In early August the Prince of Wales' Accounting for Sustainability Project (A4S) and the Global Reporting Initiative (GRI) announced the formation of the International Integrated Reporting Committee (IIRC). The IIRC's remit is to create a globally accepted framework for accounting for sustainability.
This framework aims to bring together financial, environmental, social and governance information in an 'integrated' format. It is envisaged that this would then result in an organisation providing better and more meaningful information about its performance. More comprehensive information about an organisation's total performance looking at prospective as well as retrospective information will meet the needs of the emerging, more sustainable, global economic model. The formation of the IIRC will put integrated business reporting on the international business community's agenda and will provide the catalyst for changing business practices. This is a terrific initiative, however, there is a lot more to be done.
Don't think these developments are only happening overseas! Closer to home I attended a session in Sydney organised by GRI Focal Point Australia is explore two propositions on the future of reporting requirements arising from the May GRI bi-annual conference in Amsterdam. The propositions were:
- By 2015, all large and medium-size companies in OCED countries and large emerging economies should be required to report on the environmental, social and governance (ESG) performance and, if they do not do so, explain why?
- By 2020, there should be a generally accepted and applied international standard which would effectively integrate financial and ESG reporting by all organisations.
There appears to be a lot of interest in integrated reporting and several organisations in Australia are beginning to integrate their ESG information into their annual reports. It is a good sign, but still only early days.
