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Three years after the launch of its framework, the International
Integrated Reporting Council, under new Chief Executive Officer
Richard Howitt, is carrying out a public consultation. George W.
Russell looks at the current state of integrated reporting and its
rate of adoption, attitudes in Hong Kong and how IR competes with
and complements a slew of other reporting options
Illustrations by Kouzou Sakai
On the Wall Street of the 1970s,
“sustainability” referred to a
company’s ability to maintain
earnings growth. By the 1980s, it had
changed to include the future of the planet.
Advocates such as James A. Lee, a park
ranger-turned World Bank executive, and
David Sarokin, an inf luential American
scientist, sought to persuade companies to
consider environmental and social factors
in their financial reports.
By the early 1990s, corporate sustain-
ability had reached the mainstream, with
prominent executives joining organiza-
tions such as the President’s Council on
Sustainable Development in the United
States and the emergence of institutions
such as the Centre for Social and Environ-
mental Accounting Research in the United
Today, the bottom line is still key, but
more companies are taking account of non-
financial metrics in their annual reports.
“The strategic objective... is sustainable
growth in shareholder value over the long
term,” John Slosar, Chairman of Swire
Pacific, wrote in the group’s most recent
annual report. But one of its aims, he
adds, is: “Endeavouring to minimize the
impact... on the environment.”
There are several environmental and
social movements vying for the attention
of preparers of financial reports, from the
Global Reporting Initiative to the Carbon
Disclosure Project. Swire Pacific is one of a
small but growing number of Hong Kong-
listed companies using the International
Integrated Reporting Council framework as
the basis for its financial reporting.
About 1,500 companies worldwide have
switched to integrated reporting as set down
by the IIRC, which on 1 March launched
a two-month global public consultation.
“The IIRC framework is a set of principles
that covers an organization’s value creation
beyond financial and manufacturing capi-
tal,” says Wendy Yung, Founder of Practis-
ing Governance, a consultancy, and a Hong
Kong Institute of CPAs Council Member.
“It’s not just a reporting process,” she says.
“It’s a whole new way of seeing the value
However, only a handful of Asia-Pacific
companies publish reports based on the
IIRC framework, which was developed
in South Africa and is most prevalent in
Europe. So is integrated reporting a largely
Western construct? Calvin Lee Kwan, a
leading advocate of integrated reporting in
Hong Kong, begs to differ.
March 2017 29
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