CPA Canada explores future of corporate reporting

As the corporate reporting landscape continues to evolve, CPA Canada brings the business community together to learn about innovative reporting methodologies that seek to address the changing needs of stakeholders.

Sustainability is a necessity, not an option, in business

"Including sustainability in the core business strategy is not an option, it is key,” stated Marie Claire Daveu, Kering’s chief sustainability officer and head of International Institutional Affairs, at a recent event co-hosted by Chartered Professional Accountants of Canada and Corporate Knights in Toronto.

Daveu was invited to speak to prominent members of the Canadian business community — including investors, preparers, standard setters and regulators — about Kering’s environmental profit and loss account (E P&L), and how it plays a significant role in business planning by allowing the company and its stakeholders to learn more about its supply chain and the corresponding costs associated with its environmental footprint.

The E P&L, established in 2011, measures and monitors Kering’s environmental impacts within its own operations and across all of its supply chains.

Kering, a French conglomerate, owns luxury, sports and lifestyle brands such as Gucci, Yves Saint Laurent, Balenciaga, Stella McCartney and PUMA.

Marie Claire Daveu, Chief Sustainability Officer and Head of International Institutional Affairs at the luxury goods manufacturer, Kering and Joy Thomas, President and CEO of CPA Canada.

Sustainability at the core of business strategy

“When you look at the most important issues of our century, you see loss of biodiversity, resource scarcity and, at the top, climate change. And, when you think about the link with our business, you’re talking about cotton, pythons and animals; you understand very quickly that if we want to continue our business and sell our products, we have to change our model of business. We have to change our paradigm,” Daveu said.

In sharing some key insights and learning from Kering’s journey, Daveu says companies must be innovative if they want to change the paradigm. They must start with placing sustainability at the core of their business strategies. This will allow them to understand their businesses’ environmental and social footprint, and most importantly link that back to their strategy, risk management, financial performance and operations.

Describing the E P&L as a business management tool, she highlighted the value of using the data from it to identify trends. For example, data showed that 93 per cent of Kering’s environmental impact is generated within its supply chain. Kering hopes to address the environmental impacts by investing in innovative solutions, she explained.

Read about Kering’s open-source methodology.

Another key area of the company’s ongoing work is consideration of the full life cycle of a product, which includes taking a product from the raw materials stage to the end-of-life stage in order to develop a truly 360-degree view of the environmental impacts resulting from its business activities.

CPA Canada exploring the future of corporate reporting

CPA Canada’s president and CEO, Joy Thomas, who welcomed guests to the session, said investors and other stakeholders are increasingly demanding information about a company’s environmental, governance and social performance. This is a reality of the evolving business reporting environment, and CPA Canada is committed to helping businesses adapt to this focus on sustainability.

“CPA Canada believes that good business encourages and cultivates long-term, sustainable economic and social development,” Thomas said. “For more than 20 years, we have been a leader in driving awareness and engaging stakeholders on the role of sustainability in capital markets, and have been advocating for enhanced reporting in this area.”

This was the latest in a series of CPA Canada events exploring ways in which corporate reporting in Canada and globally is evolving to satisfy the changing needs of stakeholders. Recent activities include an information session on the work of the Task Force on Climate-related Financial Disclosures featuring Bank of England Governor Mark Carney in July, and an ongoing research project with Natural Step Canada aimed at better measuring and valuing the country’s natural capital.

Marie Claire Daveu from Kering sharing the E P&L methodology with the Canadian business community.

CPA Canada's resources

The business and reporting implications of climate change and sustainability matters are important areas of focus for the Canadian accounting profession. CPA Canada continues to provide resources in this area:

CPA Canada wants to hear from you

We want to understand how Canadian businesses and organizations are integrating environmental issues into business, accounting and reporting processes. We invite you to share your thoughts on required research, guidance and support in this area by contacting Rosemary McGuire, principal, Reporting and Capital Markets, CPA Canada.

Credits:
Photos: THE CANADIAN PRESS/Salvatore Sacco
Video: GRANGER DIGITAL/Stephen Granger

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