Use of reasonable estimates can improve sustainability reporting, ACCA says

Core Viewpoint - The Association of Chartered Certified Accountants (ACCA) emphasizes that organizations should not allow inconsistent data to hinder their sustainability reporting, asserting that useful disclosures can still be made without precise figures [1]. Group 1: Guidance on Sustainability Reporting - The ACCA provides practical methods for developing sustainability information using "reasonable and supportable" data, which aids organizations in making transparent assumptions about current conditions and future outcomes [2]. - The report highlights that organizations often estimate sustainability metrics when direct measurements are not feasible, and it serves as a guide as sustainability reporting requirements evolve [3]. Group 2: Data Quality Improvement Measures - Some organizations rely on third-party or proxy data, while others derive sustainability indicators from existing financial or operational records. The ACCA notes that many are working to enhance data quality at the source through staff training, dedicated sustainability data systems, and collaboration across the value chain [4]. Group 3: Importance of Estimates in Reporting - Although direct measurement is the ideal for robust sustainability data, the report acknowledges that estimates are sometimes necessary due to uncertainty or evolving measurement scopes. It suggests that gradually improving estimates can be a practical approach to generating useful sustainability disclosures [5]. - The report asserts that "reasonable estimates do not undermine the usefulness of the information if the estimates are accurately described and explained" [6].