Toward an Integrated Reporting Model to Measure Sustainable Development: Connecting Systems, People and Knowledge

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Presentation given by Warren Allen, Deputy President for the International Federation of Accountants, at the World Bank's Fiduciary Forum in Washington, DC in May 2012. Presentation discusses integrated reporting and sustainable development.

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  • I would like to acknowledge the Wurundjeri (wa-run-jeri) People of the Kulin Nation, the Traditional Owners of the land on which we are gathered and pay my respects to their Elders both past and present.Mention I speak for IFAC here, not the IIRC. I can speak about the IIRC, but not for it.
  • Integrated reporting builds on the many positive developments to date. The IIRC pulls together a cross section of leaders from the corporate, investment, accounting, securities, regulatory, academic and standard-setting sectors as well as civil society. It has political buy-in from a multi-disciplinary perspective and is trying to achieve sustainability from two perspectives:Sustainability of the organization from a financial and economic perspective, which has social significance, and sustainability from an environmental perspective.The information provided by an integrated report is needed by decision makers at all levels, including the capital markets and by internal management. Reporting is an important part of the feedback cycle, and should provide decision makers with reliable and relevant information on whether objectives are being met, and how they might need to be refined in light of new learning.What is reported mirrors what we believe are important aspects of performance. Reporting in an more integrated way also can drive more integrated governance and management practices within an organization, as is being evidenced in South Africa where integrated reporting is implemented.These two perspectives are not distinct and have to be considered together.
  • We continue to see Integrated Reporting as the way forward in corporate reporting, and we continue to believe that IFAC and the accountancy profession need to have a seat at the table.The economy, environment and society are inseparable to understanding an organization’s performance. IR connects information about strategy, risk, remunerationand performance. Sustainability and integrated reporting have become important parts of our vocabulary. They are important to companies and investors, and to communities.And they are very important to the accountancy profession. This is the future of reporting, and our position is out in front, proactively leading the change.
  • We continue to see Integrated Reporting as the way forward in corporate reporting, and we continue to believe that IFAC and the accountancy profession need to have a seat at the table.The economy, environment and society are inseparable to understanding an organization’s performance. IR connects information about strategy, risk, remunerationand performance. Sustainability and integrated reporting have become important parts of our vocabulary. They are important to companies and investors, and to communities.And they are very important to the accountancy profession. This is the future of reporting, and our position is out in front, proactively leading the change.
  • Toward an Integrated Reporting Model to Measure Sustainable Development: Connecting Systems, People and Knowledge

    1. 1. Toward an Integrated Reporting Model to MeasureSustainable Development: Connecting Systems,People and Knowledge Warren Allen IFAC Deputy President 2012 Fiduciary Forum May 9, 2012
    2. 2. Toward an Integrated Reporting Model to MeasureSustainable Development: Connecting Systems, Peopleand Knowledge Sovereign Debt and Global Financial Crises Taught Us – There is an urgent need for understandable financial and non-financial information that will show how an organization and management run their business – There needs to be a shift from reporting on stagnant financial information to qualitative reporting indicating an organization’s future strategy
    3. 3. Toward an Integrated Reporting Model to MeasureSustainable Development: Connecting Systems, Peopleand Knowledge The Opportunity of Integrated Reporting – Integrates sustainability of an organization from a financial, economic, social and environmental perspective – Connects information about an organization’s current decisions with its future prospects – Connects information about strategy, risk, remuneration and performance – The International Integrated Reporting Council has wide multi-disciplinary political support to develop an integrated reporting framework – IR is not intended to replace existing forms of reporting, but to provide a clear and understandable picture of financial and ESG issues
    4. 4. Toward an Integrated Reporting Model to MeasureSustainable Development: Connecting Systems, Peopleand Knowledge International Integrated Reporting Council (IIRC) – Strong IFAC support and representation Key Developments – Pilot Programme—75 organizations are currently testing the Framework – IIRC Discussion Paper—responses mostly supportive of a move forward to IR – IIRC will be publishing their official DP findings in the coming weeks – A draft Framework is expected to be exposed in the second half of 2013
    5. 5. Toward an Integrated Reporting Model to MeasureSustainable Development: Connecting Systems, Peopleand Knowledge Implementation Track – Organizations in various countries are already exploring the concepts of integrated reporting • In South Africa, integrated reporting is required as a listing requirement of the Johannesburg Stock Exchange Call to Action – Commitment to integrated reporting – Participation in Framework development process – Knowledge and experience is crucial to the process – Wider dataset of information
    6. 6. www.ifac.org

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