August 1, 2014

Pension Funds and Integrated Reporting: A Progress Report

“Australia’s largest super funds have thrown their support behind a new reporting   system....The Integrated Reporting Pension Funds Network is being taken around the world....”.



The IR Initiative

The International Integrated Reporting (IR) initiative was the subject of our May 2013 Letter titled “The Integrated Reporting Initiative: What’s In It For Pension Funds?” The initiative was formed in 2010 to build a globally-accepted framework to produce clear, comparable information about how business organizations create value over time. Remarkably, IR has come to be supported by leaders across the international corporate, investment, accounting, regulatory, and academic communities. In just three years, the IR initiative has produced a Discussion Paper on integrated reporting (2011), a Prototype Framework for integrative reporting (2012), a Pilot Program made up of a Business Network and an Investor Network (2012), and a detailed Consultation Draft on the proposed IR Framework in early 2013. All this led to the issuance of the International IR Framework in December 2013. 

Our May 2013 Letter encouraged the leadership of the international pension management community to become familiar with the initiative. Not just because it will lead to more useful investor information about how investee corporations are creating value over the short, medium, and longer term, but also because the IR Framework is a useful tool for pension organizations themselves.

In many cases, pension organizations could do a better job informing their own stakeholder groups (i.e., pensioners, workers, employers, investors, regulators, governments) on what they are doing to create value. As their decisions impact future stakeholder groups too, relevant information about these impacts should be conveyed as well.

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