What Happens in Practice?

IFAC (International Federation of Accountants), the Global Reporting Initiative (GRI), and The Prince’s Accounting for Sustainability Project have recently formed the International Integrated Reporting Committee (IIRC). The IIRC is intends to provide a reporting framework that shifts the emphasis from short-term financial performance to the long-term consequences of decision making. This framework will provide a means for systematically reporting of environmental and social factors and thus allow management to do the following:

  • Include the interconnections among environmental, social, governance, and financial factors in decisions through clarification of the link between sustainability and economic value;
  • Use this information to make decisions as to how to run the business on a day-to-day basis. (KPMG, 2010)