CMA A.N. Raman, Chair, Sustainability Advisory
Group, International Federation of Accountants
(IFAC)
Considering the variety of formats of these self-declared
integrated reports, in your opinion, why have companies
started preparing integrated reports around the globe?
What are their drivers?
Companies have understood well that the valuation of business
by investors moves beyond financial parameters. Some
companies in India, in fact, started embedding sustainability
into business well before even sustainability reporting started,
as it was the right way of doing business. However, such
companies were not in the majority. The value creating drivers
were more aligned to the sustainability world and hence these
companies went into sustainability reporting as a natural thing
to do.
However, the chasm between financial metrics and
sustainability metrics was always there. But as the world started
speaking of integrating the financial metrics with sustainability
metrics, the framework was still missing. But the spirit started
filling the atmosphere.
The companies which are first movers on any such initiative
started making attempts to place sustainability figures along
with financial metrics and with some modifications started
declaring their reports as integrated reports. These companies
always knew the content of future IR can be perfected and can
evolve over time. My view, therefore, is that these companies
that wanted the early mover advantage and helped by evolving
expertise, attempted what I may call first generation integrated
reports without a standardized approach.
Considering your perspective in relation to the link
between sustainability and business' value creation, what
should be the core part of an integrated report?
The core part of an integrated report should concisely explain
their business model of creating value. The business model
should bring out the touch points with various forms of capital
creation and should say in a continuum in what direction the
reporting entity is moving.
How do you see the link between sustainability reporting
and integrated reporting?
The KPI and disclosure elements of the sustainability reporting
form a very important building block of an Integrated Report.
But GRI should bring out an approach paper as to how to
map various KPIs to the six forms of capital. In particular, the
correlation between KPIs, if brought out with conceptual clarity,
can be of great value to IR preparation.
Any other comments you would like to add or emphasize?
The past efforts of GRI in articulating the sustainability
framework to the accounting community has not been
adequate. As a result, the accounting profession sees
sustainability reporting as not their cup of tea and maintains a
distance. This I see as a strategic gap which should not exist and
needs reconciliation
CA Ramachandran Mahadevan,M.Com.,F.C.A.,
I-708,Mantri Tranquil,Subramanyapura Post,
Bangalore-560061
Karnataka,India.
+91 80 42011024
You never achieve success unless you like what you are doing."
--Dale Carnegie,
American self-help author and lecturer
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