CIMA responds to global consultation on integrated reporting

The Chartered Institute of Management Accountants (CIMA) has responded to a key discussion paper from the International Integrated Reporting Committee, asserting that a new approach to corporate reporting is required in a changing global landscape.

Formed in 2010, the IIRC is an influential cross section of global leaders from the corporate, investment, accounting, securities, regulatory, academic and standard-setting sectors, as well as civil society. It aims to create a globally accepted integrated reporting framework bringing together financial, environmental, social and governance information in a clear, concise, consistent and comparable format.

The eagerly awaited discussion paper, ‘Towards Integrated Reporting: Communicating Value in the 21st Century,’ was published in September, and presents the rationale for integrated reporting. It offers initial proposals for the development of an International Integrated Reporting Framework and outlines the next steps towards its creation and adoption.

Nick Topazio, CIMA’s head of corporate reporting, and a leading authority on integrated reporting, said: “Corporate reporting does not seem to satisfy most of its users. The annual report and accounts have become compliance documents. They have lost their way as communications documents.”

“There is currently much mistrust of commercial organisations, and in many circles the term ‘corporate behaviour’ has become synonymous with greed, self-interest and detachment from the real world. However there are many companies that have successfully adopted business strategies that are focussed on long-term sustainable profitability, and the corporate reporting system must be allowed to develop to allow effective communication of their stories.”

“To be able to meaningfully comment on the economic, social and environmental influences and impacts of an entity’s operations requires integrated thinking and planning within the organisation.

The business strategy must recognise not just the importance of short-term profits, but also the need for the organisation to succeed over the medium and long-term. Only once integrated decision-making exists within an organisation will it be in a position to produce integrated, as opposed to combined, reporting.”

“CIMA supports the work of the IIRC and the principles of integrated reporting; we see this as a natural extension to our work in driving narrative reporting forward.  We have long advocated the integration of strategy, opportunities, risk and performance with a clear explanation of how the organisation makes money - the business model. If there are material issues that may affect long-term business success then they should be discussed openly and completely in the narrative report in an integrated manner.”

CIMA, along with more than 50 other organisations around the world, have signed up to a two-year pilot programme to explore the principles and practicalities of integrated reporting, which could change the way businesses report on their activities. The pilot features leading companies, including Microsoft, HSBC, and Coca-Cola, with further involvement from organisations around the globe such as South African power company Eskom, Russia’s state-owned nuclear power company Rosatom and CLP, the Chinese utility giant.