A new international committee formed Monday by the Prince of Wales’ Accounting for Sustainability Project (A4S) and the Global Reporting Initiative (GRI) will work to integrate the way companies report on strategy, risk, governance, financial performance and sustainability.
The International Integrated Reporting Committee (IIRC), whose high-profile members include the heads of FASB, the International Accounting Standards Board (IASB), the International Federation of Accountants (IFAC), each of the Big Four firms, representatives of some of the world’s largest institutional investors and governance organizations, is the result of a decision made last December at a meeting of more than 20 organizations including the AICPA to form a committee that would oversee development of an integrated reporting model (see Proposal: Connect Sustainable Activities and Financial Reports).
The organizations agreed that part of the problem in reporting on sustainability issues is that numerous organizations are developing standards but no single organization is coordinating the efforts.
“The intention is to help with the development of more comprehensive and comprehensible information about an organization’s total performance, prospective as well as retrospective, to meet the needs of the emerging, more sustainable, global economic model,” the A4S and GRI said in a joint press release.
“The case for globally consistent financial reporting standards is well understood and accepted,” said IASB Chairman Sir David Tweedie in the press release. “It is appropriate to apply the same global approach to other aspects of corporate reporting. This initiative represents an important step on that journey.”
“The goal of the IIRC is not to increase the reporting burden on companies and other entities,” said IFAC CEO Ian Ball. “Rather, it is to help them and all their stakeholders make better resource allocation decisions. All of us have a stake in a sustainable society. While integrated reporting alone cannot ensure sustainability it is a powerful mechanism to help us all make better decisions about the resources we consume and the lives we lead.”
Further information on the IIRC can be found at www.integratedreporting.org.
The A4S project was launched in 2004 by The Prince of Wales to develop decision-making and reporting systems that take into account the longer-term and broader consequences of actions and are capable of responding to the sustainability challenges faced in the 21st century. A4S works with businesses, investors, governments, accounting bodies, the public and academics to build an international consensus around the need for a generally accepted integrated reporting framework and to develop practical guidance and tools to embed sustainability into decision-making processes.
The GRI has developed a widely used sustainability reporting framework and is committed to its continuous improvement and application worldwide. This framework sets out the principles and indicators that organizations can use to measure and report their economic, environmental and social performance.
--Matthew G. Lamoreaux (email@example.com) is a JofA senior editor.
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