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A mission to create a globally recognized framework for integrated corporate responsibility and financial reporting has been launched by a wide coalition of companies, accountancy bodies, regulators and non-governmental organizations.
The initiative will be overseen by a newly created International Integrated Reporting Committee (IIRC), which has been given the remit of creating ‘a globally accepted framework for accounting for sustainability… which brings together financial, environmental, social and governance information in a clear, concise, consistent and comparable format.’ The first fruits of its work are expected within a year, although no timeframe has been announced for when a finalized framework will be agreed and released.
Two of the main protagonists in the move are the Global Reporting Initiative and The Prince’s Accounting for Sustainability Project, which was launched in 2004 to look at new ways of bringing social and environmental considerations into mainstream corporate reporting. But the IIRC also has wide backing from many organizations, including the International Accounting Standards Board, the US Financial Accounting Standards Board, and the International Organization of Securities Commissions, which promotes international regulatory standards across financial markets. Participating firms include Nestle, HSBC and KPMG.
The project, which will initially be based at the Prince’s Accounting for Sustainability Project in London, is to be administered by a 33-member steering committee chaired by Sir Michael Peat, private secretary to the Prince of Wales, with a 20-strong working group carrying out more detailed investigations, led by corporate governance guru Mervyn King.
Although some companies, such as American Electric Power, Philips and Novo Nordisk, have already moved towards integrated reporting by combining their annual CSR and financial reports, the discipline is still in its infancy. In some quarters it is being seen as the new holy grail of reporting, allowing firms to demonstrate that they are truly taking non-financial matters into account when running their businesses.
Michael Muyot, president of the US SRI firm CRD Analytics, said the move was important if only for the high level of support it has garnered. ‘One just has to take a look at the names of the people involved and the enterprises that have volunteered to be part of [it] and you will quickly recognize them as the change agents of our times,’ he said.
The initiative will be overseen by a newly created International Integrated Reporting Committee (IIRC), which has been given the remit of creating ‘a globally accepted framework for accounting for sustainability… which brings together financial, environmental, social and governance information in a clear, concise, consistent and comparable format.’ The first fruits of its work are expected within a year, although no timeframe has been announced for when a finalized framework will be agreed and released.
Two of the main protagonists in the move are the Global Reporting Initiative and The Prince’s Accounting for Sustainability Project, which was launched in 2004 to look at new ways of bringing social and environmental considerations into mainstream corporate reporting. But the IIRC also has wide backing from many organizations, including the International Accounting Standards Board, the US Financial Accounting Standards Board, and the International Organization of Securities Commissions, which promotes international regulatory standards across financial markets. Participating firms include Nestle, HSBC and KPMG.
The project, which will initially be based at the Prince’s Accounting for Sustainability Project in London, is to be administered by a 33-member steering committee chaired by Sir Michael Peat, private secretary to the Prince of Wales, with a 20-strong working group carrying out more detailed investigations, led by corporate governance guru Mervyn King.
Although some companies, such as American Electric Power, Philips and Novo Nordisk, have already moved towards integrated reporting by combining their annual CSR and financial reports, the discipline is still in its infancy. In some quarters it is being seen as the new holy grail of reporting, allowing firms to demonstrate that they are truly taking non-financial matters into account when running their businesses.
Michael Muyot, president of the US SRI firm CRD Analytics, said the move was important if only for the high level of support it has garnered. ‘One just has to take a look at the names of the people involved and the enterprises that have volunteered to be part of [it] and you will quickly recognize them as the change agents of our times,’ he said.
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