Integrated Reporting – IIRC Approach
This is the second post in series on integrated reporting
The recent discussion paper from the International Integrated Reporting Committee (IIRC) for which comments were due on December 14th 2011 worries me. It starts with some statements with which I wholeheartedly agree…
“Integrated Reporting brings together material information about an organization’s strategy, governance, performance and prospects in a way that reflects the commercial, social and environmental context within which it operates. It provides a clear and concise representation of how an organization demonstrates stewardship and how it creates and sustains value.”
“Integrated Reports will meet the needs of a broad range of stakeholders.”
However this is immediately followed by this statement
“Initially, however, the IIRC intends to focus the development of the Framework on the needs of investors (providers of debt and equity), consistent with the current duties of those charged with governance in many jurisdictions.”
I cannot but fear that with the long term objective of bringing two diverse practices together, the worst place to start is by making one subservient to the needs of the other. Despite many examples of where sustainable behavior is good for business there are still a wealth of sustainability issues which are currently, at best, of no interest to most shareholders. Building a framework that ignores this will set us back in the nascent field of sustainability reporting at exactly the time where we need to keep moving forward.
I think this was a run around, instead of over, the hurdle I described in the first post of this series. And it will come back to haunt us. We should address the big issue from the get go. Personally, I would urge that the framework for integrated reporting starts by recognizing and describing the diverse range of stakeholders and diverse, sometimes hard to measure issues of CR and sustainability.
See also the CROA response to the IIRC discussion paper here. Response to question 4(a) refers.