Charles Tilley's closing remarks to the IIRC Global Conference 2020
We end our conference on the day that the United Nations Secretary General Antonio Guterres will say that the world faces a, “moment of truth” on climate – words echoed by the Prince of Wales in his address to us on Monday. But I believe we have shown over these last three days that we are ready, determined and willing to meet that challenge – to, in the words of Peter Bakker at WBCSD yesterday, “scale up” action as we face the multiple and interconnected megatrends that will force The Great Reset referred to by His Royal Highness.
It is hard to think of a moment in past when the world has been so aligned as it is today towards a single global corporate reporting system and, as we heard from Paul Andrews at IOSCO, regulators are prepared to act decisively. Like businesses and investors, they are seeking a global solution.
The context to this conference from the IIRC’s perspective is the enormous energy behind our convergence work this year, which has led to the announcement of our proposed merger with SASB. Barry Melancon set out brilliantly the historical parallels with the evolution of international financial reporting standards that we are seeking to replicate – albeit in an accelerated timeframe!
I am grateful to all the comments in the plenary sessions and the workstreams in support of this work to bring greater cohesion and simplicity to the corporate reporting landscape. The endorsements from businesses, investors, stock exchanges and other market participants have been extremely encouraging. Some of you may not be aware, but this conference is running concurrently with SASB’s Symposium and the annual A4S meeting, which I think is further evidence of the incredible momentum and energy within the corporate reporting and sustainability communities as we approach the end of 2020!
I said on Monday that we would not have chosen to meet in these circumstances. But I must say that, reflecting on the last three days, we have made a virtue of necessity. I have never seen such an array of speakers from different disciplines, sectors and markets speaking with powerful conviction about the need for integrated thinking and reporting principles and the difference they are making in practice – in your countries, in your businesses. We have heard from countries such as Italy, Turkey, India and and the African continent how the business case for integrated reporting is accepted by the market and the task now is to deepen the measurement processes and strengthen the knowledge across the business. Integrated reporting may be a global trend, but we have learnt so much from these individual examples and insights and events like this can help the IIRC to reflect real practice and market needs in our strategy and work programmes.
If I could pull out three themes from the discussions over the last three days, they would be:
- Trust. The importance of trusted businesses and institutions has been heightened by the Covid-19 pandemic. Transparency of KPIs (with an emphasis on the ‘K’) can help enhance trust in businesses, especially where this is balanced by honesty about performance and impact (a point reinforced by the <IR> Framework review’s new emphasis on value creation, preservation and erosion).
- The business case is now established. Peter Bakker made the point powerfully that, “More sustainable businesses should attract a lower cost of capital” and that now the need is for an optimal system to make capitalism create sustainable value over the long term. Integration is a critical part of that journey.
- No business is an island. Business is a social organism and dependent on a moral licence to operate from the societies that buy its products and services, supply it and are the source of its employees. One of the Indian panellists talked about spirituality as being a central tenet of integrated reporting and an accompanying mindset of gratitude for the resources provided by the planet and people which sustain a business.
This third point reminds me of one of Mervyn King’s mantras – that business is part of society and not apart from society. Integrated thinking and reporting is a reflection of that fact. I am delighted to be sharing this final session of the conference with Mervyn, who has been an inspiration to many of us for such a long time, and will continue to be so as a Chair Emeritus of the new Value Reporting Foundation, alongside Michael Bloomberg.
We face the future with optimism because of the innovation, boldness and public interest that has been on display this week. I am optimistic most of all because, over the last ten years, we have worked to develop and adopt a framework whose principles and concepts are not just fit for today’s business – they are necessary for the future of our economy and society.