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>>

The truths and myths of sustainability- & non-financial reporting

by Adrian Braun

Do you need non-financial reporting in a business? What does it even mean, non-financial reporting? Is managing a business not complicated enough with accounting, taxation, banking, annual reports and shareholder announcements? Now, diverse people with different positions and backgrounds claim that you need a sustainability report, highlighting your efforts and performances in non-monetary perspectives. Ok fair enough, sustainability is good, it is popular, it is on agendas of governments, and it is protecting the environment. However, is it not rather something for the big global players in business, the big polluters and the companies that have the pocket money to invest into these efforts outside the core business?

I would like to clear up two common prejudices of sustainability strategies in businesses… more>>

Powerful findings that encourage the long-term thinking advocated by the integrated reporting movement. Here's the abstract of this paper by Jarrad Harford of University of Washington, Ambrus Kecskes of York University - Schulich School of Business, and Sattar Mansi of Virginia Tech:

We study the effect of investor horizons on a comprehensive set of corporate decisions. We argue that monitoring by long-term investors generates decision making that maximizes shareholder value. We find that long-term investors strengthen governance and restrain managerial misbehaviors such as earnings management and financial fraud. They discourage a range of investment and financing activities but encourage payouts. Innovation increases, in quantity and quality. Shareholders benefit through higher profitability that the stock market does not fully anticipate, and lower risk.

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Last week, the European Accounting Association held its 41st Annual Congress in Milan.  I spoke on a panel on Integrated Reporting (see link and Symposium 2: http://www.eaacongress.org/r/symposia) with Mary Barth of Stanford University, and Richard Barker of Oxford University - we focused on the issues of the usefulness of information, including data quality and reliability within integrated reports.