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 (www.theiirc.org), 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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