Integrated reporting prototype framework launched to improve corporate sustainability reporting

“Major step forward” for investor-backed initiative

The first prototype integrated reporting framework has been launched, marking a milestone in the investor-backed effort to improve the way corporate sustainability information is presented.

The project’s investor pilot programme is backed by leading asset owners such as the Netherlands’ APG and PGGM, Denmark’s ATP, the Government Employees’ Pension Fund of South Africa, Norway’s Norges Bank Investment Management (NBIM), and the UK’s Railways Pension Trustee Company Ltd. The network was launched in March 2012; it comprises 25 global institutional investors and is chaired by Colin Melvin, chief executive at Hermes Equity Ownership Services.

The corporate pilot includes more than 80 global blue-chip firms (list).
The International Integrated Reporting Council (IIRC), the body which is heading up the project, says it is on course to publish a formal ‘consultation draft’ of the framework in April 2013 – which will be followed by the official “version 1.0″ in December 2013.
The IIRC includes regulators, investors, companies, standard setters, the accountancy profession and non-governmental organisations which hopes < IR > will become the corporate reporting norm.“An integrated report is a concise communication about how an organization’s strategy, governance, performance and prospects lead to the creation of value over the short, medium and long term,” the 51-page prototype framework states. It’s expected that changes will be made to the prototype in the coming months as the wording gets refined.

Integrating reporting is principally aimed at the “providers of financial capital”, defined as the ultimate beneficiaries of investments, collective asset owners, and asset or fund managers with a focus on long-term investments.

“These include investments in research aimed at long term innovation and in the infrastructure needed to address mounting global challenges, such as resource shortages as planetary limits are approached, economic instability, climate change, and changing demographics and societal expectations.”

With integrated reporting still at the formative stage, the IIRC has a database of emerging practice here.

“Promoting Integrated Reporting is a step in the right direction, but it won’t be sufficient unless there is investor demand,” says Hermes’ Melvin.