Using sustainability financial reporting to attract investors


Personal Finance

Using sustainability financial reporting to attract investors

 

Listed companies are required to publish annual audited financial reports and interim unaudited financial reports prepared in accordance with the International Financial Reporting Standards (IFRS). Investors rely on the financial reports to get a glimpse of the financial performance and fundamentals of the companies.

Generally, financial statements are voluminous and complex for most investors. In addition, most disclosures in the reports are often historical, quantitative and only depict the short- term performance of the company.

Gradually, issues of how companies impact the society they operate in- the environment, overall Environmental Social and Corporate Governance(ESG) structures- have increasingly become key for investors as they decide which companies to invest in. As much as financial performance is still very important, investors are turning to ESG frameworks that indicate long-term sustainability of businesses.

The Covid-19 pandemic has posed a real stress test to sustainability of businesses and the robustness of their operations. Business leaders have been forced to rethink and reimagine their vision of success, which was previously premised primarily on financial performance. Most listed companies, like other businesses, have been highly impacted by the pandemic. At the same time, investors, now more than ever are demanding information faithfully and accurately on the degree of impact of the pandemic on the listed companies’ business; the mitigation measures taken to ensure the ir sustainability as well as forecasts on operations of the business.

It should be appreciated that companies cannot predict, with precision, the effects of Covid-19 and that the actual impact largely depends on several factors beyond a their control and knowledge. However, investors have a right to this information as well as the sustainability fundamentals of those companies. Investors are now more informed and as the Covid-19 pandemic unfolds, there will be more scrutiny on the robustness, operational optimisation and sustainability of the business and operations of listed companies. Sustainability reporting would therefore be a vital tool for listed companies to bolster trust and confidence among investors and all stakeholders.

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Going forward, companies, listed or otherwise that seek to differentiate themselves and are keen to stay relevant must make a quick shift from just financial reporting to integrated reporting. Integrated reporting enables a company to tell its story of positive societal and environmental impacts and contributions; its intangible assets and competitive advantages tied to ESG matters and financial performance including profitability and returns to its shareholders and investors. Now is the time for businesses to prove to investors the “S” in ESG, and those that hope to stay relevant have no choice but to reconcile the business’ worth beyond just a balance sheet.

This holistic approach will come with its own share of challenges, top of them being the shift in mindset from the traditional financial reporting. There is an urgent need to transform the thinking around ESG matters and integrated reporting.

For companies to create long-term value that will sustain them during and after Covid-19, their boards must empower management and investor base to bridge the information gaps around ESG and integrated reporting. Companies must also continually monitor the effects of the Covid-19 pandemic on the business performance and operations and provide accurate information in a proactive manner to investors and other stakeholders.



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Queensland passes law to jail priests for not reporting confessions of child sexual abuse


Priests in Queensland will now be compelled to break the seal of confession to report child sexual abuse or face three years in jail.

New laws passed through Queensland Parliament will force members of the clergy to report known or suspected cases of abuse to police.

The legislation means religious institutions and their members are no longer able to use the sanctity of confessional as a defence or excuse in child sex abuse matters.

Police Minister Mark Ryan said the laws would ensure better protection for vulnerable children.

“The requirement and quite frankly the moral obligation to report concerning behaviours towards children applies to everyone everyone in this community,” he said.

“No one group or occupation is being singled out.

The laws apply to information received from now, even if it relates to abuse that occurred in the past.

The law was supported by the Opposition.

‘They will go to jail before obeying’

But One Nation MP Stephen Andrew said it set a dangerous precedent for religious leaders.

“The bill poses a real danger for public trust and cohesion in our community,” Mr Andrew said.

Archbishop Mark Coleridge argues the new law won’t improve child safety.(ABC News: Lincoln Rothall)

“Many priests and bishops have publicly stated that they will go to jail before obeying these laws.

“How confident can the people of Queensland be that they live in a free and open democracy governed by the rule of law, where the state jails its bishops?”

Members of the Catholic Church in Queensland have previously voiced their opposition to the laws.

Earlier this year, Brisbane Catholic Archbishop Mark Coleridge told the ABC he believed breaking the confessional seal would “not make a difference to the safety of young people”.

‘It’s about morality’

Hetty Johnston from the child protection group Bravehearts expressed her support for the new laws.

