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Management Accounting Evolution With Integrated Thinking & Sustainability Reporting A.N.Raman Member ICAI Member A

Management Accounting Evolution With Integrated Thinking & Sustainability Reporting A.N.Raman Member ICAI Member Advisory Group NVG on BRR. Structure of the Content. Context Setting . The Global and India Evolution of Responsible Business Reporting.

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Management Accounting Evolution With Integrated Thinking & Sustainability Reporting A.N.Raman Member ICAI Member A

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  1. Management Accounting Evolution With Integrated Thinking & Sustainability Reporting A.N.Raman Member ICAI Member Advisory Group NVG on BRR

  2. Structure of the Content

  3. Context Setting • The Global and India Evolution of Responsible Business Reporting

  4. DifferentiatingSustainable Development and Sustainability Former is the concern of the Governments. Later one is the business entity level perspective

  5. Sustainability Reporting: A Positive Lens • 20 years ago no-one reported on sustainability or CSR, and now: • Most of FTSE and S&P 100 companies issue a separate report • Over 3000 companies produced such reports in 2008 • G250 companies: 197 of 250 produced such reports, rising to 207 for those with an integrated approach.

  6. Sustainability Reporting: A Negative Lens • Of the 46,000 listed companies, few with any form of sustainability reporting & disclosure • Specific challenges include: • While volume up, analysis weak; • Data consistency is poor; • Timing is behind main report; • Engaging professional accountants.

  7. Specific Developments to Improve Integration • GRI well established but a number of initiatives to improve integrated reporting: • 2009 King Code on Governance for SA • Carbon Disclosure Standards Board Reporting Framework • A4S Connected Reporting Framework • IASB ED on Management Commentary

  8. A4S • Created by HRH The Prince of Wales in 2004 Why? • To raise awareness of sustainability within organisations and, especially, among financial professionals • To embed sustainability into the “DNA” of organisations • To help to improve reporting of sustainability to stakeholders ICAI is a member of the ABN network of A4S.

  9. Why the IIRC Was Established “To create a globally accepted Integrated Reporting framework which brings together financial, environmental, social and governance information in a clear, concise, consistent and comparable format. The aim is to help with the development of more comprehensive and comprehensible information about organizations, prospective as well as retrospective, to support transition to a more sustainable global economy.”

  10. The evolution of Reporting…

  11. …Integrated Reporting – the Future

  12. Some Highlights on the NV Guidelines on Responsible Business Reporting • Uniquely Indian --- considers and factors in the critical challenges in India. • Takes into account the best practices from around the world- ISO 26000, etc. • Has been drafted after 12000 man hours of work with experts. • Extensive stakeholder interaction and discussions reveal wide acceptance. • A good starting point to move from a charity orientation to Responsible business and a level playing field for all.

  13. Change Drivers - driving shifts in the Management Accounting.

  14. COMPONENTS OF THE PARADIGM SHIFT ... and tomorrow

  15. Central themesBusiness model & value creation

  16. Six Capitals and Their Measurement Stock and Flow of these capitals need measurement and reporting.

  17. The Building Blocks

  18. Responses from the Cost and Management Accounting at two levels: Framework Professional

  19. Frameworks for Measuring Stock and Flow THE GUIDELINES ARE UNDER EVOLUTION GLOBALLY

  20. Frameworks for Measuring Stock and Flow

  21. CMA Framework Mapped with NVG

  22. CMA Role -- Leadership & Business Strategy

  23. CMA Role -- Management, Operations & Accounting

  24. CMA Role -- Reporting and Disclosure

  25. CMA – As an External Assurance Provider on Sustainability Report • No legal mandate as of now for any particular profession to provide the external assurance on sustainability or responsibility reports. • Right time to build competitive advantage by building capacities on sustainability assurance. • ISAE 3000 and AA1000 series can be used in combination to assure a sustainability report. • India has the USP of resting the process on CASB issued only by our institute and NVGs offer the ambience. • Core Competency map of CMA Canada is inclusive of sustainability explicitly.

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