A topic can be relevant – and so potentially material
– based on only one of these dimensions.

For purposes of this Guidelines, and as defined in the GRI Standards, ‘impact’ shall refer to the effect
an organization has on the economy, the environment, and/or society, which in turn can indicate its
contribution (positive or negative) to sustainable development. Reporting organizations are also
expected to report on their impacts that are directly linked to their activities, products, or services
through a business relationship. It should be noted that ‘impact” does not refer to an effect upon an
organization, such as a change to its reputation.

2. Stakeholder Inclusiveness

The reporting organization should provide insight into the nature and quality of the organization’s
relationships with its key stakeholders, including how and to what extent the organization understands,
takes into account and responds to their legitimate needs and interests. Stakeholders provide useful
insights about matters that are important to them, including economic, environmental and social issues
that also affect the ability of the organization to create value.

3. Balance

Reporting must have no bias in the selection or presentation of information. The reported information
shall reflect positive and negative aspects of the reporting organization’s performance to enable a
reasoned assessment of overall performance. Reporting may also be compared against previously
reported targets, projections, and expectations.

4. Completeness

The reporting organization should consider the extent of information disclosed and its level of specificity
or preciseness, which might involve considering potential concerns regarding cost/benefit, competitive
advantage, and future-oriented information.

5. Reliability

The reporting organization should gather, record, compile, analyze, and report information and
processes used in the preparation of the report (similar to maintaining an audit trail) in a way that they
can be subjected to examination, and that establishes the quality and materiality of the information.

6. Accuracy

The reported information should be sufficiently accurate and detailed for stakeholders to assess the
reporting organization’s performance. Reports should include proper citation of information sources,
including estimated data and methodology for estimation.
7. Consistency and Comparability

The information in the report should be presented on a basis that is consistent over time and in a way
that enables analysis of any changes in the organization’s performance over time. It must also be
presented in a way that enables comparison with other organizations to the extent it is material to the
 ACC 146 Sustainability and Strategic Audit
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organization’s own ability to create value over time.

We conduct our businesses in an ETHICAL and Corporate

RESPONSIBLE manner Governance
Economic
OUR COMPANY is a We manage our KEY IMPACTS Environmental
Sustainable Business Social
Contribution to
Our products and services create VALUE TO
Sustainable
SOCIETY
Development

With this framework in mind, this sustainability reporting guidelines is crafted for PLCs operating in the
Philippines with a goal of making sustainability reporting relevant and value-adding for companies. The
Guidelines focuses on economic, environmental and social disclosures since governance disclosures
are made in the Integrated Annual Corporate Governance Report (I-ACGR) submitted separately to
SEC.

Beyond the purpose of transparency, it is designed to help PLCs assess their non-financial
performance across environment, economic, and social aspects of their organization to optimize
business operations, improve competitiveness, and long-term success. Disclosures contained in these
guidelines are those that contribute to describing and measuring the company’s sustainability
performance. Broadly, sustainability performance is measured in the way the corporation conducts its
business, and how it manages its key economic, environmental and social impacts. It builds on the
principles and metrics provided by the GRI Standards, SASB Standards, TCFD Recommendation and
other internationally accepted standards for non-financial reporting.

The terms economic, environmental and social are defined as follows:

Economic Environmental Social

An organization’s impact on the An organization’s impact on An organization’s internal and
economic conditions of its living and non-living natural external impact/s on the social
stakeholders and on economic systems, including land, air, systems within which it
systems at local, national and water and ecosystems. operates.
global levels. It does not focus
only on the financial condition of
the organization.

Global Reporting Framework

Founded in 1997, one of the main developers of sustainability reporting has been the Global Reporting
Initiative (GRI), which is a non-profit organization that promotes sustainability reporting. The GRI
currently provides the most widely adopted sustainability reporting framework. The GRI’s mission is to
make sustainability reporting standard practice by providing guidance and support to organizations.

Its reporting frameworks are developed with private sector business in mind. The GRI, however,
emphasizes that public sector organizations can also use the same reporting principles. The GRI
reporting framework provides flexibility to the reporters so that they can connect reporting to their
strategic targets and sustainability impacts.
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The GRI published the third version of its Guidelines (G3) in 2006. In 2011, the Guidelines were
updated to G3.1, expanding guidance on local community aspects, human rights and gender.37 The
Guidelines cover both aspects of how to report and what should be reported. In practice, what seems to
be difficult for reporters is to consider the topics that should be included in the report. This is related to
the questions of which issues are material for the organization and can advance sustainability
performance.

