Investors need material information on a broad range of value drivers
Two reports published this month are yet further evidence of a shift in investment practices, as investors increasingly take more than just financial information into account when making investment decisions, confirming that investors overwhelmingly agree with the thinking set out by Larry Fink, CEO, BlackRock in his annual letter calling on businesses to set out their long term strategy for value creation.
The International Integrated Reporting Council has welcomed the publication of EY’s report ‘Is your nonfinancial performance revealing the true value of your business to investors?’ as yet another piece of compelling research which demonstrates unequivocally that investors are looking to businesses to communicate their broad story of value creation, beyond the purely financial.
Similarly, the paper ‘The Investing Enlightenment: How Principle and Pragmatism Can Create Sustainable Value through ESG‘ published by State Street, demonstrates that investors need material information on a broad range of value drivers. The author of the report, Bob Eccles, has written a blog for the IIRC in which he states “The results were very interesting and strongly support the importance of Integrated Reporting.” Continuing, “Every company faces a vast range of ESG issues of concern to many stakeholders. Not all of these are of interest to investors. They are interested in the material ones as defined by the International <IR> Framework.”
International Accounting Standards Board looking at the role of wider reporting
The International Accounting Standards Board (IASB) as part of its ‘better communication’ work is studying and consulting on wider corporate reporting, including developments in Integrated Reporting, as it considers the role the IASB may take going forward. One possibility is that the IASB might consider a project to revise and update its existing Practice Statement Management Commentary.
The IASB is responding to a clear call from businesses worldwide that we need more cohesion in corporate reporting and the IIRC views these recent announcements as an important contribution to the continuing global dialogue on the corporate reporting system, which the IASB is spearheading worldwide.
Take up of Integrated Reporting builds in Turkey
In response to growing interest in Integrated Reporting in Turkey, a regional <IR> Network has been launched at an event at the Istanbul Stock Exchange. The Network has been established by a group of influential Turkish institutions who believe in the importance of introducing integrated thinking and reporting to the Turkish market. These include Borsa Istanbul, the Turkish Industry and Business Association, SKD Turkey, Argüden Governance Academy, Global Compact Turkey, Garanti Bank and Çimsa.