Published on: Oct 14, 2012
Two Tomorrows helping to shape global integrated reporting framework
Two Tomorrows sustainability services director Jason Perks has been contributing to the development of a new global framework for integrated reporting.
Jason has been working with the International Integrated Reporting Council (IIRC), the body leading the development of a global framework for integrated reporting.
The IIRC’s remit is to create a globally accepted framework for bringing together corporate financial, environmental, social and governance information in a clear, concise, consistent and comparable format.
Jason was invited to join the IIRC’s working group on the materiality aspects of integrated reporting. This followed research Two Tomorrows carried out into global best practice in integrating non-financial issues into annual reporting.
“Materiality is the core of integrated reporting,” says Jason. “Over many years with companies such as Rio Tinto, BP and BG Group, Two Tomorrows has been a leader in developing materiality assessment tools that help our clients ensure the right things are contained in their sustainability report. It’s this deep practical experience we’ve been able to bring to the table with the IIRC.”
Jason has been working with a wide range of stakeholders, from accountancy firms to NGOs, to compile the draft materiality framework. “It has been a very constructive exercise,” he comments. “When our draft is agreed, it will form an essential part of the integrated reporting framework.”
For companies considering their materiality approach, Jason has some tips: “Materiality is as much judgement as it is science,” he says.
“Keep the process simple and make sure it’s based on the best information available and clear criteria for decision-making. Ensure you have a deep understanding of stakeholder concerns, and take into account issues on international, regional and local levels. Involving internal stakeholders is key to gaining buy-in and ensuring your materiality process is a management tool not just a communications exercise.”
What is integrated reporting?
Every publicly listed company has to file an annual report on its financial performance in compliance with, in most cases, either International Financial Reporting Standards or U.S. Generally Accepted Accounting Principles. Increasingly, companies are also producing, mostly on a voluntary basis, corporate responsibility or sustainability reports. However, these vary widely in relevance and quality, largely because there is no global standard for measuring and reporting on environmental, social and governance performance. The role of the IIRC is to develop a framework that encourages concise, clear, consistent and comparable reporting of financial and non-financial performance.