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Integrated reporting is moving slowly in the United States, but across the pond, more organizations are joining this movement to merge financial, environmental, social and corporate governance data. Late last week Deutsche Börse Group became the 100th organization, and first stock exchange, to participate in the International Integrated Reporting Council (IIRC) pilot program designed to transform corporate reporting. With 765 companies and a combined market capitalization of almost $1.6 trillion dollars, Deutsche Börse’s decision to join the two-year-old IIRC’s Pilot Program Business Network is a big step forward for corporate reporting and transparency.
Deutsche Börse’s addition to this program is not much of a surprise. The exchange has a robust corporate responsibility section on its website, and has already published an integrated report that scored the Global Reporting Initiative (GRI)’s most comprehensive rating, an “A+,” for 2012. So how will integrated reporting benefit in the long run?
It would help if more American firms would participate in the pilot, especially if one of the IIRC’s goals becomes reality: an integrated report with 40 or less pages. We live and work in a world where short attention spans have become the reality and companies have long complained about the cost of creating sustainability reports, let alone integrated reports. Therefore, just about every stakeholder group would benefit from a detailed, holistic, yet concise report long on transparency and relevant data but short, or ideally minus, public relations speak. But of the 100 firms now participating in this project, only seven are American: Cliffs Natural Resources, Edelman, Clorox, Cola-Cola, Prudential, Microsoft and Jones Lang LaSalle. Meanwhile Germany, with a GDP one-fifth the size of the United States, has six companies in the program. The United Kingdom and Brazil lead the pilot program pack with 13 and eight companies, respectively.
Watch for Deutsche Börse to join a small group of stock exchanges to push the boundaries of integrated reporting. In South Africa, the Johannesburg Stock Exchange requires listed companies to issue a combined financial and sustainability report. BM&FBOVESPA in São Paulo, Brazil, now issues annual integrated reports and requires listed companies to disclose information on issues ranging from environmental sustainability to corporate governance—or explain why they will not or cannot. The exchanges in Copenhagen and Kuala Lumpur also have similar rules. And according to business writer Amanda White, other stock exchanges including NASDAQ, the Istanbul Stock Exchange and Egyptian Exchange are developing plans to work with investors and other stakeholder groups to encourage integrated reporting.
If more stock exchanges mandate integrated reporting, naturally such a step would improve disclosures, on all fronts, from publicly traded companies. But the process has got to be seamless for the professionals writing these reports, which is why the IIRC’s work holds much potential as integrated reporting advocates push for measures that not only protect investors, but people and the planet.
Based in Fresno, California, Leon Kaye is the editor of GreenGoPost.com and frequently writes about business sustainability strategy. Leon also contributes to Guardian Sustainable Business; his work has also appeared on Sustainable Brands, Inhabitat and Earth911. You can follow Leon and ask him questions on Twitter or Instagram (greengopost).
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