“I don’t think there is enough jail time in the world that would replace a child’s innocence … what sort of punishment is suitable for someone who would allow that to happen?

“So I don’t know that it’s about time, it’s about morality.”

The laws enact recommendations of the Royal Commission into Institutional Responses to Child Sexual Abuse.

The passing of the law also coincides with Queensland child protection week.



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Belarus detains journalists reporting on protests against President Alexander Lukashenko


British Foreign Secretary Dominic Raab has condemned the mass detention of more than 50 journalists in Belarus.

A witness has described seeing Belarusian police detain scores of reporters on Thursday (local time) in the country’s capital Minsk.

It was reported journalists’ phones and identity documents were confiscated.

The incident comes after Belarus authorities blocked more than 50 news websites that were reporting on protests over the re-election of President Alexander Lukashenko.

Citizens have rallied against what they believed was a fraudulent poll on August 9, delivering the leader another term in government after 26 years at the top.

Police responded harshly in the first days of the protests, arresting some 7,000 people and beating many of them.

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Some of the journalists detained in the former Soviet bloc country include those employed by the UK’s publicly owned BBC, as well as local and international media.

Belarusian President Alexander Lukashenko has not bowed to pressure to stand down.(AP: Dmitri Lovetsky)

“This was a blatant attempt to interfere with objective and honest reporting,” Mr Raab said on Twitter.

“The Belarusian authorities must stop targeting journalists and #defendmediafreedom.”

More than a week after the election, the European Union said it did not recognise the results of the Belarus presidential election and would impose sanctions on those responsible for defrauding the poll.

Reuters



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How ABC Science is navigating the challenges of reporting on the coronavirus pandemic and one tough critic


Health reporter Tegan Taylor may be one of the co-hosts of the ABC’s popular Coronacast podcast, but that doesn’t mean everyone is a fan of her work.

While she was home schooling her kids earlier this year, she got the following review in her six-year-old daughter’s Year 1 journal:

My mum dose croanacast.

We have to stay cwieyet for half an hour.

It is boring.

“I’m clearly raising a tough critic,” Taylor says.

Recording the Coronacast podcast has been a challenge for co-host Tegan Taylor when her daughter has been home schooled.(ABC Health: Tegan Taylor)

ABC Science’s online team of specialist science, health and technology reporters have been reporting on the coronavirus pandemic since the virus emerged.

We published our first explainer on coronavirus on January 20 and, as the virus has spread around the world, many members of the team have been reporting on little else for the past few months.

“I remember in January I was still so focused on the health impacts of the bushfires that when this ‘mysterious viral pneumonia outbreak’ popped up in China, I didn’t think too much about it,” health reporter Olivia Willis says.

“That obviously changed pretty quickly, and since mid-February I’ve been covering nothing but COVID-19.”

From the start, we’ve been working closely with our colleagues in News to ensure the coronavirus explainers and in-depth health features we’ve been writing reach as big an audience as possible, and complement the rest of the ABC’s coronavirus coverage.

We’ve also been helping to check stories written by general reporters, who might not be as immersed in the intricacies of health reporting as we are.

“Good science takes time, but the audience has been desperate for information and answers to their questions — right now.

“At times we’ve had to break our own rules, such as reporting on preprint data — normally we only report on data once it’s been published in academic journals (more about that later) — but we’ve always tried to be honest with the audience and explain what we do and don’t know.”

The stories we’ve been writing have been greatly informed by you: the topics you’ve been searching for online and the many thousands of questions you’ve been asking us to investigate.

Screen shot of Willis and Kruszelnicki on screen with small box showing listener asking questions.
As well as filing online, health reporter Olivia Willis has been helping Dr Karl answer triple j listeners’ coronavirus questions on air.(ABC Health: Olivia Willis)

In the beginning, we were writing a lot of fast turn-around explainers, such as how COVID-19 is different from the flu or how long coronavirus lasts on different surfaces.

As case numbers have, thankfully, fallen around Australia, that’s evolved into deeper dives on topics like what issues you need to be aware of if you decide to wear a face mask, or who the frontrunners are in the coronavirus vaccine race.

The challenges of covering an emerging public health emergency

ABC Science has always been a geographically dispersed team, with reporters working from the ABC’s offices in Brisbane, Canberra, Sydney and Melbourne.

So we’re perhaps more used to working remotely than most, although now that we’re all working from home our regular Zoom editorial meetings have seen more than one cameo appearance from partners, pets and progeny.

