Impact case: Bridging the gap between science and practice in corporate reporting

Substantive developments and shifting priorities have led to significant changes in corporate reporting regulations in recent years. Dr. Ferdy van Beest, Associate Professor of Corporate Reporting at Nyenrode Business University and Director of Sustainability at Flynth adviseurs en accountants (Flynth Dutch auditors and consultants), emphasizes that stakeholders must make substantial efforts in order to keep up with changing regulations. Van Beest sees a large knowledge gap between scientific research and practical applications in corporate reporting. It is his mission to bridge this gap.

Van Beest combines scientific information with practical experience and allows both areas to influence and inspire each other. With this method, he provides both students and stakeholders from the field with information about impact, applications, effects and limitations in the field. He adjusts his focus areas when new key objectives within corporate reporting arise. This Impact Case focuses on external and sustainability reporting.

“Regulations for sustainability reporting were initially quite generic. But because the objectives determined within the Green Deal - the EU initiative to make Europe climate neutral by 2050 - would not be achieved on time, stricter sustainability reporting rules were introduced in a short timeframe. This forces companies to take steps in the field of sustainability, which has far-reaching consequences,” says Van Beest. As of 2024, quoted companies are required to report in accordance with the European Sustainability Reporting Standards (ESRS). According to Van Beest, many companies and auditors are not yet sufficiently familiar with most sustainability themes and will have to familiarize themselves with them. “At the same time, knowledge about this subject has become essential at universities and universities of applied sciences, ensuring that the next generation is well prepared.”

Van Beest also conducts research in the field of external reporting. He calls this complex matter of which stakeholders need more understanding. With presentations, articles and his roles in various bodies, Van Beest makes the complex matter of both external and sustainability reporting more accessible to a wide audience. For example, Van Beest has written about the impact of the COVID crisis on the lending capacity of banks worldwide and warned about the consequences of new accounting rules imposed by the International Accounting Standards Board (IASB). In addition, he advocated “fairer valuation of business combinations, and, at the same time, improved awareness of the limitations that IASB designs can entail” (e.g. profit management). He previously used scientific fraud models as input at the AFM.

Van Beest also advises the Dutch Accounting Standards Board (Raad voor de Jaarverslaggeving) and other decision makers, such as the NBA, preparers and auditors. It is also interesting to note that at Flynth advisors and auditors, Ferdy and his coworkers developed a mathematical model for assessing the double materiality. This mathematical approach was considered and embedded by the NBA when drafting their “Stappenplan dubbele materialiteit”. A nice combination of scientific knowledge and practical application. 

The book Duurzaamheidsverslaggeving (Sustainability Reporting), on which Van Beest is currently working with Prof. Dr. Ruud Vergoossen, covers the three main elements: the legal and regulatory framework, the ESRS thematic categories and the practical application of sustainability reporting. The book is intended for students from economics, business administration and law faculties, and for professionals in annual reporting, such as directors, corporate lawyers, controllers, administrators and auditors. Several universities of applied sciences are showing interest in including the book in their curricula. Professional institutes, such as Markus Verbeek and Euroforum, also intend to use the book in their professional ESG courses. From May 1, Ferdy van Beest will start as Director of Sustainability & Reporting at Crop accountants & adviseurs (Crop consultants & auditors).