The “evolution of the corporate reporting structure is too slow”
By Michelle Perry | Published 12:45, 20 May 11
Indeed David Philips, senior corporate reporting partner in the assurance practice at PwC and a contributor to a new report out this week, has been one of the most vocal in the profession on the need for greater, faster change in financial and non-financial reporting.
Back in 2001 Phillips called for breathing space from regulators to allow companies to experiment with different reporting models. He told me: “Forward thinking companies are beginning to see information as delivering competitive advantage. Beyond financial performance, companies are communicating information on their market place, their strategy and the intangibles and other non-financial data that are lead indicators of the future performance of the business. This information simply does not exist in traditional financial statements.”
The report “Tomorrow’s Corporate Reporting” compiled by PwC, CIMA and think tank Tomorrow’s company, acknowledges that the “evolution of the CRS [corporate reporting structure] is too slow”.
Professor Mervyn E King, deputy chairman of the International Integrated Reporting Committee (IIRC) set up last July, says in the report: “The world has accepted that people, planet and profit are inextricably intertwined.
“No company in developing its strategy can overlook financial, human, natural, social, manufactured and technological capital aspects.”
Although the report to re-engage in the debate on the future of corporate reporting is welcomed, it doesn’t go far enough in calling for a clear timeframe and offering recommendations. Until someone is prepared to put their head above the parapet and demand change I fear little will happen for another decade.
That said however, I was heartened this week on the news that Puma, the sportswear company, was publishing a pioneering environmental profit and loss account. PUMA’s overall environmental impact was valued at ‚¬94.4m (£82.7m) for 2010, split almost equally between greenhouse gas emissions and water use. The financial impact of gas emissions, calculated by PwC, totalled ‚¬47m, while water use, calculated by Trucost, was valued at ‚¬47.4m.
This is exactly the kind of action that is needed in this area. Perhaps only when the issue is commercialised, as Puma’s initiative hopefully will, will other companies follow suit.