Chief Executive, ACCA
Over the past decade, from our role in its formation and governance to applying the International <IR> Framework to ACCA’s own reporting and professional qualifications, ACCA has proudly supported the IIRC.
During these ten years, more and more influential figures have joined the call for better reporting.
In 2012, Larry Fink began issuing his annual letters to CEOs globally, articulating broader and higher expectations from their investors.
2016 saw an especially powerful endorsement of the IIRC’s ethos when Fink asked that “every CEO lay out for shareholders each year a strategic framework for long-term value creation”.
Then, in 2019, the influential US Business Roundtable, which includes 181 of the largest companies in the US and the three biggest companies by market capitalisation globally, published its statement on purpose. This outlined that while each company served its own corporate purpose, they also shared “a fundamental commitment to all of our stakeholders”. In the statement, its signatories committed to supporting the communities in which they work and to “protecting the environment by embracing sustainable practices across our businesses” in order to generate “long-term value for shareholders”.
It’s hard to overstate what an evolution in corporate thinking and leadership this represents. And the IIRC’s work has been a significant part of shaping that sea change in attitudes.
These two pronouncements are also highly significant because of their origin – the US, the world’s largest global economy, which has traditionally been cautious and conservative in embracing reporting innovation, favouring a rules-based over a principle-based approach. These bold, forward-looking pronouncements mark a decisive shift – from disclosure as obligation to reporting as a means of driving positive societal change.
All of us involved in the integrated reporting movement of course want this to be reflected in adoption of integrated thinking and integrated reporting. But we still have significant work to do to here.
Currently, some 2,000 companies across 70 countries have adopted integrated reporting – but there are around 41,000 listed companies globally. So take up needs to scale up significantly – and that’s what the next phase of the IIRC’s strategy is targeting.
An impediment to adoption has undoubtedly been the lack of joined-up thinking across the corporate reporting ecosystem itself. So, the recent announcement that the main standard-setting bodies are working together to shared vision for a comprehensive, globally accepted, corporate reporting system is another very important part of the roadmap towards mass adoption.
Another vital feature of driving better corporate thinking and behaviour is reporting performance against targets.
Arguably, what the integrated reporting movement lacked at the outset was an understood, agreed and measurable aspiration of the societal change the world needed to see. So the creation and adoption of the UN Sustainable Development Goals (SDGs) by governments around the world was a pivotal moment. This has been a decisive galvanizing force in focusing and unifying efforts, with increasing number of companies articulating strategy and purpose in the context of the SDGs.
But, again, this needs to move much faster than it has. The goals are designed to be met by 2030 and the UN has called on all sectors of society to mobilise for a decade of action to generate the required transformation in the global economy.
Martin Luther King said that the arc of the moral universe “bends towards justice”. But history doesn’t just happen; it is shaped by people and their individual and collective efforts. And it will need more of us to be involved in that positive shaping in the short window we have left to effect change.
Now is the time for all of us to redouble our efforts towards thinking and reporting that can remake a better world.
The IIRC’s work has been a significant part of shaping the sea change in attitudes.