An influential group of decision makers has launched a project to create a global accounting framework for corporate sustainability.
The idea is to build a framework that covers both financial and non-financial reporting, making it easier for companies to talk about both at the same time and have the information verified by a third party.
The International Integrated Reporting Committee (IIRC) was launched this week by the Prince’s Accounting for Sustainability Project – set up by HRH The Prince of Wales – and the Global Reporting Initiative (GRI).
It has the backing of the four big auditing firms, the 100 top finance directors in the UK, the Association of Chartered Certified Accountants, the International Corporate Governance Network, and many other influential organizations and individuals.
Mervyn King, chairman of the GRI, is the deputy chairman of the IIRC’s steering committee. ‘To make our economy sustainable we have to relearn everything we have learnt from the past,’ he says in a statement. ‘That means making more from less and ensuring that governance, strategy and sustainability are inseparable.’
The move taps into the demand from investors and other stakeholders to see integrated reporting, where companies discuss financial and sustainability issues at the same time.
One recent convert to integrated reporting is Pfizer, which has announced plans to bring together its annual review and sustainability report over the next two years.
Adrian Parker, client partner at corporate reporting firm SAS, welcomes the new project. ‘This is a great initiative – encouraging increased disclosure, transparency and the integration of sustainability are some of the key issues in the corporate reporting arena today,’ he says.
‘We see improvements year on year in the sustainability elements of companies’ narrative reporting but our research demonstrates there is still room for improvement.’
The project has not met with universal backing, however. One sustainable reporting expert says the project could jeopardize the future of the stand-alone CSR report. ‘Where will the impetus come from to expand CSR and develop new thinking?’ he asks.
A full list of backers of the project is available to read on the IIRC’s website.
