Is a New Global Authority for Integrated Reporting the Solution for CSR?
|August 3rd, 2010||
|Contributed by: CRD Analytics|
|A major announcement was made yesterday that could just be what the world was waiting for, a new single global authority was formed, the International Integrated Reporting Committee (IIRC), its mission is to create a universally and globally recognized framework for Integrated Reporting. This is a still relatively new movement towards the production of a single annual report that fully incorporates financial and non-financial information and its impact on the company's stakeholders.|
Why is this Important?
The IIRC brings together a virtual who's who in the world of not just sustainability but also corporate accounting, securities, regulation, non-government offices and standard setters. One just has to take a look at the names of the people involved and the enterprises that have volunteered to be part of the Steering Committee and a Working Group and you will quickly recognize them as the change agents of our times. These are the people that "Get Things Done." So with a little foresight, one can imagine what impact this will have on all of our professional and personal lives if you fast forward 10 years. Look at what GAAP, or IFRS has done for standardization, what GRI, PRI and UNCTAD have done to raise awareness, promote transparency, and excite companies enough to voluntary disclose and report on dozens of unregulated environmental, social and governance (ESG) metrics.
The Steering Committee will be chaired by Sir Michael Peat, Principal Private Secretary to TRH The Prince of Wales, with Professor Mervyn King, Chairman, King Committee on Corporate Governance and Chairman, Global Reporting Initiative, as Deputy Chairman. The Working Group has co-chairmen: Paul Druckman, A4S Executive Board Chairman, and Ian Ball, Chief Executive Officer, International Federation of Accountants.
The regulatory bodies that are involved like FASB, IASB, along with the regional and international institutes of chartered accountants and the big four accounting and audit firms such as PricewaterhouseCoopers, Deloitte, KPMG, and Ernst & Young should add equal comfort that this is a major global initiative that is designed to succeed. There's no telling how long it will take but the sheer brainpower, experience, conviction and successful track records of the people and enterprises involved is a recipe for an outcome of historical and landmark proportions or a stall mate to rival the congressional filibusters of yesteryears when they actually stood up at the podium and read the DC phonebook.
Robert Eccles, Professor of Management Practice, Harvard Business School along with Michael Krzus, a partner at Grant Thornton recently published an excellent book on this subject, One Report: Integrated Reporting for a Sustainable Strategy, where they "argue that financial and nonfinancial reporting should be combined and should show the relationships between different categories of performance." They also call for companies to leverage web-based publishing to make the reports more concise and to actively engage with all stakeholders on a real-time basis.
Here is a short list of some of the companies that are already publishing an integrated report:
Southwest Airlines, United Technologies, American Electric Power, Philips, Novo Nordisk (pdf), Natura (pdf).