The reach of the International Integrated Reporting Council (IIRC) increased by more than half during 2016, according to the body’s annual report.
The IIRC also celebrated bringing on board China’s Ministry of Finance as a council member. However, the IIRC noted that it would have to do more to spread the message of integrated reporting in the US, despite General Electric attracting much media attention at the beginning of the year by publishing it first integrated report.
The IIRC’s report said that “with the exception of a pioneering few, North American uptake of our framework remained low. Here, too, we will re-focus our efforts in 2017.”
The IIRC has, however, doubled the number of best practice examples available on its website.
Richard Howitt, chief executive of the IIRC, said: “During 2016 the reach of our <IR> networks increased by 58%, enabling us to reach and support increasing numbers of businesses on their journey towards Integrated Reporting.
“Nearly doubling the number of good practice examples and developing a global ‘training offer’ are crucial to showing that adoption of integrated reporting is about improving quality as well as numbers.”
The IIRC said it was still in a “breakthrough phase” and would continue to work towards global acceptance of integrated reporting.
However, the report said that there were still challenges to face along the way, including resources to address the complexity of market players across the world.
“In spite of the real progress we have made in 2016, we accept the scale of the challenge we have set ourselves,” said the report. “With so many important capital markets players, initiatives and developments across the globe with which we would like to actively engage, our resource constraints limit our capacity.
“The complexity of the corporate reporting system remains an obstacle to better reporting, underlining the importance of the continued work of the Corporate Reporting Dialogue.
“And whilst investors are increasingly engaged, it will take time to bring about real behavioural change that builds the bridge between better reporting and better capital allocation.”
The Corporate Reporting Dialogue is a project set up by the IIRC in 2014 in response to calls for “greater coherence, consistency and comparability between corporate reporting frameworks, standards and related requirements.”
Integrated reporting was given a boost by a reference in the annual letter of Larry Fink, chief executive of BlackRock, the world’s largest fund manager, in which he “urged CEOs to each year lay out ‘a strategic framework for long-term value creation'”.
Financial organisation the CFA Institute also endorsed the work of the IIRC, writing in a letter published in the Financial Times that integrated reporting was a “vehicle” for reporting on value creation.