In a follow-on to an earlier article featured here, Paul Thompson writes on the International Federation of Accountants site How Can SMEs Implement Integrated Reporting? A Starter Kit.

The article suggests three scenarios where integrated reporting can be of help:

1. Seeking a Buyer
   
2. Seeking a Contract
   
3. Seeking Financing
   

In The Case for SMEs to Consider Integrated Thinking and Reporting on the International Federation of Accountants knowledge site, Paul Thompson explains why it's a natural fit:

But unlike many larger companies, SMEs often have the latitude to take a long-term view and pursue objectives above and beyond simply profit. Many SMEs are run by owner managers who see business as integral to and a reflection of their lifestyle and values. This lends itself to a way of thinking, and corresponding reporting, that stresses the long term over the short term, the future over the past, and principles over profit.

The article discusses two broad categories of benefits for SMEs: improved management and improved external communications. 

Read the article 

The title of this article is actually less positive: US lags behind Europe and Canada on ESG Integration but the content includes some good news: 

Between January and July 30, there were several proxy voting landmarks, with State Street voting against the election of directors at 400 companies without female board representation, and Blackrock, Vanguard and Fidelity voting in favor of shareholder proposals related to climate change – ultimately leading to ExxonMobil, Occidental and PPL Corporation being defeated at the ballot.

But only half (49 percent) of US institutions surveyed by RBC Global Asset Management use ESG principles as part of their investment approach, compared with 85 percent of institutions in Europe and 73 percent in Canada.

Integrated Reporting is on the rise in the U.S. Learn more and join the conversation at our next meeting! Here's our newsletter: Inaugural Community Meeting Thanks to all who attended our inaugural web meeting! We had an engaged discussion that included corporates, investors, advisors, nonprofits and academics. Sandy Nessing of American Electric Power gave us a great tour of their integrated report. She shared how the report has become a cornerstone of their communications and how they continue to improve the report-production process.  More on AEP's approach in this post and video.  U.S. News Financial Advisor Magazine on the importance of integrated reporting CFO Magazine: Closing the Confidence Gap in Sustainability Data Triple Pundit: Why long-termism matters Accounting Today reviews progress in integrated reporting International News Co-operative Press: Crédit Agricole leads the way on integrated reporting for social impact Acuity Magazine: Integrated Reporting – the future of accounting Board Agenda: Sustainable development means securing the future of business Don't Miss Our Next Web Meeting on 12/13! Prudential Financial  has been part of the International Integrated Reporting Council since its founding in 2010. At our next web meeting, Suzanne Klatt, Director of Environment and Sustainability, will give us a tour of Prudential's latest report and will share insights on the process and results the company has seen from their integrated approach. Our interactive virtual meeting is held at 2 PM EST. Please join us!  More information and registration.

A recent article in Financial Advisor magazine discussed an updated survey by the CFA Institute on Environmental, Social and Governance (ESG) data. The report confirms that "as in 2015, 73 percent of respondents take ESG into account in their investment analysis and decisions." 

But the article goes farther. It quotes Vincent Papa, director, financial reporting policy for CFA Institute on the importance of the work the International Integrated Reporting Council (IIRC) is doing to ensure that companies:

Go beyond providing ESG data in a siloed fashion and incorporate it into a cohesive value creation story in order to Inform investors how this information links to the business strategy, the finances, the risk management of reporting entities, and don’t just detail it in one chapter of an annual report or a separate Corporate Social Responsibility (CSR) report.

ArcelorMittal (featured in our community's list of integrated reporters) recently won an award for its integrated report. From the NWI Times:

ArcelorMittal and the digital communications company Investis also won "Best online annual report" in the Digital Impact Awards.

“This award is recognition of the effort and progress we have made over the past two years on our journey to fully integrated reporting,” said Paul Weigh, ArcelorMittal corporate communications manager.

 

This recent article explains the growing need for reliable sustainability information: 

In a March 2017 State Street study, 92% of institutional investors revealed they want companies to explicitly identify ESG factors that materially impact performance.

Thousands of companies around the world have responded to this investor demand by issuing “sustainability,” “corporate social responsibility,” and “integrated” reports. In some jurisdictions, companies are now required to or are voluntarily providing varying degrees of information on ESG and other sustainability matters in statutory filings.

Yet, additional recent surveys have also revealed a gap in confidence among investors in both the relevance and reliability of the sustainability information reported by companies.

The article includes a link to a new paper by Robert H. Herz, Brad J. Monterio and Jeffrey C. Thomson called, Leveraging the COSO Internal Control—Integrated Framework to Improve Confidence in Sustainability Data.

Good overview by Julia Wilson of the growing attention to long-term strategies  from sources ranging from Blackrock to Nasdaq to CECP. She opens by explaining:

If you were told tomorrow that half of your retirement savings wouldn’t be available to you in 40 years, would you still invest? What if the sound investment decisions you made today eventually collapsed under the collective weight of environmental, social, governance (ESG) factors like climate change and resource scarcity? Protecting ourselves against this possibility means investing today in sustainable solutions that expand the scope of what’s possible.

This new paper from Deutsche Bank reports:

In this note we take a closer look at the relationship between ESG (environmental, social and governance) performance momentum and accountability to stock price performance. Although investors tend to generally look at ESG performance from a longer-term time horizon, recent performance data suggests that ESG is starting to generate alpha even in a shorter-term timeframe. Moreover, our work suggests that ESG-linked compensation has had a positive impact on six sectors within S&P 500 over 3- and 5-year periods.

The latest CPA Journal just published Financial Reporting Issues for Preparers: Highlights from the 16th Annual Baruch College Financial Reporting Conference.

The article focuses on a panel discussion which  included Bob Laux, North American lead for the International Integrated Reporting Council. He is quoted:

CEOs feel that they’re forced into this quarterly earnings game and meeting [Wall Street] expectations, and it’s just not healthy.

Laux also explained the multi-capital model in integrated reporting and notes that, "that leading companies focus on more than just financial capital."

Read the full article