A new approach to corporate reporting is required in a changing
global landscape, according to the discussion paper Towards
Integrated Reporting: Communicating Value in the 21st Century,
released by the International Integrated Reporting Committee
(IIRC).
The paper presents proposals for the
development of an International Integrated Reporting Framework, a
globally accepted integrated reporting framework bringing together
financial, environmental, social and governance information.
The Chartered Institute of Management
Accountants (CIMA) head of corporate reporting Nick Topazio told
The Accountant it is increasingly clear how the separation
of financial and non-financial reporting is an issue that needs to
be addressed as “the reports we have today are just becoming far
too complex and clattered with all sorts of information and
data”.
CIMA head of corporate reporting admitted that
adding more information could “potentially worsen things”.
“A good integrated report will cut through all
of the immaterial items and focus in a concise way on the more
important and salient ones,” Topazio said.
Topazio stressed a major problem in achieving
a good integrated report is getting hold of the right data. He said
there is a lot of other information which needs to be gathered and
when you’ve got multinationals and companies with many different
divisions, the process can become complicated.
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By GlobalData“Getting the systems right is something that
needs to be thought through,” he added.
Topazio said integrated reporting should “not
add a lot of costs to well-run businesses” though the issue of
costs “is certainly a question mark”.
CIMA and 50 other organisations around the
world have signed up to a two-year pilot programme that will
explore the principles and practicalities of integrated reporting
and features blue chip companies such as Microsoft, HSBC and
Coca-Cola.
Topazio estimates it will take another three
to four years before sustainability becomes standard practice.
