FDs waiting to see who "pulls the trigger first" on integrated reporting

BUSINESSES are hesitant about adopting integrated reporting with finance directors waiting to see how the project develops before making decisions about changing their reporting model, accounting institute ACCA has said.

According to research based on a survey of 200 CFOs and senior finance professionals, 93% of investors support the concept of integrated reporting but most organisations are yet to adopt the model.

In essence, integrated reporting <IR> aims to create more concise reporting that better communicates to investors how the business creates value over time, by taking into account a host of non-financial aspects to the business.

Only a small minority, 4.5%, of CFOs said their company has already published an integrated report, although many of them planned to do so in the near future with around 40% actively taking steps to introduce the model in the next few years.

Just 10% said they had no intention of adopting the reporting model.

“On the face of it, what our research has shown is that when it comes to <IR>the finance profession is less enthusiastic about it than investors,” said Ewan Willars, director of policy at ACCA.”There is an element of seeing who pulls the <IR> trigger first amongst the finance professional community.

“CFOs are telling us that they do see the benefits of integrated reporting, not just presenting the company as an advocate of sustainability, but helping to align the company’s risks with its opportunities. Companies with an emphasis on longer-term investors are especially likely to see implementing integrated reporting as a priority.