Abstract

The domain of sustainability reporting has seen a substantial proliferation in recent years. Many standards, guidelines, and voluntary regulatory mechanisms have emerged, yet a specific IFRS on sustainability doesn’t exist. This paper provides a critical analysis of desirability for the institutionalization of sustainability reporting in a form of IFRS standard. First, I discuss strengths and weaknesses of IFRS and their adoption. Next, I delineate the complex multi-dimensional nature of accounting harmonization and specifically highlight the existing barriers to the successful advancement of this process. I provide a justification why a complete convergence of national accounting standards is unlikely and even undesirable, given the diversity of cultures, enforcement mechanisms, tax and legal systems around the world. In the final section I review the concept of sustainability in its breadth and depth, and analyze how the usage of analogy to financial reporting may impose constraints on the scope of sustainability development goals. By contrast to financial reporting, sustainability reporting is addressed to a much wider group of stakeholders whose engagement is crucial for meaningful sustainable development goals. The paradigm of the IFRS does not render possible embracingthis wider scope, therefore, their applicability for the purposes of sustainability reporting is limited.

This work is licensed under a Creative Commons Attribution 4.0 License.