Integrated Reporting is here to stay despite the challenges
A high-level roundtable discussion on integrated reporting concluded that integrated reporting is here to stay despite the challenges involved. The roundtable discussion on Integrated Reporting: The Future of Corporate Accounting? was organised by ACCA (the Association of Chartered Certified Accountants) and moderated by CSR Asia Singapore. The roundtable panelists included representatives from ACCA, Responsible Research, SGX, Ernst & Young, PowerSeraya, Arisaig Partners, KPMG, and the Nanyang Business School.
Integrated Reporting is the integrated representation of a business’ financial performance and non-financial performance including environmental, social, and corporate governance (ESG) measures. Integrated Reporting helps businesses make more sustainable decisions, and enables investors and stakeholders to understand the sustainability and ethical impact of an investment in a business.
On the question of whether Asian companies are ready for integrated reporting, some panelists agree that it is a step too far and see businesses taking baby steps towards that direction. It would need a maturing process for Asian companies as their mindset is not ready yet, and they struggle with knowledge and stakeholder engagement. However, the process of working towards integrated reporting would be valuable. There could also be an opportunity for Asia to leapfrog to integrated reporting directly without having to follow the current way of financial reporting.
The panelists also discussed the challenge to come up with non-financial indicators and find ways to quantify these qualitative factors. This is necessary for comparison purposes but should take into account the context and different stakeholders’ concerns. Other key concerns expressed include the need for a connected approach and ensuring that companies connect both financials and CSR, and the need for the investing and accounting community to think long term and be forward looking.
The panelists agree that it would take more than three years for integrated reporting to take root in Asia. Management buy-in is crucial and the leadership, preferably coming right from the CEO, has a huge role in driving integrated reporting. In conclusion, the panelists unanimously agree that integrated reporting is here to stay despite the challenges involved.
Image: The IIRC