This article covered a speech by Jan Herringer, partner at BDO USA and president of the New York State Society of CPAs at a meeting of the Accountants Club of America.  In her remarks, she encouraged her colleagues to learn about integrated reporting:

The profession is mobilizing to meet the challenges of the 21^st century, to close the link between value creation and the ability of an entity to sustain operations into the future … As the conscience of the profession, learn more about integrated reporting, discuss [it], and provide opportunities for our clients to understand the impact.”

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The Corporate Reporting Dialogue, which includes the IIRC, SASB, GRI, and the Carbon Disclosure Project, have announced plans to align their standards and frameworks within two years at the World Congress of Accountants in Sydney, Australia.

The article explains the goal of the project:

Under the new project, the various participants plan to map out their own sustainability standards and frameworks to identify the common traits and differences, while jointly refining and continuously enhancing the overlapping disclosures and data points to achieve better alignment. They will be taking into account the various focuses, audiences and governance procedures of the different organizations. Participants will identify how non-financial metrics relate to financial outcomes and how this can be integrated in mainstream reports.

More information about the project can be found on the Corporate Reporting Dialogue website. 

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Richard Barker and Bob Eccles at Said Business School of Oxford University have published a briefing paper as a prelude to a debate on December 11:

The goal of this ‘Green Paper’ is to contribute, in a neutral way, to a conversation that has been going on for some time amongst a variety of actors, concerning whether mandatory reporting standards are a prerequisite for effective ‘sustainability’ or ‘nonfinancial’ corporate reporting. Specifically, we ask whether the existing standard-setting regime for financial reporting – that of the US Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) – should be extended to include setting standards for nonfinancial information. Our work was informed by interviews we did with 50 experts in this field. We are grateful to them for taking the time to share their views with us.”

The members of the debate teams are as follows, and further details are available on this link.

• Chair: Lady Lynn de Rothschild
  
• In Proposition: Paul Druckman, Ian Mackintosh, Sir Callum McCarthy, Anne Simpson
  
• In Opposition: Jonathan Bailey, Bob Herz, Harvey Pitt, Tom Quaadman
  

This debate is free and open to the public. You can register to attend on this link.

Read the paper: Should FASB and IASB be responsible for setting standards for nonfinancial information?

The IIRC announced that  Dominic Barton appointed as Chair of International Integrated Reporting Council, as new strategic phase is launched. Barton was the Global Managing Partner from 2009 to 2018 at McKinsey & Company. He shared:

“I believe that through the adoption of integrated reporting internationally we can make real changes to the way businesses and our markets as a whole function. We can ensure that business is working for society, for the planet and for all stakeholders. That is why the first decision I made when stepping down from the global managing partner role at McKinsey was to join the IIRC as its Council Chair and I look forward to working with the team, as we launch this new momentum phase.”

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Triple Pundit reported on a meeting held in late September at the US Aligning the SDGs with Integrated Reporting. IIRC President Richard Howitt explained how the SDG's can be integrated with other forms of reporting and commented on key indicators of progress in the integrated movement:

1. Release of the official position paper from the International Federation of Accountants (IFAC) that integrated reporting is “the future of corporate reporting” – no qualification, no conditions
   
2. Decision of the International Accounting Standards Board to Review its guidelines for the narrative part of the company report, partly to address integrated reporting
   
3. The recommendations of the High Level Expert Group on Sustainable Finance which called integrated reporting “the ultimate ambition,”
   
4. The financial standard-setters and the sustainability frameworks – SASB, CDP, the GRI and CDSB – which combine together in the “Corporate Reporting Dialogue” convened by the IIRC, agreed a joint position statement in favor of the TCFD recommendations

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The CPA Journal published a summary of a panel discussion Current Developments in the Private Sector featuring Bob Laux, U.S. Lead for the International Integrated Reporting Council. Bob outlined the basic perspective of the integrated movement and shared:

“I believe, and I could be wrong, that there’s a real movement, especially from chief executive officers at large U.S. companies, to change the conversation—to focus capital on the long term.” Integrated reporting, Laux said, “fits perfectly where CEOs and companies want to manage on a long-term basis and get out of this quarterly treadmill that has been so destructive to our long-term value creation.”

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This Sustainable Brands article The Corporate Reporting Dialogue (CRD) Is Looking for Alignment, Not for One Common Framework provides a great overview of the challenges of today's environment where there are many frameworks and systems that push beyond traditional financial reporting. Excerpts:

 All frameworks share the same purpose despite their differences: to facilitate better decision-making and long-term value creation – financial or “non-financial” – through transparency. The CRD is determined to better communicate how frameworks actually work together, identify overlaps, harmonize common reporting criteria like materiality, and align with SDGs as common founding principles. To this end, the CRD provides an online Landscape Map that shows how the frameworks are aligned and complement each other. Its members also published a Statement of Common Principles of Materiality, which guides companies on how materiality is similar between the participating frameworks.

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This paper surveys the non-financial reporting landscape of Australia using data and insights from the Reporting Exchange. With WBCSD’s Global Network Partner, Sustainable Business Australia (SBA), we explore the challenges and opportunities for corporate reporting in the country, drawing on international best practice to provide suggested steps to ensure Australia is a global leader in sustainable finance.

Link to WBCSD report >>

Willow Aliento |  10 July 2018

The glossy sustainability report with its pretty pictures of trees seedlings could become a thing of the past, as leading companies increasingly incorporate environmental, social and governance matters into mainstream annual reporting.

Sustainable Business Australia chief executive Andrew Petersen said this is because it is increasingly recognised that financial risks are “usually a consequence of non-financial risks.”

A recent example is the scandal engulfing the Commonwealth Bank, where “hubris” resulted in clear financial consequences for the bank, Petersen told The Fifth Estate.

Worldwide, in 2017 34 per cent of World Business Council for Sustainable Development members produced integrated reporting in 2017, up from 28 per cent in 2016.

Climate change is seen as something that can have an impact on the financial balance sheet. It is being seen as a material issue, not a political one, and there is an “interconnectivity” being recognised.  More>>