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Can accountants save the planet? The answer to this question is "yes", or at least "probably", according to Professor Mervyn King, Chairman of the International Integrated Reporting Council. His claim is founded in the belief that companies are increasingly expected by their stakeholders to create value in a responsible and sustainable way. This is the ethos behind the Integrated Reporting movement, which calls on reporting entities to embed integrated thinking, focus on measuring and reporting on value creation rather than just profit, and consider the wider impact of corporate activities, aiming for sustainability of business practices.

The Integrated Reporting movement is undoubtedly gaining momentum. Research has shown that companies using Integrated Reporting can expect to see better understanding of business opportunities and risks, improvements in decision making, and more collaborative thinking about targets and goals by the board1. From the perspective of users of company reports, 92% of investors agree that financial and non-financial information should be more integrated2.

In his new book, Chief Value Officer: Accountants Can Save the Planet, Professor King argues that the Chief Financial Officer, with the support of accounting and finance teams, is ideally and possibly uniquely placed to drive forward integrated thinking and reporting and enhance sustainable value creation. In fact, he suggests that the CFO should be renamed as the CVO – the Chief Value Officer – placing the emphasis on the monitoring and management of value rather than finance within an organisation.

The contributions that the CFO/CVO can make to the integrated reporting process are numerous, and include establishing systems and controls, setting and monitoring key performance indicators (both financial and non-financial), providing a focal point across the various business functions which need to enhance their connectivity, and liaising with external providers with the objective of obtaining assurance on the integrated report itself.

The issue that that few people in the position of CFO/CVO have had any formal training in integrated reporting, and their own focus is likely to remain on the financial aspects as this is the legacy of years of training and experience in financial matters. There needs to be proper commitment from reporting organisations to support the CFO/CVO in this area, to support training and encourage debate on the benefits and problems of establishing integrated reporting. The role of the CVO needs careful definition, and perhaps it should not be combined with the CFO role, to allow some segregation of duty in the reporting process. Overworked CFOs will not relish the idea of having to embrace integrated reporting if it is just added to a list of existing responsibilities and there is no real integration of the roles.

If accountants are to save the planet then they need to be supported in this noble quest.

[1] PwC Implementing Integrated Reporting http://www.pwc.com/gx/en/services/audit-assurance/publications/implementing-integrated-reporting.html
[2] ACCA What Do Investors Expect from Non-financial Reporting http://www.accaglobal.com/content/dam/acca/global/PDF-technical/sustainability-reporting/tech-tp-wdir.pdf

  1. Antoinette M
    Posted 14-Jun-2020 at
    Certainly the way forward.
    0
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