AN INFLUENTIAL think tank has been formed to overhaul international company reporting practices by combining financial and sustainability reporting into a new “integrated” model.
Only problem is the people who will be most impacted by the proposed changes – investors and investor relations professionals — are scarcely represented.
The International Integrated Reporting Committee plans to publish a framework for a global integrated reporting model that will be presented to the G20 in 2011.
It was officially launched Aug. 2 by the Accounting for Sustainability Project (A4S) and the Global Reporting Initiative (GRI). Members include a veritable who’s who of corporate, accounting, securities exchanges, not-for-profit and regulatory leaders.
No GIRN, no CFA Institute
Looking at the member and working group lists, the absence of the two key stakeholder groups – investors and the IR professionals who serve them – is striking. As far as I can tell, the only investor representative is Professor Angelien Kemna, Chief Investment Officer of the Netherlands pension administrator APG.
And while several companies are represented, including Aviva, EDF, HSBC, Microsoft, Nestle and Tata, none of their representatives includes “investor relations” in their title.
The CFA Institute, which represents the interests of more than 100,000 financial professionals and most fund managers and analysts globally, is not a participant. Neither is the Global Investor Relations Network or any of its national member organizations, such as the National Investor Relations Institute in the US.
Survey shows less investor interest than two years ago
In a way, this isn’t surprising because sustainability or environmental, social and governance reporting doesn’t top the list of hot button issues for these audiences.
A recent survey of 50 European analysts by Thomson Reuters for SAS, the UK-based design and communications group, found that corporate responsibility information was the least used area of annual reports, and even less important to them that two years ago.
From a technology standpoint, it’s interesting to note that the IIRC’s website is powered by the open-source Drupal software, which I suppose is a positive. However, as Stewart McKie points out on Rivet Software’s blog, the group has “no XBRL representation and virtually zero software company representation.”
So can the IIRC succeed without input from the people its framework will impact most? The Financial Times describes the IIRC’s objectives as “challenging,” pointing out that financial accounting bodies still cannot agree on converging accounting standards.
But it says “the high level support being lent to the initiative — by the Prince of Wales for example — could help it to succeed.”
What are your experiences? Is the buy-side asking more questions about sustainability? Will the sell-side ever care?
Dominic Jones (bio) created IR Web Report in 2001. He is a consultant to leading public companies and investor relations service providers worldwide. You can contact him via the contacts page.
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