Integrated Reporting - An Adjective, A Verb Or A Noun?

Submitted by David Connor

The ability to change the atmosphere in a whole room, regardless of size, through honesty and admission can be physically tangible, especially when those offering such weakness are considered leaders in size or through action.

A late invitation to the New York Stock Exchange and to witness the surrealistic event of the opening bell was too good to pass up during a recent trip to the US for the BSR Conference. My flight wasn’t until early evening that day, and never mind about the location, it was an integrated reporting (IR) event called ‘A Window into a Company’s Future’, and an illustrious attendee list to boot. It’s also been a professional fascination of mine for quite some time, and a hope for the future.

Many institutional events are often attempts to broadcast a position rather than encourage genuine productive debate. This was not one of those. Such honest occasions are often the result of the Chatham House Rule, a wonderful, if often not completely understood, setting where those in the room are requested not to attribute a source but are allowed to relay the information itself. Don’t expect many names to be dropped here, except without specific authorisation to do so, but I really wish I could properly convey the level of credibility to this specific event. Let’s just say globally influential individuals and organisations safely shared challenges amongst peers.

The very early tone setting opening gambit of honesty came from a certain large bank with impressive responsibility credentials. “I’m not sure we’ll ever do an integrated report” was by no means surprising, and definitely encouraged more open subsequent debate. Who needs one? Where is the pressure to add yet another expensive reporting process to the existing annual report and any non-financial (CSR / sustainability / corporate citizenship etc.) report? The vast majority of shareholders aren’t asking. Consumers certainly aren’t. Governments and regulators are scared to impose anything. Will mainstream investors ever really care?

The answer is mostly not in the immediate future, but further beyond the annual returns horizon, they’ll have to. I’ve spoken to a number of trusted sources and whilst integrated reporting is without doubt a journey of importance to engage those who power economic systems and most capable for creating change, it is still very much a niche influencer. IR is still in many ways a new born. In fact, one new nugget of gold gleaned from this room appeared to be that, apart from the passionate minority of professionals feeding the IR infant, it was actually high-net-worth individuals and their wealth managers overcoming the traditional inertia amongst financial mechanisms.

Integrated Reporting will have its day. It has to, whether as a noun, and adjective or a verb. My personal view is that it will evolve radically and, more importantly, facilitate new iterations of other frameworks along with way. It may be the one tool that catalyses a movement without ever realising its own originally targeted format.

My time was cut sadly short as I had to dash across the city to attend another meeting, but the overall feeling was not as deflating as this brief summary may suggest. As Michael Muyot, President of CRD Analytics openly commented “The Holy Grail for realizing the business value of Integrated Financial Reporting is straight-forward; it’s about Innovation, better, more efficient ways to make products and deliver services, gaining access to new untapped markets and launching new quality products. That leads to top line revenue growth and increases in profitability. Everyone is searching for financial ROI and this delivers it.”

He went on to say, “What I see as the real drivers for Integrated Reporting gaining traction here in the States are real events that focus on practical solutions, investors being proponents for allocating capital and stock exchanges making it part of their listing requirements.”

Another indicator of maturation of the wider sustainability finance movement is our event next week. @CSRwire will be helping @3BLMedia host Evan Harvey from Nasdaq as the guest for our #3BLchat on ‘Responsible Investing In A Complex Market – How ESG Limits Risk’ next Monday 24^th November at 2pm ET. Please join this open format conversation to learn, network, share your questions, answers, concerns or hopes!

All non-financial reporting developments and communications will be a key element of CSRwire’s current evolution as we move forwards into 2015. Watch this space for more news, opinions, services and events.