Extent of Capacity of Company’s Annual Report & Corporate Governance Statement for Enabling a Company to Meet Current Environmental and Climate Change Risk Challenges

Accounting and Financial Theory
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Contents
Introduction.................................................................................................................................................3
Part 1: Extent of Capacity of Company’s Annual Report & Corporate Governance Statement for Enabling
a Company to Meet Current Environmental and Climate Change Risk Challenges.....................................3
Part 2: Sustainability Reporting Guidelines developed by the Global Reporting Initiative framework........4
Part 3: Integrated reporting and its use in addressing the limitations of the annual report and the
corporate governance statement................................................................................................................4
Part 4: Explaining the advantages and disadvantages associated with integrated reporting using
theoretically informed arguments...............................................................................................................6
Part 5: Relevance of integrated reporting to various stakeholder groups...................................................7
Conclusion...................................................................................................................................................8
References...................................................................................................................................................9
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Introduction
As such, businesses are emphasis on disclosing their sustainability measures in the
annual report by developing integrated reports. In this context, this report has been developed
from the perspective of an accounting firm that aims to provide explanation regarding the
measures that can be adopted by businesses for addressing the environmental and climate change
risk.
Part 1: Extent of Capacity of Company’s Annual Report & Corporate
Governance Statement for Enabling a Company to Meet Current
Environmental and Climate Change Risk Challenges
The directors of a company hold the responsibility of developing and presenting the
annual report. The annual report developed by a company intends to disclose its financial
performance that helps its stakeholders in assisting the decision-making. The directors’ report
included within the annual report of a company discloses information in relation to its state and
its compliance with the financial, accounting and Corporate Social Responsibility (CSR)
standards. However, it provides only an overview regarding the environmental and social
performance of a company and is not able to give a detailed overview regarding the company’s
CSR performance. The operating financial review provides depiction only regarding the past
financial performance such as gross revenue and does not give any details regarding its future
growth prospects (Steyn, 2014).
The corporate governance statement of a company only provides information regarding
the structure, rules, practices and processes that are used for directing and managing the
performance of a company. It provides an overview regarding the measures adopted by the
Board of Directors of a company for protecting the right of its stakeholders. As such, it can be
said that annual report and corporate governance statement provides only an overview regarding
the environmental performance and does not provide sufficient details regarding the various
measures that has been adopted for promoting the environmental and social benefits. They are
not able to meet the interests of its wide range of stakeholders that requires different type of
environmental and social disclosure to predict the long-term performance of a company (Wadee,
2011).
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