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Embracing the New: The Sustainability Reporting Landscape in Romania

Adriana Florina Popa, Robert Aurelian Sova | August 22, 2022

Sustainability reporting communicates an organization’s performance in achieving the UN Sustainability Development Goals (SDGs) and, at the same time, shares decision-necessary information with stakeholders. A new environmental approach is needed. It is time for the accounting profession to embrace issues connected to sustainability in a global context in which the environmental, societal, and governmental aspects ask for a solution.

Professional accountants and the professional accountancy organizations (PAOs) that support them have a direct and active role in achieving extensive reporting that provides an exhaustive picture of the business’s sustainable value over time. This requires transition from traditional accounting services to integrated reporting, which provides both financial and non-financial services, as well as specific skills and competencies.

As citizens of a member of the European Union, we feel the influence of the European directives. Years ago, in 2014, an additional obligation for disclosure of non-financial information was introduced for large undertakings (Directive 2014/95/EU). Next, in its Communication on the European Green Pact, adopted in 2019, the European Commission committed to reviewing these first reporting provisions of non-financial information. The result was a directive proposal to strengthen and scale up sustainability reporting in the EU in the coming years—Proposal for a Directive on Corporate Sustainability Reporting.

In the context, of increasingly intense trends and concerns regarding ESG (environmental, social, governance) reporting, Corpul Expertilor Contabili si Contabililor Autorizati din Romania (the Body of Expert and Licensed Accountants of Romania, or CECCAR) took actions at different levels including:

  • Being part of the solution by integrating as a member in representative international organizations for ESG reporting framework;
  • Creating an ESG Knowledge Gateway for stakeholders;
  • Updating professional accounting education programs for initial and continuous development of our members;
  • Expanding existing qualifications;
  • Participating in connected events;
  • Boosting the partnership with regulators; and
  • Promoting ESG reporting through business networking.

Given current trends on the transition from traditional financial reporting and traditional accounting services, to integrated reporting, and in view of the growing concern about sustainability and corporate responsibility, CECCAR chose to be part of the solution. As ESG fast becomes the standard for businesses to manage and report on their risks, CECCAR has chosen to be proactive, in the public interest. We were the first professional body in Europe to join the Sustainability Accounting Standards Board (SASB) by becoming a member in 2020. In June 2021, the merger between the International Integrated Reporting Council (IIRC) and SASB into a unified organization—the Value Reporting Foundation (VRF)—was formalized. In November 2021, IFRS Foundation announced the International Sustainability Standards Board, consolidation with Climate Disclosure Standards Board (CDSB) and VRF.

To help our members understand and embrace this move to sustainability and ESG reporting, and to integrated reporting, CECCAR translated numerous relevant publications, articles and studies and published them on our website to create our ESG Knowledge Gateway. Our Knowledge Gateway offers a comprehensive suite of resources designed to help businesses and investors develop a shared understanding of enterprise value—how it is created, preserved or eroded.  

It is not always easy to make room between the traditional types of services for new and challenging ones that need time and resources. A change in mindset is essential, which CECCAR understands and is taking steps to action, including:

  • A new qualification program will be launched for our members to help them play an important role in ensuring high-quality sustainability reporting.
  • CECCAR updated professional accounting education programs for initial and continuous development of members with new ESG reporting topics.
  • A series of educational events on sustainability and integrated reporting (financial and non-financial) were organized since 2021 for accounting professionals anticipating the transformation within our profession towards a holistic approach in which all stakeholders are at the center of the value creation process, achieving a symbiosis between financial and non-financial objectives. CECCAR organized and attended a series of sustainability events, including an online workshop with Climate Disclosure Standards Board, as part of a Pan-European project. The workshop targeted professional accountants and representatives of relevant authorities to explore reporting non-financial information on climate change and assessing its impact on individuals, business and the economy as a whole.
  • Attended multiple sustainability events, including:
    • The Climate Group’s NYC Climate Week 2020 event, Accelerating change through the presentation of social, environmental and governance (ESG) information.
    • Accountancy Europe’s webinar Force for Change: Mobilizing the public sector for a sustainable economy,
    • IFAC and MOSAIC forum Towards a sustainable future in December 2021
    • Accounting for climate: practical guidance to incorporating the TCFD requirements, event organized by the IFAC, CDSB and We Mean Business Coalition held during COP26, the 2021 UN Climate Change Conference.

Because new standards and actions are needed and the consultation process between the interested parties is very important and leads to necessary conclusions and guidelines, CECCAR participated in the IFRS Foundation December 2020 consultation on sustainability reporting and how the IFRS Foundation could approach sustainability reporting, while understanding the growing calls for the urgent need for further consistency in reporting and comparable information.

To support our members working in business, CECCAR provides our members with continuous access to resources at the Romanian Business Resilience Network (businessresilience.ro) by CECCAR, a dedicated knowledge hub to support the business community to recover, reinvent itself and persevere. This resource center shares good practices identified at national and international level and provides tools and support to businesses in their business continuity efforts including economic resilience to climate change, in line with the objectives of the Paris Agreement; and a reliable flow of accurate, up-to-date, authoritative information guaranteed by professionals. CECCAR works closely with regulators to ensure the exchange of professional opinions and to be an information channel from them to the business community.

All these actions and the ones that will follow start from raising awareness that something new is in town and that professional accountants can and must get involved in. It is imperative that we, as professional accountancy organizations must be present and set the trend—that we help our members acquire the necessary knowledge to succeed in this area. We must understand how to create value by integrated thinking and how to expand our range of services with new ones, this time through sustainability reporting. This is only the beginning of a new challenge, and we are ready to face it.

 

Adriana Florina Popa

Dr. Adriana Florina Popa joined the IFAC International Panel on Accountancy Education in September 2019, nominated by the Body of Expert and Licensed Accountants of Romania (CECCAR). Dr. Popa is an Associate Professor at Bucharest University of Economic Studies with 20 years of academic and practical experience and research interests in Accounting and Taxation. She is also Coordinator of the National Institute for Initial and Continuing Professional Training (CECCAR). Dr. Popa is currently a member in the plenary of the Romanian Economic and Social Council, an advisory body of the Government and the Parliament and in the VAT Expert Group within DG TAXUD - European Commission She has master degrees in Fiscal Law, Audit and Accounting Management, Research and Teacher Education for Business and Economics and alco a diploma of pedagogical training courses in pedagogy, education psychology, didactic management, design and management of educational programs. Dr. Popa is a member of the Body of Expert and Licensed Accountants and of the Romanian Chamber of Fiscal Consultants. Her publishing activity materialized in many books and articles on financial accounting, audit and taxation. See more by Adriana Florina Popa

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Robert Aurelian Sova

Robert is the president of Corpul Expertilor Contabili si Contabililor Autorizati din Romania (The Body of Expert and Licensed Accountants of Romania, or CECCAR) and a Full Professor. See more by Robert Aurelian Sova

 
 

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