The first part of the Guidelines deals with report content. Principles of materiality, stakeholder
inclusiveness sustainability context and completeness provide help with this. The quality of reported
information can be ensured with the principles of balance, comparability, accuracy, timeliness, reliability
and clarity

The second part of the Guidelines deals with standard disclosures that should be included in
sustainability reports. This is divided into three types of disclosure:
• Strategy and profile, setting the overall context for understanding organizational performance and
sustainability impacts.
• Management approach, covering how an organization operates, providing context for
understanding performance in a specific area.
• Performance indicators, dealing with comparable information on the economic, environmental and
social performance of the organization.

Performance indicators are classified as core and additional indicators. Core indicators are identified to
be of interest to most stakeholders and assumed to be material, whereas additional indicators
represent emerging practice or address topics that may be material to some organizations but not,
generally, for a majority.

Economic performance indicators illustrate the flow of capital among different stakeholders and the
major economic impacts of the organization throughout society. Environmental indicators reflect the
inputs, outputs and modes of impact an organization has on the environment. Social indicators are
divided into four subgroups. First, labor practices and decent work indicators deal with fair globalization,
which aims to achieve both economic growth and equity through a combination of social and economic
goals. Second, society performance indicators focus on the impacts that organizations have on the
communities in which they operate, and how the organization’s interactions with other social institutions
are managed and mediated. Third, human rights performance indicators deal with the impacts and
activities an organization has on the civil, political, economic, social and cultural human rights of its
stakeholders. And finally, product responsibility indicators address the effects of products and services
on customers and users.

Activity 3: Skill building

True or False

1. Reporting must have no bias in the selection or presentation of information.

2. Reliability means that the reporting organization should provide insight into the nature and
quality of the organization’s relationships with its key stakeholders, including how and to what
extent the organization understands, takes into account and responds to their legitimate
needs and interests.
3. An entity is sustainable if it conducts its businesses in an ethical and responsible
manner
 ACC 146 Sustainability and Strategic Audit
Students’ Activity Sheet #12
4. Stakeholders include stockholders and lenders only.
5. Potential lenders are the primary stakeholders.
6. Core indicators are identified to be of interest to most stakeholders and assumed to be
material
7. Economic performance indicators illustrate the flow of capital among different
stakeholders and the major economic impacts of the organization throughout society
8. Environmental indicators reflect the inputs, outputs and modes of impact an
organization has on the environment
9. Social indicators are divided into three subgroups which is labor, civil, and political aspect.
10. The information in the report should be presented on a basis that is consistent over
time and in a way that enables analysis of any changes in the organization’s
performance over time

Activity 4: What I Know Chart

Now let us check your final understanding of practitioner’s engagements. I hope that everything about
the topic is clear to you. This time you must fill out the What I Learned column

Activity 5: Check for understanding

1. The following are the principles of sustainability reporting except
a. Balance
b. Completeness
c. Reliability
d. Comparability
2. Stakeholders include all of the following except
a. Stockholders
b. Employees
c. Lenders
d. None of the above
3. Which of the following statement is incorrect?
a. The reported information should be sufficiently accurate and detailed for stakeholders to
assess the reporting organization’s performance.
b. The information in the report should be presented on a basis that is consistent over time and in
a way that enables analysis of any changes in the organization’s performance over time
c. The reporting organization should consider the extent of information disclosed and its level of
specificity or preciseness, which might involve considering potential concerns regarding
cost/benefit, competitive advantage, and future-oriented information.
d. All statements are correct
4. Which of the following is a type of performance indicator?
a. Legal indicator
b. Standard indicator
c. Cultural indicator
d. Social indicator
5. Statement I: The information in the report should be presented on a basis that is consistent over
time and in a way that enables analysis of any changes in the organization’s performance over
time
Statement II: 8. Environmental indicators reflect the inputs, outputs and modes of impact
an organization has on the environment
Which of the following Statement is true?
a. I only
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Students’ Activity Sheet #12
b. II only
c. Neither I and II
d. Both I and II
 ACC 146 Sustainability and Strategic Audit
Students’ Activity Sheet #12
C. LESSON WRAP UP
You are done with this session! Let’s track your progress. Shade the session number you just
completed.

Activity 6: Think about learning! 🤔

Please read again the learning targets for the day. Were you able to achieve those learning targets? If
yes, what helped you achieve them? If no, what is the reason for not achieving them?
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1. In today’s session, which part of the lesson was least clear to you?
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FAQs
What are the benefits of using a framework?
- Frameworks eliminate the need to write a lot of repetitive code that you will find being used in many
different applications. The advantage of efficiency will never be underestimated