Integrated Reporting Framework in the Profession’s Future
At the end of June, I had the pleasure of attending the International Integrated Reporting Committee (IIRC) Roundtable meeting at the Bloomberg global headquarters in New York. What a great event!
Business leaders from corporate, investor, standard-setting and regulatory communities sat down to discuss opportunities for creating a business reporting model that links environmental, social and governance (ESG) reporting to mainstream reporting. This integrated framework would then give investors and the public more comprehensive information on how organizations use their resources and perform over the long term.
Harvard Business School professor, and IIRC member Robert Eccles, spoke about the importance of integrated reporting’s focus on company strategy and long-term financial performance. He also spoke about integrated reporting making the critical link between environmental, social and governance (ESG) performance and financial performance. Investors, shareholders, regulators and consumers are expecting organizations to have a firmer grasp on their ESG metrics and how these metrics relate to long-term financial performance of their organization, and they will use this information to make decisions accordingly.
During the roundtable, we learned about organizations like PepsiCo, which has invested significant time and energy to fulfill its mission to “Perform with Purpose.” A huge part of Pepsi’s effort here is Sustainability Reporting, in which they have committed to ensure sustainable financial performance as well as to strive toward human, environmental and talent sustainability.
While sustainability is one piece of the puzzle, integrated reporting is really a new reporting model that focuses on an organization’s strategy and its ability to create value over the long term. It will hopefully bring external reporting closer to the information used by management and provide that much more value to organizations, investors and shareholders.
Being a part of creating and implementing the integrated framework highlights the talents and competencies of our profession, creates opportunities for CPAs and makes them more competitive in the global market. What an exciting future we have to look forward to!
If you want to be a part of the discussions about how CPAs can play a role in sustainable business, join your fellow AICPA members on our AICPA Green LinkedIn Subgroup.
Carol Scott, CPA, Vice President - Business, Industry and Government, American Institute of CPAs.