A distinguished group of global accountancy leaders have signed up to an “integrated reporting” initiative to reflect social and environmental factors as well as finances.
At the head of the queue is the Prince of Wales, who’s Accounting for Sustainability Project teamed up with the Global Reporting Initiative (GRI) in December to create a new International Integrated Reporting Committee. The IIRC’s mission is to create a generally accepted framework for company reporting that combines financial and non-financial measures in a way that links sustainability and economic value.
The committee’s main objectives are to:
- support investors’ long-term information needs by showing the broader consequences of decision-making;
- reflect the interconnections between environmental, social, governance and financial factors in decisions that affect long-term performance and condition
- provide the necessary framework for environmental and social factors to be taken into account systematically in reporting and decision-making
- shift performance measures away from focusing solely on short-term financial performance; and
- bring reporting closer to the information used by management to run the business on a day-to-day basis.
Among the committee members are: the chairmen/chief executives of the six top global accountancy firms (plus the UK 200); corporate CFOs from companies including Microsoft, Tata, EDF and Nestle; the chairmen of both the International and US Financial Accounting Standards Boards; chief executives from four leading accountancy bodies and a host of academics and representatives from non-government organisations and sustainability projects.
The UK profession has also been stirring around this issue. The ICAEW has been working on assurance issues since 2004-05 and this week published a 16-page guide ‘Sustainability assurance - your choice’ (650kb PDF) to explain the principles of sustainability in simple terms that business managers and accountants can understand. The guide includes a Q&A around the core issues and several examples of how companies might go about creating appropriate reports on sustainability. It ends with a checklist of matters to consider.
A key feature of the ICAEW guide is the way it positions sustainability reporting as a service that accountants are well equipped to supply.
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About John Stokdyk
John Stokdyk is the global editor of AccountingWEB UK and AccountingWEB.com.