Integrated Reporting Reaches Milestone, But US Unimpressed

The integrated reporting movement is picking up steam, with the Deutsche Börse Group announcing that it has become the first stock exchange – and the 100th business overall – to join a pilot program run by the International Integrated Reporting Council.

The Deutsche Börse Group has about 765 listed companies with a combined market cap of €1.185 trillion. The addition of such a major financial player to the IIRC pilot program – which is designed to test and help develop an integrated reporting framework – undoubtedly helps IIRC’s cause. Council chief executive Paul Druckman said the stock exchange’s participation shows the speed with which IR is gaining momentum in capital markets.

But looking over the list of pilot companies, one fact is clear: IIRC isn’t gaining much traction in the US. As of July 19, there were only seven American pilot participants: Microsoft, Prudential, Clorox, Coca-Cola, Jones Lang LaSalle, PR company Edelman, and mining and metals firm Cliffs Natural Resources.

The Association of Chartered Certified Accountants has pointed to one factor that may be holding back IR adoption. The ACCA said IIRC should provide case studies of best practices across a range of organizations. Without this, understanding of the IR movement has been low.

In its response to IIRC’s framework draft, released in April, the ACCA also says the plans are “right in principle,” but gaps in the framework remain. The association said there is an unclear relationship between the integrated report and other forms of reporting, such as sustainability and statutory narrative reports. The framework also needs to address how hard preparers should strive to keep down the size of reports, ACCA said.

Tamar Wilner is Senior Editor at Environmental Leader PRO.

Picture credit: Deutsche Börse Group