In an increasingly complex world of sustainability reporting and financial disclosures, this paper unveils the challenges and risks of excluding or misstating relevant or material information in financial accounts or sustainability reports. Using a poignant case of relocating graves from mines in South Africa, these challenges and risks are researched and discussed. As companies grapple with transparency, cultural nuances, and social debts, the urgency for clear guidelines becomes apparent. Will these revelations reshape reporting practices and safeguard both investors and communities? 

This paper builds on the Coalition’s series on financial and sustainability reporting, particularly focusing on the challenges identified in prior papers. It extends the discourse initiated by “Towards a Conceptual Framework for Sustainability Reporting” and “Disclosing Impact on Natural, Social and Human Capital in Financial Statements.” This series underscores that the standards for financial disclosures require revision alongside non-financial reporting improvements.

This latest paper, Accounting for Impact: Financial and sustainability reporting of relocating graves in South Africa, is of interest to those compiling financial disclosures or sustainability reports, for internal and external assurance, where impact on social capital goes beyond the labour force and considers an organisation impacts and dependencies on the communities in which they operate and the broader society. 

Key Discussion Points: 

• The paper explores how companies navigate presenting sustainability information alongside financial details, especially with the evolving landscape of sustainability reporting standards. The overlap between the International Financial Reporting Standards (IFRS) and the International Sustainability Standards Board (ISSB) reporting standards are examined within this context. 
• A focal point is the financial disclosures related to grave relocations and their social impacts in the mining sector. However, grave relocations are contextualized as more than a financial concern; they symbolize historical grievances and social debts, potentially increasing risks to mining companies and their social license to operate. 
• For assurance, the assessment of the risk of material misstatement is at the level of the account balance (the profit and loss account or the balance sheet). So, the value that has been recognized is likely lower than the value that would make the omission material to financial decisions but not to sustainability decisions, i.e., if the cost of the impact of relocating a grave were valued based on changes to wellbeing (sustainability-related financial information), it is more likely to be material to investors. 
• The discussion underscores what should be disclosed in reports, weighing economic phenomena against sustainability impacts. It sheds light on power imbalances during stakeholder engagements, where personal gains may compromise community well-being, cultural heritage, and investor relations. The challenge lies in determining essential information for financial and sustainability reports, balancing their distinct focuses, and considering their implications on investors and society.