What does 'going concern' refer to in sustainability reporting?

'Going concern' refers to the assumption that a company will continue its operations for the foreseeable future without the intention or necessity of liquidating or significantly curtailing its activities. In the context of sustainability reporting, this concept is crucial as it underlines the importance of long-term viability and sustainability in business practices. Companies that are assessed on their going concern status are expected to demonstrate that they can sustain their operations, which includes managing resources and risks in a way that is environmentally and socially responsible.

This ongoing operational capacity is essential for sustainability reporting since it influences how businesses plan for future environmental impacts and resource usage. If a company is not considered a going concern, its sustainability strategies and commitments might not be relevant because the company may not exist in the future to implement them.

The other options focus on aspects such as future profitability estimates, which do not directly address the operational longevity aspect inherent in going concern, historical performance assessments, which are retrospective, and auditor evaluations, which pertain to the validity and transparency of financial statements rather than the operational continuity of the business itself. These aspects, while important, do not encapsulate the core principle of 'going concern' in sustainability reporting.