Emergence of Integrated Reporting
29 July 2019
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Over the last years, the issues that are driving the integrated reporting movement have been deeply embedded in the development of global financial markets. They reflect the fundamental shift from industrial to service-based economies in developed countries, where intangible assets have moved from 20 percent to over 80 percent of the value of public companies.
This shift to value creation based on intangibles, technology and intellectual capital is further reinforced by the stewardship principles adopted in recent years by institutional investors (including the giant index funds).
Financial reporting regulations have made little progress in addressing these changes. As they take ESG impacts ever more seriously, US investors are urging management and the board to adopt a reporting method that accounts for both tangible and intangible assets. “Integrated reporting” is such a method: it provides a framework that highlights all the ways a company creates and will continue to create value.
Recent research by Sustainable Investment Institute (Si2) into the current state of integrated reporting at S&P 500 companies shows that while there has been some uptick in this area, reporting is still nascent for public companies as they try to address the confusion about the differences among sustainability, ESG, and integrated reporting.
The “Emergence of Integrated Reporting” outline lately released by The Conference Board - to which Morrow Sodali’s Chairman, John Wilcox, contributed - outlines the rationale for and critical elements of integrated reporting. In addition, it describes audiences, debunks myths, addresses challenges, and summarizes recommendations.
Read the entire report.
This shift to value creation based on intangibles, technology and intellectual capital is further reinforced by the stewardship principles adopted in recent years by institutional investors (including the giant index funds).
Financial reporting regulations have made little progress in addressing these changes. As they take ESG impacts ever more seriously, US investors are urging management and the board to adopt a reporting method that accounts for both tangible and intangible assets. “Integrated reporting” is such a method: it provides a framework that highlights all the ways a company creates and will continue to create value.
Recent research by Sustainable Investment Institute (Si2) into the current state of integrated reporting at S&P 500 companies shows that while there has been some uptick in this area, reporting is still nascent for public companies as they try to address the confusion about the differences among sustainability, ESG, and integrated reporting.
The “Emergence of Integrated Reporting” outline lately released by The Conference Board - to which Morrow Sodali’s Chairman, John Wilcox, contributed - outlines the rationale for and critical elements of integrated reporting. In addition, it describes audiences, debunks myths, addresses challenges, and summarizes recommendations.
Read the entire report.
Summary
Over the last years, the issues that are driving the integrated reporting movement have been deeply embedded in the development of global financial markets.
