Global perspectives

Frank Klein

IIRC Council Member

Managing Director, DWS;

Member of the Executive Management Committee, European Federation of Financial Analysts Societies

When I think about the IIRC at the very beginning, it is always Rotterdam that comes to my mind. In 2010, the IIRC invited us to Rotterdam for a broad brainstorming session on how integrated reporting could work and what we, from an investors’ point of view, would expect from it.

So we went to Rotterdam and I had the chance to contribute the investor’s view to the working groups. We argued that it is all about materiality, transparency and integrated thinking. What did that mean?

Integrated thinking was the starting point because every day CEOs came to DWS; and showed us their Corporate Social Responsibility reports, explaining that sustainability was on top of their agenda, but after a few questions, which just scratched the surface, we realized that most of it was just marketing and it all lacked the concept of integrated thinking from the top.

Transparency was most obviously not given because you were missing the connectivity and transparency of reports in those days, and the senior executives even at board level could not really give a stringent narrative of their business, as far as sustainability was concerned.

Last but definitely not least materiality was not familiar to most of them, as the company story was more about general strategy and sometimes even opportunistic moves to gain market share and improve margins, rather than what were the most important factors driving corporate strategy. So it was not that easy to come back to them, referring to the most important and real material factors which determined the company’s success or failure.

For an investor it was really key, even in 2010, to get an exact idea about what was important to steer the company and allocate resources accordingly.

Over the years, and with milestones like the International <IR> Framework, the IIRC was established as one of the leading genuine global reporting initiatives and well respected from corporates and investors alike.

Where do we go from here?

At the moment there are too many global initiatives, so the right step is to join forces with existing peer groups and “stir the pot” together. In the wake of the European Taxonomy, sustainable finance is gaining momentum globally. Therefore, we are well advised to follow suit and set sail for the next stage of the global reporting “regatta”.

We should all strive for a better and sustainable way in a combined effort to save resources globally, and report accordingly.

We are already looking forward to supporting the IIRC in the same way in the decade to come as we have done from the very beginning in the last decade.