IIRC Newsletter

Save the date! 

The International Integrated Reporting Council’s Official 2019 Conference will take place on 16-17 May 2019 in London, UK. More details to follow…

 

The IIRC team looks back at the defining moments of 2018 – and shares insights into what 2019 holds

2018 was the year when multi-capital thinking and decision-making and the embedding of integrated reporting as a principle of modern corporate governance started to come into effect.

So as we draw to the end of another successful year for innovation, drive and awareness towards making integrated reporting the global norm, the IIRC team looks back at some of the defining moments of the year.

One of the most notable achievements was the completion of the Breakthrough Phase of the strategy, and following this the launch of the Momentum Phase. In the process, we identified and articulated the drivers of the IIRC’s future success – including putting corporate governance reform at the heart of our strategy.

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New alignment project can ‘cut the clutter’ in business reporting

 

Richard Howitt, CEO, IIRC gives an insight into the thinking behind the recently announced Corporate Reporting Dialogue Better Alignment Project

Business knows it has to change to survive. The concept of ‘business as usual’ has become redundant.

It is now commonplace in business circles to hear dire warnings about how artificial intelligence will fundamentally disrupt today’s business models, how the contract between business and society is breaking down, and how climate change adaptation will strand not simply fossil fuel assets, but whole swathes of industries dependent upon them.

Of course, there is no single answer to these challenges.

But the global coalition of leaders from business, investment and regulation who came together at the start of the decade to form the International Integrated Reporting Council, did so believing it was possible to enable businesses to move to a longer-term and inter-connected approach, which would ultimately sustain the continuing role of business to create value.

The reform of business reporting to focus on the goal of long-term value creation – integrated reporting – was and is seen as a key tool to achieve this.

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Challenging, debating, energizing and learning from each other: read our report from the <IR> Business Network meeting in Paris

The IIRC’s Integrated Thinking and Strategy Group has published key insights in a new report that sets out the importance of developing integrated thinking and the next steps the group will take to help embed it internationally.

The report shares insights from the group’s latest meeting in Paris on 4-5 October 2018, when over 50 organizations came together at the Deloitte France Greenhouse. Companies shared their stories, learning from others and challenging each other to take forward this work in their organization because, as one participant said, “we cannot go back to a way of thinking that financial capital is the only capital that counts.”

The report sets out the group’s next steps towards defining an approach to integrated thinking and exploring its impacts on the strategic decision-making of the organization, as well as recommending ways in which integrated thinking can be adopted in practice.

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Directors worldwide turn to integrated reporting

Findings from the inaugural Global Director Survey 2018 indicate that integrated reporting is one of the most used reporting frameworks globally, with 15% of companies surveyed reporting that they use the International <IR> Framework, demonstrating the growth internationally in reporting on value creation.

The report confirms that there is a global trend for more holistic corporate reporting frameworks that goes beyond financial information.

Meanwhile, the findings the World Business Council for Sustainable Development’s (WBCSD) 2018 Reporting Matters report draws similar conclusions, concluding that integrated reporting has come a long way in recent years with companies now taking a more balanced approach to reporting.

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IIRC welcomes ‘Investor Agenda for Corporate ESG Reporting’

The International Integrated Reporting Council has welcomed the publication of ‘Investor Agenda for Corporate ESG Reporting’ – the result of investor collaboration to set out a clear statement on what investors need from ESG reporting.

The report states that the group of investors consider integrated reporting “to be a desirable end goal.”

The publication is the result of a lively debate at a meeting of the International Integrated Reporting Council in April 2016, during which investor bodies were called on to work together to set out a clear and persuasive statement regarding their expectations for ESG reporting.

The investor bodies worked closely with participants of the Corporate Reporting Dialogue to develop this paper, recognizing the important role of the organizations in the Dialogue to drive a unified agenda for ESG reporting.

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Nearly half of Australia’s top 200 companies adopting principles of integrated reporting

KPMG Australia has published its 5th survey of corporate reporting trends of the ASX 200. The survey has found that nearly half of Australia’s largest listed organizations are now using the principles of integrated reporting to better communicate how they create value to their shareholders and other stakeholders.

The report explores the drivers of change in Australia and focuses on the next steps organizations can take. It also illustrates examples of good practice in corporate reporting which are emerging in Australia.

Key findings of the report:

  • 48% of organizations surveyed focused their reporting on value creation for shareholders and/ or other stakeholders and not just historic financial earnings, an increase from 25% in 2017.
  • ASX Corporate Governance Council’s revised Corporate Governance Principles & Recommendations (draft 4th Edition) include a proposed corporate reporting recommendation focusing the Board’s attention on the rigour of the processes underpinning what is reported in corporate reports.
  • There is a continued shift by listed and non-listed Australian organizations towards using the principles of integrated reporting. Some of Australia’s largest organizations including Qantas, Brambles, AGL, ANZ, Stockland, NAB, GPT and Lendlease are  referencing the principles of integrated reporting in their annual reporting portfolio.
  • Examples of innovative reporting are emerging, including how technology can be used to help drive the connectivity of information.

 

Using integrated reporting to demonstrate contribution to the Sustainable Development Goals

Richard Howitt, CEO, IIRC opened the 35th session of the Intergovernmental Working Group of Experts on International Standards of Accounting and Reporting (ISAR) saying:

“The clock is ticking on achieving the SDGs.

“Today, we have just 4,086 days to achieve the SDGs. This is only a little over the time it took Leo Tolstoy to write the 1,300 pages of ‘War and Peace’.

“For integrated business reporting of the SDGs, we cannot afford to spend the next twelve years writing another ‘War and Peace’. Instead, let’s write a better world.”

In his speech, Richard Howitt outlined the global progress of integrated reporting, the launch of the new ‘Momentum Phase’ in the IIRC’s strategy towards its global adoption and highlighted how the alignment of different reporting standards is key to genuine integrated reporting.

The full text of the speech is available on UNCTAD’s website.

 

Africa Integrated Reporting Conference drives regional uptake of integrated reporting

The conference, held on 9 October 2018, attracted over 100 delegates from 13 countries across the continent.

Presenting, Professor Judge Mervn King, Chair Emeritus, IIRC said: “It is in the interest of our continent that African countries start implementing integrated reporting as it is the future of reporting and the accountancy profession. Besides, enabling the organizations to provide a fuller and better picture of its ability to create value over the long term, it will result to auditors not only auditing 20% of organizations value (financial), but also the other 80% (intangibles) which is critical.”

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Greater focus on value creation in the Netherlands

Eumedion, the investor-led corporate governance reform body, has published its annual letter to Dutch listed companies reinforcing the call for reporting on value creation – a key concept of integrated reporting.

It follows the newly revised Dutch corporate governance code which places greater emphasis on long-term value creation for the company. The code requests the board to incorporate in the management report a more detailed explanation of its view on long-term value creation and the strategy for its realization.

Eumedion encourages companies to, “take notice” of the leaders in reporting on value creation, highlighting the reports of Randstad and Royal Philips. Both organizations use the International <IR> Framework to inform their reporting.

The letter offers a ‘check list’ for integrated report preparers to consider, providing practical questions that they can consider during their processes.