Compilation of three photos showing two dogs and a cat.
Critical members of ABC Science’s WFH team: Banjo, Leo and Scout.(ABC Science)

But the real challenges in covering this pandemic have come from the subject matter itself.

As a virus new to humans there’s little we know about this coronavirus and, despite the many active research projects underway, scientific progress is gradual.

Often the only answer an expert can give us to a question we’ve asked is “we don’t know yet” and that’s frustrating for both us and them.

But we believe it’s important we also give you these insights into the scientific process, so when you’re reading one of our stories you know what we know from the latest research, what an expert is speculating on within their area of expertise and what we just don’t know yet.

A dying cell (greenish-brown) heavily infected with SARS-CoV-2 virus particles (pink), isolated from a patient sample.
A dying cell (greenish-brown) heavily infected with SARS-CoV-2 virus particles (pink), isolated from a patient sample.(National Institute of Allergy and Infectious Diseases, NIH)

Understanding how the virus, SARS-CoV-2, and the disease it causes, COVID-19, works is a complex and painstaking process, as can be seen in our still limited understanding of how immunity from the virus occurs.

Which is not to say the medical and broader scientific community have been resting on their laurels.

The number of papers published on COVID-19 has already surpassed 25,000, according to LitCovid, a curated hub of all the scientific literature on the virus, and I suspect a website bookmarked by many health and science reporters around the globe.

That also means the pace of reporting the latest research has been fast and furious.

While there are at least 200 different drugs being trialled as treatments, just a handful have hogged the headlines.

Keeping on top of the latest evidence — and spin (hello hydroxychloroquine) — is challenging even for medical researchers.

With scientists scrambling for a solution, much of the early information in the pandemic was based on incomplete science, and many results have been hastily uploaded to preprint servers like medRxiV and bioRxiv.

These servers help scientists quickly collaborate, but the studies have not been peer-reviewed and published in a journal.

Multiple syringes organized in a pattern over orange background.
Finding a coronavirus vaccine will be difficult as most vaccines that reach clinical trials don’t make it to market.(Getty Images: Westend61)

In many cases we’ve chosen not to report on preprint research as the findings are very preliminary and have not yet been vetted by experts.

In the rare cases where we have, we’ve made sure to let you know the research isn’t yet peer-reviewed.

Of course, that doesn’t mean that everything that does get published in a journal is above reproach, as we’ve seen with some recent high-profile retractions of papers, but peer review is still the best system we have.

In an interview with science journalist Genelle Weule on the topic of treatments, seasoned science blogger and industry insider Derek Lowe summed it up:

And as our knowledge of this coronavirus deepens, it’s natural that our understanding of the virus will also change as we accumulate more data.

That’s one of the key challenges of reporting on a situation that is constantly evolving.

With all of our coronavirus stories we’ve done what we always do, talk to independent experts who weren’t involved in the research to help us understand how this new work fits in with what we already know in this area, and to cast a critical eye over how it was done.

Independent experts also help provide crucial context to our stories, particularly in a situation like this where the Australian experience has been very different to what is happening overseas.

The virus is only part of the story

Unfortunately a global pandemic also brings with it a lot of health misinformation, which can put further strain on people already under stress.

Covering this topic has been a focus for technology reporter Ariel Bogle.

“That’s why we try to focus on the actors, motivations and strategies, as well as how it’s impacting the Australian community.”

Reporting on COVIDSafe has been a major focus of our technology coverage.

A mobile phone held in a person's left hand shows the homepage of a government health app.
Australian authorities say the COVIDSafe app will remain a key contact-tracing tool as economies reopen and potential outbreaks occur.(ABC News: Keane Bourke)

Ariel has also been reporting extensively on the Federal Government’s contact tracing app COVIDSafe, and her and Olivia’s initial analysis of the app’s potential effectiveness provoked extensive online discussion and was even quoted in Parliament by Shadow Assistant Minister for Communications and Cybersecurity Tim Watts.

“COVIDSafe is an unprecedented piece of technology and was sold as key to the Government’s lifting of lockdown,” Bogle says.

“It was important to ask hard questions — most of all, does it work?”

As well as reporting on the physical health effects of this coronavirus, Willis has written many articles about the impact of the pandemic on our mental health.

