Sustainability reporting in pandemics: Theoretical development of guidelines for improved reporting

Figures & data

Table 1. Company sample

Industry name	Number of companies within the top 40	Sample selected by researchers
Additional	0	1
Oil and Gas	0	2
Basic Materials	15	15
Industrials	1	2
Consumer Goods	3	3
Health Care	1	2
Consumer Services	4	4
Telecommunication	2	2
Utilities	0	0
Financials	12	12
Technology	2	2
Total number of companies	40	45

Source: personal communication, JSE, 2020; personal communication, JSE, 2021.

Figure 1. Pandemics affect the sustainability of companies and these effects result in certain responses by companies.

Source: Own research

Table 2. Overarching disclosure requirement

Overarching disclosure requirement:
A company should describe current and future pandemics’ effects on the company’s sustainability, including its responses thereto.

Source: Own research.

Figure 2. Conceptual framework for reporting guidelines to inform stakeholders of companies’ sustainability regarding pandemics.

Source: Own research

Table 3. Disclosure guideline 1

Disclosure guideline 1:
In describing the company’s responses to a current and future pandemic, a company should disclose its disaster risk management strategies in the four phases: prevention or mitigation, preparedness, responses and recovery.

Source: Own research.

Table 4. Disclosure guideline 2

Disclosure guideline 2:
In describing the effects of current and future pandemics on a company’s sustainability, it should be considered that pandemics affect all four components of sustainability: financial, ESG.

Source: Own research.

Table 5. Disclosure guideline 3

Disclosure guideline 3:
In describing the effects of current and future pandemics on a company’s sustainability, it should be considered that pandemics’ effects comprise the effects of the pandemic itself, as well as the effects of government-imposed interventions.

Source: Own research.

Table 6. Disclosure guideline 4

Disclosure guideline 4:
In describing the effects of current and future pandemics on a company’s sustainability, it should be considered that pandemics affect a company’s sustainability in the short, medium and long term.

Source: Own research.

Table 7. Disclosure guideline 5

Disclosure guideline 5:
In describing the effects of current and future pandemics on a company’s sustainability, it should be considered that pandemics’ effects on a company’s sustainability can be negative, positive or neutral. In describing the company’s responses thereto, a description of how a company mitigates negative effects, capitalises on positive effects and implements neutral changes, should be included.

Source: Own research.

Table 8. Disclosure guideline 6

Disclosure guideline 6:
In describing the effects of current and future pandemics on a company’s sustainability, it should be considered that pandemics are to be expected, yet unique, and increase a company’s risk exposure in the presence and in the absence of pandemics. A company should, therefore, disclose how its risk exposure has been affected and the related risk mitigation strategies implemented by the company.
Pandemic effects	Company responses
E6.1 In the presence of pandemics describe the introduced/increased risks to the company’s operations because of the pandemic, with specific consideration of: E6.1.1 strategic risk; E6.1.2 liquidity and credit risk; E6.1.3 legal risk; E6.1.4 reputational risk; E6.1.5 fraud risk; E6.1.6 cyber risk; E6.1.7 health and safety risk; and E6.1.8 retention and attraction risk.	R6.1 Describe the risk mitigation strategies implemented to mitigate the relevant risks. In describing the company’s risk mitigation strategies, including reference to disaster management and the strategies implemented to: R6.1.1 prepare staff for the necessary changes required as part of risk mitigation; R6.1.2 adjust the company’s information system to keep all employees updated with the latest changes. Describe the actions taken with respect to the speed, availability and accuracy of information to allow for relevant and swift decision-making by the board and management; and R6.1.3 adapt the format and frequency of management/board and shareholder meetings.
E6.2 In the presence of pandemics, describe how the pandemic affects: E6.2.1 the company’s assessment of its ability to continue as a going concern; and E6.2.2 asset values through provisions and impairments.	R6.2 Describe how the company incorporated the pandemic’s uncertainties into its assessment of: R6.2.1 the company’s going concern ability; and R6.2.2 the company’s asset values through provisions and impairments.
E6.2 and R6.2 should have been covered in the financial statements through International Accounting Standards 1 and 36 and, therefore, it could be merely referenced.
E6.3 In the absence of pandemics describe the company’s risk exposure should a pandemic realise, with specific consideration to the risks in E6.1.	R6.3 Describe the risk mitigation strategies that are in place to mitigate the relevant risks, including the company’s disaster management plans.

