IFAC PAIB Forum: Integrated reporting can result in better governance
13 May 2011
The focus of the forum was on how professional accountants in business can support their organisations to improve governance practices through the integration of financial and non-financial information into their reporting, including a focus on environment, social and governance (ESG) factors.
The forum and subsequent PAIB Committee meeting, held in Melbourne, included speakers from National Australia Bank, VicSuper (a retirement/pension provider), Macquarie Securities, KPMG, the University of Melbourne, the Water Accounting Standards Board (Australia), and the International Integrated Reporting Committee's content working group. A key focus of the discussions was how integrated reporting can drive good governance practices, including new systems and processes to measure, analyse and report an organisation’s environmental, social and economic performance.
The main conclusions of the forum were:
- integrated reporting needs to reflect an organisation’s strategy and values, as well as how it is managed in all social, environmental and economic dimensions of performance;
- the process of integrated reporting, in turn, is a powerful tool to help drive an organisation's strategic agenda, providing management with key drivers of performance;
- integrated reporting has to be open and transparent by reflecting both improvements in performance as well as weaknesses; and
- pension fund investors, as well as some other institutional investors, are increasingly looking for financial implications of ESG factors to understand how an organisation’s strategy and operations are affecting the numbers and key measures of performance.
The International Integrated Reporting Committee (IIRC), of which IFAC is a participant, is moving quickly and with wide stakeholder support to develop a globally accepted international framework for integrated reporting that brings together the various ESG reporting dimensions. The framework will be designed to make reporting more relevant for organisations, their shareholders, and their other stakeholders, to reduce the cost and complexity of reporting, and to provide a better basis to determine the cost of capital.
Press release
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