Sustainability Reporting Ecosystem: A Once-in-a-Lifetime Overhaul during the COVID-19 Pandemic

Abstract

The preparation of sustainability reports, which a negligible number of organisations had been doing until recently, will soon be the new reality for many more organisations. This research aims to present changes during the COVID-19 pandemic in the ecosystem of sustainability reporting pronouncements, especially those used by organisations. In our research, we compare important information about two different periods and the content demands in reporting on sustainability. Changes in the ecosystem are fundamental and unique. Based on the analysis of events and documents, the current research shows the changes in the ecosystem and the future dynamics in the ecosystem, including the principle standard setters (i.e., International Sustainability Standards Board and European Financial Reporting Advisory Group, EFRAG). The research shows that although the changes occurred during the COVID-19 pandemic, they did not significantly impact the ecosystem’s development or slow down or stop their development. The COVID-19 pandemic did not affect the speed or dynamics of changes. In the last few years, EFRAG and the European Union established their position and gained a significant influence in sustainability reporting, with EFRAG at the forefront. The European Sustainability Reporting Standards will be mandatory for organisations doing business in the European Union. At the same time, we do not expect that the IFRS Sustainability Disclosure Standards will be directly endorsed for use in the European Union. The paper presents a new perspective on examining sustainability via developing organisations’ reporting demands within the framework of the uncertain environment caused by COVID-19. In this context, our research also contributes to the literature. The study also has a potential practical impact on organisations and management since it illuminates a wide range of selected sustainability viewpoints and their reporting.

The Impact of COVID-19 Lockdown on West Romanian Crop Production in 2020

“…The COVID-19 pandemic and resulting public health crisis had an enormous impact on the global economy at all scales and in all sectors, with disruptions affecting most types of economic activity [2][3][4][5][6][7][8][9][10][11][12], including related sectors such as logistics, transport, and energy [13][14][15][16]24]. While tourism and related activities, including food services, were most affected [20][21][22][23][24], agriculture was affected to varying degrees, depending on the scale, type, and nature of production and geographical location .…”

“…Evidence from the top 10 affected countries showed that financial asset markets suffered, while real asset markets remained more stable, with trade and travel affecting the oil market [9]. Zdolsek and Taskar Beloglavec noted that "awareness of sustainability issues has improved, leading to improved sustainability reporting", as COVID-19 "had no effect on the dynamics of change in the ecosystem of non-financial reporting announcements" [10]. In Iran, Iraq, and Jordan, the sustainable business models of SMEs "shifted slightly from technological to social, customer and organisational changes", motivating SMEs to rethink their core competencies and redefine their sustainability, while the pressure of pandemic restrictions improved and increased the change and innovation components of SMEs [11,12].…”

"The 2023's new and the fresh": the International Sustainability Disclosure Standards

“…For preparers and users of sustainability-related disclosures, this ecosystem is less useful. One of the weaknesses is also the lack of linkage between financial and sustainability reporting (Zdolšek & Taškar Beloglavec, 2023).…”

“…The ISSB also builds on the World Economic Forum's Stakeholder Capitalism Metrics work. The ISSB aims to become the world-leading standard-setter for sustainability disclosure standards, building on the established expertise and practice associated with market-leading frameworks and standards (Zdolšek & Taškar Beloglavec, 2023).…”

“…Increased comparability and transparency would meet some of the information needs of the entity's investors and other stakeholders (Portilla et al, 2020;IOSCO, 2023). Cohorent, generally acceptable sustainability reporting pronouncements are crucial in the entity's reporting process and sustainability performance (Zdolšek & Taškar Beloglavec, 2023).…”