On January 13th, 30 community members gathered virtually to discuss what the merger of the International Integrated Reporting Council (IIRC) with the Sustainability Accounting Standards Board (SASB) means for the Integrated Reporting U.S. community.
Although not affected directly by the change, the merger presents an opportunity to think about what the community’s role might be in this new context. Two questions guided the discussion: 1) what does the merger mean for the integrated/multi-capital approach, and 2) what should the community do in the face of this change?
Background on the Community
Mary Adams opened the conversation with background on the IIRC-US community. This grassroots effort was launched in 2017. While not officially part of the IIRC, the IIRC has been supportive by funding costs of the community’s web platform. There are over 450 people of the US community’s mailing list, including corporate leaders, academics, investors, and nonprofit organizations. Since its establishment, the community produced 35 educational programs to shine a light on practices companies use to promote integrative thinking and multiple capitals reporting in their firms. Videos of these sessions are posted on YouTube. Another role has been to create a forum for kindred spirits to get together, learn, and share their experiences and questions about Integrated Reporting.
Impetus for the Merger
Framing the discussion were published comments from Charles Tilley, CEO of the IIRC. He described the importance of achieving a global structure for climate-related and other relevant disclosures that connect relevant societal and environmental factors to core business and capital market decisions in ways that are both rigorous and meet stakeholder demands for transparent standardized information. He views the merger as a stepping stone to bring cohesion and simplicity to the corporate reporting system.
1. In response to the first question, what does the merger mean for the integrated/multi-capital approach, key themes were:
2. In response to the second question, has the IIRC-US community outlived its usefulness? Did we do our job? Is there a role for us? What should the community do in the face of this change?
Question: Do we need to remain as a distinct group, or just be part of the processes that are going on in the new organization and other initiatives?
stronger human capital component in the new model.
o When US SEC issued their change, many companies said, "What does this mean to me? What might I report?" Look at that interim paper as a guide.
o Many of the individual SASB standards across the different industries relate to human capital. So using human capital as an aligning approach could be a good focus. At the standard-setting board level, people absolutely believe in the importance of human capital and its essential role in creating value, or destroying it if you don't do it right.
* Operating committee members include Mary Adams (Smarter-Companies), Elizabeth Castillo (Arizona State University), Lisa French (IIRC), Maureen Kline (Pirelli Tire LLC), Bob Laux (SEC Institute), Brad Monterio (CalCPA and IMA), Niki Shah (Columbia University), Paul Thompson (European Federation of Accountants and Auditors for SMEs), and Kenneth Witt (Association of Certified Professional Accountants).
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