Seeing double corporate reporting through the materiality lenses of both investors and nature*

Standards for financial accounting (set by the IASB) are complemented by those for sustainability-related financial disclosure (set by the ISSB). Both sets of standards contribute distinctive components to financial reporting, aiming to meet the information needs of investors. Yet the stakeholders in a corporation extend beyond investors, suggesting a demand for information broader than that provided by IFRS alone. This paper comprises a normative analysis of how that demand can be met, to which end we focus on the environmental impact of corporate activity. We argue that, in both the research literature and in market practice, the reporting of environmental externalities lacks the distinction between accounting and disclosure that characterises financial reporting. In particular, while disclosures of impacts are widespread, there is absence of an "externality accounting" that would parallel the income statement. We argue that the basis of such accounting should be the maintenance of natural capital, with measurement at replacement cost, and that (in this way) externalities can be made commensurate with financial profit to yield a "full-cost" income statement, yet this can be done while serving the ecological/societal demand for treating the conservation of natural resources as an end in itself. We argue that criticism in the research literature of investor-oriented sustainability reporting is misdirected. Instead of asking why investor-oriented reporting "fails" to meet the broader informational needs of all stakeholders, the more important question is why reporting for the benefit of those stakeholders remains under-developed, in theory and in practice.