Transcript Slide 1

International Federation of Accountants
Integrated Reporting: a global shift
Göran Tidström, IFAC President
Accounting Day
Copenhagen, Denmark
October 6, 2011
Integrated Reporting: a global shift
TOWARDS INTEGRATED REPORTING
Communicating Value
in the 21st Century
Integrated Reporting: a global shift
Global Reporting to express
• Financial
• Environmental
• Social and
• Governance
information all in one place.
Integrated Reporting: a global shift
A journey toward a sustainable future…
Integrated Reporting: a global shift
The International
Committee
Integrated Reporting: a global shift
The Global Reporting Initiative (GRI) drives
sustainability reporting by all organizations. GRI
produces the world’s most comprehensive
Sustainability Reporting Framework to enable
greater
organizational
transparency.
The
Framework, including the Reporting Guidelines, sets
out the Principles and Indicators organizations can
use to measure and report their economic,
environmental, and social performance. GRI is
committed to continuously improving and increasing
the use of the Guidelines, which are freely available
to the public.”
Integrated Reporting: a global shift
Integrated Reporting: merging the strands
Integrated Reporting: a global shift
CDP S&P 500 Report 2011
Strategic Advantage Through Climate Change
on behalf of 551 investors with assets of US$71 trillion Action
Integrated Reporting: a global shift
Integrated Reporting: a global shift
The IIRC – organisations involved
Companies
Corporate networks
- WBCSD
- UN Global Compact - BSR
- CERES
- Global Alliance
- WEF
Investors
Microsoft
GE, Natura
EDF, 100 Group
Novo Nordisk
China Light & Power
Nestlé, WPP
HSBC
Tata
Regulators, Standards
Setters and Stock Exchanges
- IASB
- FASB
- GRI
- CDSB
- IOSCO
- Tokyo Stock Exchange
- London Stock Exchange
- Financial Stability Board
Investor networks
- UN PRI
- UNEP-FI
- ICGN
- INCR
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Aviva Investors
APG
EFFAS
Hermes EOS
Mercer
French
government fund
IGOs and Accounting
- UNCTAD
- World Bank
- IFAC, ACCA
- JICPA, SAICA
- CIMA, ICAEW
- PwC, E&Y, GT,
Deloitte, KPMG,
BDO
Civil Society, Academia
- WWF - Transparency International
- WRI - Harvard University
- A4S
- Uni. Sao Paolo
- Volans - Uni. New South Wales
Integrated Reporting: a global shift
The report identifies six different types of capital:
Financial capital: The pool of funds that is available to the organization
for use in the production of goods or the provision of services.
Manufactured capital: Manufactured physical objects (as distinct from
natural physical objects) that are available to the organization for use in
the production of goods or the provision of services.
Human capital: People’s skills and experience, and their motivations to
innovate.
Integrated Reporting: a global shift
Intellectual capital: Intangibles that provide competitive advantage;
Natural capital: Natural capital and the natural processes that
generate them, including air, water, land, biodiversity, eco-system
health, and natural sources of energy; and
Social capital: The institutions and relationships established within
and between each community, group of stakeholders, and other
networks to enhance individual and collective well-being, which together
support the business model.
Integrated Reporting: a global shift
Seven categories of an integrated report
Report profile
Organizational overview and
business model
Operating context, including
risks and opportunities
Strategic objectives and
strategies to achieve those
objectives
Governance and remuneration
Performance
Future outlook
Integrated Reporting: a global shift
Aims of Integrated Reporting
• Transform current reporting processes from a
disconnected to an integrated approach that portrays a
concise picture of the business.
• Address all forms of capital and reflect the
interconnected nature of environmental, social,
governance and financial factors, highlighting those
aspects most material to business performance.
• Express the connections between economic,
environmental, social, governance and financial
factors and their impact on the long term performance
of the company.
Integrated Reporting: a global shift
Aims of Integrated Reporting
• Clearly communicate to the market about the drivers of
value in the short, medium and long term, rebalance
away from undue reliance on short-term financial
measures of performance.
• Highlight the extent to which sustainability is
embedded into and aligned with the way the business
is run on a day-to-day basis (its corporate plan).
• Reduce complexity in reporting, regulation and
guidance.
Integrated Reporting: a global shift
Risks to consider
• Directors’ duties
• Directors’ liability
• Commercial confidentiality
• Capacity building
• Information systems
Integrated Reporting: a global shift
Pilot Program
A two year program:
• Leading companies and investors exchanging
good practice.
• Trying and testing IIRC’s proposed principles and
content elements.
• Support the further development of the
Framework.
Integrated Reporting: a global shift
Pilot Program
Why join the program?
Help shape the future of integrated reporting.
Achieve visibility as a leader.
Receive support when piloting.
www.theiirc.org/about/pilot-programme
Integrated Reporting: a global shift
AEGON NV
Pilot Program
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Aegon
Danone
HSBC Holdings
Marks and Spencer
Prudential Financial
Microsoft
National Australia Bank
Takeda Pharmaceutical
Volvo
International Federation
of Accountants
www.ifac.org