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By Patrick Crawford, corporate engagement, Climate Disclosure Standards Board (CDSB)

At the recent non-financial reporting conference in London, in association with ACCA and Deloitte, commentators including Richard Howitt MEP, noted that 80% of shareholder value is now from intangible rather than physical and financial assets.

Coincident with this conference, Eurosif and ACCA launched their investor survey on non-financial reporting. The key findings from 90 investors support the need for integrating non-financial and financial reporting:

  • Non-financial reporting must be comparable across companies.
  • Non-financial information should be better integrated with financial information
  • Quantitative key performance indicators (KPIs) are essential and Qualitative policy statements are very important to assess financial materiality.

Rather than information that simply complies with reporting requirements, investors are seeking reports that communicate performance, including clear insights into issues that have a material impact on a company’s current and future performance. Communicating performance is of value to investor decision-making but equally to businesses as the integration of non-financial and financial information opens up new avenues of communication within the company, providing additional perspectives to their Boards.

My clear sense on leaving the non-financial conference was that investors are using this non-financial information now but they need more help in understanding the impacts on the business. A company’s response to these issues adds value by reducing risks and creating opportunities for the future. Placing ‘sustainability’ into its own report has been a useful first step for companies but there are still many people who say they do not know what ‘sustainability’ means. However, they all have views on what is needed for a business to be ‘sustainable’ in the long-term. Connecting these material issues with financial results requires integrated thinking as much as integrated reporting.

We know that many companies are taking these issues seriously, but until now there has been no structured means of communicating performance in mainstream reports in a consistent and compatible way with financial accounting standards.

The Climate Disclosure Standards Board (CDSB) was created at the World Economic Forum at Davos in 2007 by a group of international business organisations in response to the absence of a structured means of providing climate change-related information in mainstream reports. CDSB’s Technical Working Group drives its work and includes representatives from key global institutions including the main accountancy firms, professional accountancy institutions, investors, report preparers and governments. CDSB’s Reporting Framework is designed to integrate non-financial and financial information in a credible and standardised way.

As the CDSB Framework adopts relevant principles from existing financial standards, companies, accountants and corporate report preparers will find the Framework familiar and useable. CDSB works closely and collaboratively with other global sustainability bodies such as World Business Council for Sustainable Development (WBCSD) and World Resource Institute (WRI). In addition CDSB and CDP (formerly Carbon Disclosure Project) have MoUs with the International Integrated Reporting Council (IIRC), Global Reporting Initiative (GRI) and the US Sustainability Accounting Standards Board (SASB).

CDSB is managed as a special project of CDP. More than 4,200 companies who report their climate change emissions using the CDP process are already ahead of the game. By using CDSB’s Framework they can apply the lens of materiality to their CDP response, incorporating the risks and opportunities from climate change and the growing scarcity of natural resources in their annual reports in a transparent, consistent and comparable way.

The Framework is designed to be ‘Standards Ready’, ready to be adopted by governments in support of the introduction of national regulation on disclosure of climate change and other non-financial impacts. DEFRA’s official guidance cites CDSB’s Reporting Framework as one mean of compliance with UK mandatory requirements to report GHG emissions. Using the Framework provides a means of preparing a company for the increasing amount of regulation that is being discussed and drafted around the world.

To assist companies and report preparers in using the Framework CDSB, with the support of ACCA, has produced a guidance document available here. The CDSB website includes other resources, including recordings of recent webinars introducing the Framework.

  • If you would like any further information about integrating non-financial with financial information using CDSB’s Framework, please contact, or visit to download CDSB’s Framework and Guidance.

James Bonner, independent sustainability consultant 

Materiality is defined by the IASB (International Accounting Standards Board) as ‘an entity-specific aspect of relevance based on the nature or magnitude or both of the items to which the information relates in the context of an individual entity’s financial report.’ In other words – it is about making judgements on the significance/importance of the variety of issues that might be considered for inclusion in the financial reporting of organisations – both according to their nature (what they relate to) and their magnitude (how big they are). If something is material to an organisation, it should be reported on, if it is not material, then it does not necessarily need to be.

By its very nature, materiality is an inherently subjective concept, and difficult to set and define. It is quite obvious that making professional judgements on levels of materiality is integral to the financial reporting and auditing process. Consequently, to support practitioners, a number of bodies involved in the accounting sector – standard setters, regulators, sustainability reporting groups – have developed guidance on their understanding and perspective on the concept.  

The following table provides some excerpts from guidance/definitions of materiality from such bodies, and their sources. A number of the issues included, and terms used, are similar – but it is worth considering what/who some of the substantive terms in these definitions relate to. For example, who are the ‘users’ of the accounts referred to in these definitions, and what type of information is likely to influence their decisions about an organisation?


Of interest, several prominent sustainability reporting bodies make reference to the interests of wider stakeholders and broader organisational performance (including social and environmental issues) in their guidance – which, in doing so, extends the scope of what might merit inclusion as material issues in financial reporting.  More inclusive and wide ranging definitions of materiality will, obviously, have implications for the accounting sector, as practitioners will have to use their professional judgement on issues and topics which may be important to users of the financial statements.

This blog post intends to primarily support ACCA’s Accounting for the future, in particular the session ‘Measuring risk: Material or significant – what it means to me’ on Monday the 8th Of October by looking at some key bodies involved in the reporting and auditing process, and their definitions of the concept of materiality- an issue which will be discussed in greater detail in the session.

Additionally, a number of other presentations during the conference relate to the themes covered in this blog post:

Monday 8th October
11.30:12.39 Is Natural Capital a Material Issue?
14:00-15:30 Measuring risk: Material or significant – what it means to me
16:00-17:00 Practical Workshop: materiality matrices

Tuesday 9th October
12:30-13:30 Inclusive and Integrated – the future role of the CFO

Wednesday 10th October
12:30-13:30 Evolution of the Annual Report