Corporate directors around the world have become increasingly aware of the need to provide a holistic view of a business enterprise, incorporating financial as well as environmental, social and governance frameworks, in order for key stakeholders to make economic decisions.
Globally, much work has been done to align international accounting standards, which form the basis of reporting annual financial statements; at present that task is incomplete. There has also been an increased focus on developing a framework for integrated reporting, with the International Integrated Reporting Council (IIRC) driving forward this body of work. The IIRC’s goal is to create a framework that brings together the varying reporting requirements in a “clear, concise, consistent and comparable format”, which will “support transition to a more sustainable global economy”, according to the IIRC’s mission statement.
The IIRC’s Consultation Draft on the international Integrated Reporting framework defines an integrated report as “a concise communication about how an organisation’s strategy, governance, performance and prospects, in the context of its external environment, lead to the creation of value over the short, medium and long term”.
There are numerous participants in this movement, which includes the Sustainability Accounting Standards Board (SASB), which is currently developing sustainability accounting standards for use by publicly listed entities in the United States for disclosing their material sustainability issues in their SEC Forms 10-K and 20-F. Other participants include the World Intellectual Capital Initiative (WICI), a global movement to encourage sustainability reporting, and the Global Reporting Initiative (GRI), which has produced the leading framework for sustainability metrics. GRI released its revised G4 guidelines in May 2013.
Oct-Dec 2013 Issue
Australian Institute of Company Directors