Source: Own research.

Table 9. Disclosure guideline 7

Disclosure guideline 7:
A company should disclose how current pandemics affect its operating environment and the related responses implemented by the company to address this.
Pandemic effects	Company responses
E7.1 Describe any legal or regulatory changes that are affected by the pandemic, which are applicable to the company, along with the implications on operations.	R7.1 Describe the company’s legal or regulatory changes and the strategies implemented to ensure operational effectiveness amidst these.
E7.2 Describe the stakeholder groups affected by the pandemic and the ultimate effect that this may have on the company. This may include: E7.2.1 how the company’s customers’/clients’ behaviour changed, along with changes in customer/client demand, composition and base; and E7.2.2 how the needs of the community in which the company operates changed, including socio-economic concerns.	R7.2 Describe the social responses implemented by the company, including: R7.2.1 how the company adopted existing or introduced new commodities and the method of delivering them to meet customer/client demands; and R7.2.2 how the company continued stakeholder engagement, specifically increasing communication and support.
E7.3 Describe the trends brought about or accelerated by the pandemic and how this affects the company’s operating environment, including changes in respect of competitors.	R7.3 Describe how the company utilised the trends in continuing or improving its operations, including its social responses.

Source: Own research.

Table 10. Disclosure guideline 8

Disclosure guideline 8:
A company should disclose how current pandemics affect its input and the related responses implemented by the company to address this.
Pandemic effects	Company responses
E8.1 Describe the pandemic’s effect on the availability and pricing of input, including raw material and labour.	R8.1 Describe the strategies implemented to address the availability and pricing of input, including: R8.1.1 sourcing material from alternative suppliers; R8.1.2 digitising labour; R8.1.3 adapting operations to enable the continuing thereof given the shortage of material and/or labour; and R8.1.4 strategies implemented to deal with the pricing of material and/or labour, including agreements entered, resource reallocation and adapting selling prices.

Source: Own research.

Table 11. Disclosure guideline 9

Disclosure guideline 9:
A company should disclose how current pandemics affect its operations and the related responses implemented by the company to address this.
Pandemic effects	Company responses
E9.1 Describe the pandemic’s effect on the company’s core operations with reference to its normal capacity, with specific inclusion of:	R9.1 Describe the strategies implemented to address the effects on the company’s operations, including a description of the strategies implemented to:
E9.1.1 employee productivity; and	R9.1.1 manage employee well-being; and
E9.1.2 operations that were restricted/delayed/suspended.	R9.1.2 reorganise core operations to allow continuance amidst restrictions.
E9.2 Describe the supportive operations (i.e., training, stakeholder engagement initiatives) that were restricted/delayed/suspended by the effects of the pandemic.	R9.2 Describe the strategies implemented to reorganise supportive operations to allow continuance amidst restrictions.
E9.3 Describe the vulnerabilities that were revealed by the circumstances created by the pandemic.	R9.3 Describe the strategies implemented to mitigate the revealed vulnerabilities.
E9.4 Describe the opportunities that were brought about by the circumstances created by the pandemic, with specific consideration of improvement in: E9.4.1 core operations; E9.4.2 supportive operations; and E9.4.3 stakeholder initiatives.	R9.4 Describe the strategies implemented to capitalise on the opportunities.

Source: Own research.

Table 12. Disclosure guideline 10

Disclosure guideline 10:
A company should disclose how current pandemics affect its output and the related responses implemented by the company to address this.
Pandemic effects	Company responses
E10.1 Describe the pandemic’s effect on the company’s output, specifically including output quantity, quality and pricing.	R10.1 Describe the strategies implemented to continually address the pandemic’s effects on the company’s output.

Source: Own research.

Data availability statement

The data that support the findings of this study are openly available in the public domain and details are provided in the references.