Thanks to all who participated in our program last week. Here’s some background on the discussion and links to the IFRS Consultation of Agenda Priorities that will directly affect the path forward for our movement.
We opened by discussing the IFRS Integrated Thinking and Reporting Conference in Frankfurt and June. There were roughly one hundred people at this truly global conference. Our community was represented by Mary Adams and Alex Gold at the conference and a smaller meeting with leaders of IT-IR communities around the world. This webpage has the full videos of the programs. It was clear from the participation that there is a rich community of Integrated Thinking and Integrated Reporting (IT-IR) practitioners around the world with special concentrations in Europe, Japan and South Africa.
Integrated Thinking and Reporting in the New IFRS Standards
Leaders in Frankfurt repeatedly stated that the IFRS S1 and S2 sustainability standards issued shortly after the conference would incorporate the concepts of Integrated Thinking Principles and the Integrated Reporting Framework. For reference, these standards address sustainability on two levels:
IFRS S1 provides a set of disclosure requirements designed to enable companies to communicate to investors about the sustainability-related risks and opportunities they face over the short, medium and long term. IFRS S2 sets out specific climate-related disclosures and is designed to be used with IFRS S1. Read more
Future of IT-IR Stand-Alone Guidance is Unclear
However, it was not clear from the conference whether the Integrated Reporting Framework and the Integrated Thinking Principles have a future as standalone guidance. The IFRS has issued an RFI which asks for feedback on the proper research priorities in the coming two year. The choice is to go deeper on specific environmental and social issues or, instead, “explore how to integrate information in financial reporting beyond the requirements related to connected information in IFRS S1 and IFRS S2.”
We discussed the RFI in our community meeting last week. Here are the slides from that discussion prepared by Alex Gold. The discussion brought out the fact that there is a lot of tension globally between the need to solidify comprehensive standards and the more conceptual work of IT-IR. And since the U.S. is less apt to adopt S1, IT-IR could get lost in the shuffle.
The discussion slides highlight the key questions related to IT-IR are numbers 1,3 and 8. The message from Frankfurt was clear: the number of replies will matter. We are recommending individual responses by as many of our community members as possible. Here are key links to help you in your reply:
We hope that you will take a few minutes to reply to the RFI.
The Way Forward
Regardless of the outcome of this RFI, it is clear that our community needs to find a way to ensure the message of IT-IR continues to be shared and spread in the U.S. We welcome your continued input and support as we define and forge a new way forward.