By Leigh Roberts
After the last few years of high change, what’s in store for corporate and integrated reporting
(IR) in 2024?
Of great directional relevance are the feedback results of the International Sustainability
Standards Board’s (ISSB) Request for Information (RFI) Consultation on Agenda Priorities of
May last year where they asked stakeholders for input on the projects they should tackle in
2024 and 2025. The list of four potential projects included new standards on the sustainability
topics of biodiversity, human capital or human rights, or a project looking at integration in
reporting.
The latter project obviously being of great interest in the IR world – to all the companies,
supporters, IR national bodies, stock exchanges, governance organisations, public sector
organisations, investors and other stakeholders, and more. While the projectspecifics weren’t
clearly spelt out in the RFI (sadly, the poor wording detracted) it was broadly expected to cover
overall corporate reporting including the Integrated Reporting Framework and the
International Accounting Standards Board (IASB) exposure draft on Practice Statement
Management Commentary (released in May 2021 to update the outdated original version of
2010).
The feedback results pertaining to the integration in reporting project can be found in the
meeting papers of the joint ISSB-IASB meeting held on 25 January 2024. It was their first ever
joint meeting with the purpose being to discuss the results. While the results showed there
was support for the integration in reporting project, the sustainability projects garnered
priority support for the ISSB’s proposed 2024/25 technical programme. Interestingly, the
results showed a diverse range of responses and understanding of the integration in reporting
project, which probably reflects the poor wording in explaining it.
The next step is for the ISSB to decide and announce its project/s of choice for 2024/25. This
is expected in the next few months.
The IASB is also expected to announce the way forward on its management commentary
project (which was started before the formation of the ISSB and before the IFRS Foundation
(the governing body of the ISSB and IASB) inherited custodianship of the Integrated Reporting
Framework). The various options they might consider are set out in the IASB December 2023
meeting paper.
But back to the integration in reporting project. Assuming it’s not on the ISSB work programme
for the next two or more years, here are my thoughts on the path ahead …
- In the years ahead – and you could read this as the interim period before an integration
in reporting project gets underway – integrated reporting and the Integrated Reporting Framework can carry on and go full steam ahead around the world because there is
an even greater need now for the integrated report … - Consider this: It is the only report in an organisation’s suite of reports that is overall
and holistic. It explains the external influencing factors, the six capitals it uses and
impacts over time (i.e. its business model), strategic objectives, performance, risks and
opportunities, stakeholder relationships, remuneration and outlook. It is integrated
information showing the integrated picture. And it’s a concise read! Any person
interested in understanding the organisation and the underlying factors influencing its
outlook will be interested in reading the integrated report to get the overall picture. - Consider this: The sustainability standards and frameworks necessarily address the
detailed information disclosures on specific sustainability topics, such as climate and
biodiversity. This information will likely be housed in separate demarcated reports or
in one very long sustainability report. The integrated report gives users the
opportunity to get the overall picture before delving into the detail of the sustainability
report/s. - Consider this: Integrated thinking (i.e. making decisions holistically considering the
inputs needed from the six capitals and the impacts on them over time) has been a
hot topic over the past five years and is set to become even hotter on increased
awareness of the connectivity of the six capitals and how impacts can affect the
longevity of an organisation. Integrated thinking is what well governed and managed
organisations run on, and what others strive for. It makes no sense at all to have
integrated thinking in place but separate, rather than integrated, reporting. And to
dispel a reporting myth … you don’t need to have integrated thinking in place before
you can prepare your first integrated report because there is much evidence to show
that the very preparation of the report hugely helps to shift the mindset into integrated
thinking. South African integrated reporters are a prime example of this.
I’m sure that the next few years will see the further rise and take-up of the integrated report,
applying the guidance of the Integrated Reporting Framework, as the overarching report to
the many subject-specific reports (and their guiding standards and frameworks) dealing with
the various areas of an organisation’s reporting be it financial, sustainability, risk, detailed
remuneration, detailed governance and more. (The IRC of SA Information Paper A Global
Comprehensive Corporate Reporting System is a useful read in this regard and is available
here.)
Please note: These are my personal view and are unrelated to the views of the IRC of SA.