Monday, 6 January 2014

It’s a Wonderful (Integrated) World

All eyes have been on South Africa recently. We have been sharing in the country’s loss while, it seems to me, wishing the country well for a future, post-Mandela age. I wrote to him once and he was kind enough to send a response. I remain impressed.

The sight of nearly 100 world leaders, together in the pouring rain in the cavernous FNB stadium outside Soweto in Johannesburg, tends to inspire a ‘bigger picture’.  It could be argued that we do too little ‘world thinking’, and yet this week reminded us that the people of the world share similar problems, emotions and aspirations.

Similarly, there is a movement catching on in sustainability which is global in perspective; broadening horizons, and moving away from national concerns and financial obsessions. It is called Integrated Reporting (, and it brings together the long term value of creation of all kinds. Unilever, HSBC, Deutsche Bank, Hyundai, Microsoft, PepsiCo, National Australia Bank and Tata Steel are among over 100 businesses in the IR Pilot Programme. I note that Singapore has a board member and a local bank, DBS, which started using the system in 2012.

IR is being pioneered in 25 countries. This includes South Africa, which is taking the lead in writing IR into statutory requirements. Once again, South Africa draws us together.

Supported and launched by Prince Charles in 2009, details of the IR Framework were only released on 9th December 2013. The benefits for business include:
·         A rise in all forms of capital.
·         More connected departments within corporations, breaking down silos.
·         Improved internal reporting and governance processes.
·         A lower financial capital cost.

Currently, many companies view sustainability and Corporate Social Responsibility (CSR) as separate from the main business. Such companies may publish partnership reports some months after the main report, or accounts which leave a feeling that they perhaps don’t care. The way sustainability measures are reported is not standardised, and this leads to many comparison problems, particularly for prospective investors.

There is undoubtedly a long way to go in sustainability efforts, but this seems to be the goal; it is of particular interest to those with governance roles in businesses, as well as their accountants and fund managers. For details, download a copy of the easy-to-follow framework from the IIRC website. 

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