EFRAG has published a Discussion Paper on different possible approaches for better information on intangibles. EFRAG is asking constituents whether preparers can provide better information on intangibles, and if so, how. Comments are welcome by 30 June 2022. Read more here.
Professional accountants have an active role to play in determining the way climate change information is reported in the upcoming 2021 reporting cycle and is enhanced in future years. In a new statement released today, IFAC continues to advocate and support the profession’s role in enabling climate action by providing transparency and insights on the financial impacts of climate change.
In this statement, IFAC:
· Summarizes the information concerns of investors, regulators, and policy makers.
· Reviews current standard-setter responses.
· Recommends how, and the extent to which, companies and accountants can address these concerns in the 2021 reporting cycle.
Read the statement.
As an increasing number of businesses around the world implement integrated reporting as a route to long-term value creation and sustainable development, the demand for assurance services on such reports is expected to rise accordingly.
To help meet this demand, and to increase confidence in integrated reporting, the International Federation of Accountants (IFAC) and the International Integrated Reporting Council (IIRC) today are launching a new joint initiative, Accelerating Integrated Reporting Assurance in the Public Interest.
The initiative, which will be rolled out in installments, is designed to heighten awareness of key issues, drive constructive conversation with and among key stakeholders, and encourage providers and users of assurance services in particular to lend their voices to the effort.
Find out more and read the first installment here: https://bit.ly/2NA6CYY
In this podcast Accountancy Europe speak to Vic Petri, CEO and Founder of Performance Innovations and former Partner at PwC, to learn about how to maintain motivation and drive. He was a global lead on human capital, focused on resolving mental health issues to guide teams to better performance and a healthier work environment. He discusses how to face mental health issues during an ongoing worldwide pandemic and also how the accountancy profession must embrace change to be ready for the future. He urges a fundamental shift in the leadership paradigm, where the leader serves the team, not the other way around.
This article provides a comprehensive summary of the status and prospects for sustainabillity reporting in the EU: https://www.allianceforcorporatetransparency.org/news/countdown-reform.html
In the latter part of February we expect to see the final report from EFRAG to the European Commission setting out recommendations on possible EU non-financial reporting standards in a revised Non-Financial Reporting Directive. Read more here: https://www.efrag.org/About/Governance/44/European-Lab-PTF-on-preparatory-work-for-the-elaboration-of-possible-EU-non-financial-reporting-standards--PTF-NFRS#:~:text=European%20Lab%20PTF%2DNFRS%20Chairman&text=He%20became%20President%20of%20Mazars,President%20of%20the%20Mazars%20Group
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).
Thanks to all who participated in our session on June 24 to provide feedback to the revision process for the Framework. The final report from our meeting is available here:
U.S. Community Framework Feedback Summary.pdf
In case you want to delve further, here are the background materials provided for the meeting:
You can do so here before August 19:
On 24 June A Plus magazine published this article The Storyteller summarizing an interview with the IIRC's CEO Charles Tilley: https://aplusmag.goodbarber.app/topics/c/0/i/47516021/storyteller
This feedback analysis paper by Accountancy Europe follows up on the Cogito* project Interconnected standard setting for corporate reporting (December 2019). 41 leading European and global organisations responded to the call for feedback. This follow-up paper:
o analyses the feedback received in writing and through events
o provides an update on the latest EU and global developments
o reflects on a way forward on the NFI standard setting agenda
Various key takeaways are drawn from the 41 comment letters received. Read more here.
IFAC continues to speak out on behalf of the global accounting profession on the topic of non-financial reporting, most recently in response to the European Commission’s review of the Non-Financial Reporting Directive (NFRD). This review marks another valuable step in the dialogue and evolution toward relevant, reliable, and comparable reporting of non-financial information. A summary of IFAC’s response is available on its website. IFAC 's response reiterated points it made in early June in its summary of its feedback on the World Economic Forum (WEF) consultation “Toward Common Metrics and Consistent Reporting of Sustainable Value Creation.”
Read EFAA position statement on Non-Financial Reporting by SMEs here and their response to the NFRD public consultation here. EFAA urges NFR by SMEs to remain voluntary and welcomes the development of a simplified standard for NFR by SMEs.
Subscribe to our channel