“It became clear early on that the mental health impacts of COVID-19 were going to be a really important part of the story,” she says.

“So many people were feeling understandably stressed, frightened and anxious, and we wanted to provide resources that could help people cope.”

Your go-to source for reliable health advice

We’ll continue to bring you the information you need to know about this pandemic, but we’re also looking for new ways to make smart health advice easier for you to access.

So on June 1, we launched the ABC Health Instagram account, @abchealth.

We’re using it to bust health myths and share practical health information with you, both now and once the pandemic is over.

“We’ll be looking at all aspects of health — so topics like exercise, mental health, diet, health misinformation, and everything in between,” ABC Science social media producer April Chan says.

“We’re also very excited to get our audience involved, so we’ll be asking for your questions and answering them along the way.”

So if you’ve got a health question, whether it’s about coronavirus or something else, send us a DM.





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COVID-19 reporting needs to be just right


The pandemic is the only tale that people want to read about ideal now. But it is the exact same tale, every single working day. In an hard work to preserve items fresh, is the media resorting to ‘Goldilocks reporting’?

NSW Premier Gladys Berejiklian speaks to the media (Picture: AAP/Bianca De Marchi)

The COVID-19 pandemic needs Goldilocks reporting that’s juuust correct. But which is not what each day journalism is optimised for. In the now many years-lengthy war with the world-wide-web and social media, classic media has fought its corner every single early morning and evening by generating “news” all shouty: whatever the story, it gets to be news by becoming “TOO HOT” or “TOO COLD”. 

In Australia the place so substantially journalism has been shaped by the News Corp tabloid tactic, there’s a shrug. “It is,” as Donald Trump famously explained to Australia’s Jonathan Swan before this week, “what it is.”

But in the moments we’re living as a result of, that also easily arrives across as the journalistic equivalent of shouting “FIRE” in a crowded cinema (remember those?) creating panic and distress — and undermining assurance in the media on the way by way of.





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REIT investors bracing for a dire reporting season


Andrew Parsons, the founder and chief investment officer of real estate securities manager Resolution Capital, said any notion or clarity would be appreciated “but I’m not holding out too much hope”.

“Obviously there’s some exceptions, such as most logistics-related real estate, but investors will be trying to ascertain the extent to which rent cashflows are lost, deferred and permanently reset lower,” Mr Parsons said.

Due to COVID-19, the majority of A-REITs have already withdrawn their 2020 financial year guidance, cut distributions and several raised equity. Many in the retail sector have slashed asset values by as much as 11 per cent.

While the macro environment is supportive, fundamentals vary by asset class with retail and office he harder hit.

Sholto Maconochie, the head of real estate research at Jefferies, says he expects a “big divergence” in underlying earnings on a funds-from-operations basis versus cash-flow.

He said investors will be paying “close attention” to the treatment of rent abatement and deferral.

“We also expect many A-REITs may provide only limited or no 2021 financial year guidance,” Mr Maconochie said.

He said while the virus will make it difficult for A-REITs to provide meaningful guidance, he will be seeking updates on rent collection rates; the level of rent abatement/waivers agreed; and the direct and indirect impacts on the results in the year ahead.

SG Hiscock & Co. portfolio manager of Australian real estate investment trusts Grant Berry said for the retail-focused trusts, while it has been in the front line of the lockdown and there has been income implications, “there may be encouraging signs of foot traffic improving from the low levels in March/April”.

“As investors we will be looking for progress and information on Small Medium Enterprise [SMEs] lease negotiations under the National Code of Conduct and any lease negotiations with tenants that reside outside the Code and how these have been structured,” Mr Berry said.

The office sector has also been hard hit with staff working from home and recent surveys indicating that the trend will continue, leaving towers half empty.

Mr Maconochie believes the “death” of the office is overdone, and he remains contrarian on his buy recommendations for landlords Dexus and Centuria Office REIT.

“But I concede negative office sentiment on work from home and structural shifts may see Dexus underperform in the near term,” he said.

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For Mr Berry, rent collection has been better in the office subsector, with a smaller proportion of SMEs and companies less impacted by the shutdown measures, as they have been able to predominantly work remotely.

“Our interest will be in the office sublease environment and changes in tenant preferences and requirements for space,” he said.

“The longer-term implications of [working from home] and how the landlords will adapt to work with this in order to enhance the appeal of the office environment will be another area of interest in the reporting season.”

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