18th January 2017
Integrated ReportingThe need for harmonizing reportingframeworks in India
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Yasir AhmadPartner
Responsible Business Advisory
The context for holistic reporting on business performance
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74%of CEO’s think thatmeasuring total non-financial impactscontributes to longterm success
PwC’s CEO Survey 2017
PwC
Comparative view of different reporting frameworks
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Financial Reporting Sustainability Reporting Integrated Reporting
Contains
Information onfinancial performanceincluding P&Lstatements etc.
Information managingkey environmental andsocial issues
Info on long term valuecreation by taking anintegrated approachto both traditional risksand sustainability risks
Orientation Backward lookingBackward and forwardlooking
Backward and forwardlooking
Boundary
Compliance withregulations andstandards to informinvestors
Beyond compliancetowards best practicesand greatertransparency on ESGperformance
Inputs, impacts andoutcomes across thevalue chain
Standardsand
frameworks
Financial AccountingStandards Board,General AcceptedAccountingProcedures (IASB, IFRS)
Global ReportingInitiative, UnitedNations GlobalCompact, NVGs
InternationalIntegrated ReportingCouncil (IIRC), SASB
Key trends in corporate reporting and disclosures
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• Expect more regulations on non-financial disclosures of businessperformance
• There is a move towards integration between financial and non-financial reporting
• Data will be digital and technology will enable companies to access,collate, check, analyze, correlate and report in a highlyintegrated way
• Future reports are likely to focus on relevance, context and impact,not just statistics on performance indicators
• SDG linkages have emerged as a clear trend in corporateresponsibility reporting
PwC
Increase in sustainability reporting instruments
Countries with reporting instrumentsthat require sustainability disclosures
India has more than 10 reporting instruments that require companies to discloseinformation on sustainability aspects
Source: “Carrots and Sticks: Global trends in sustainability reporting, regulation and policy”
PwC
Most companies in India in India have non financialdisclosures responsibility disclosures in their annual financialreporting framework
6Source: https://home.kpmg.com/xx/en/home/campaigns/2017/10/survey-of-corporate-responsibility-reporting-2017.html
PwC
IFC’sEnvironmental and Social
PerformanceStandardslaunched
HazardousWaste
Managementand Handling
Rulesimplemented
in India
SEBI mandatesBusiness
ResponsibilityReporting (BRR)for top 100 listed
companies
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Evolution of corporate reporting for Indian businesses
2013
2017
2006
20142011
2016
2015
GRIlaunched
the G3Guidelines
onsustainability
reporting
GRI G3.1Guidelinesreleased
IIIRC launchedIntegratedReporting
Framework
GlobalReporting
Initiatives GRIG4 Guidelines
The CompaniesAct 2013 (India)mandates 2% of
profits to bedirected towards
CSR
BRR mandate isextended tothe top 500
listedcompanies
SEBIpublishes
circular onIntegratedReporting
2003UNGC’sGlobal
CompactNetwork
India wasformed
The corporate reporting landscape in India has been evolving at arapid pace in recent years with new non-financial disclosurerequirements being mandated by regulators….
MCA launchesthe National
VoluntaryGuidelines on
Social,Environmentaland EconomicResponsibilities
of Business
E-WasteManagement
Rules, 2016implemented
in India
2012
2008
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Too many voluntary reporting frameworks to choose from…
PwC
Snapshot of typical reporting requirements in India
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Mandatory
• Annual financial statements
• Director’s report
• Corporate governance report
• Business Responsibility Report
• Environmental Statement – Form V
• Report on Waste Management – Form IV
• Annual Report on E-waste - CPCB
Voluntary
• Global Reporting Initiative (GRI)
• United Nations Global Compact (UNGC)
• Carbon Disclosure Project (CDP)
• Dow Jones Sustainability Index (DJSI)
• Sustainable Development Goals (SDGs)
• Integrated Reporting (IR)
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Challenges faced by Indian businesses…
• Too many reporting frameworks, which are often overlapping andcomplimentary requirements, leading to reporting fatigue
• Reporting is often seen as an exercise in public relations rather than atool for corporate transformation
• Reporting has become a mundane and mechanical task, where datais simply compiled at the end of the year and input into various reportingformats
• Even leaders in reporting are cautious about disclosing sustainabilityaspects
• Absence of proactive interest or feedback from users of thesustainability-related information such as consumers and governments
• Dependency on a regulatory regime for disclosure mandatesrather than business case driven voluntary approach
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Moving to an integrated approach for corporate reporting- a stepping stone towards integrated decision making
An integrated approach to corporate reporting must include disclosures on abroader range of measures, including relevant financial and non-financialaspects that contribute to long-term value creation.
AnnualReport
FinancialReport
DirectorsManagementCommentary
CorporateGovernance
Report
SustainabilityReport
IntegratedReport
Integration
In the future, an integrated report could eventually replace existing corporatereports.
PwC
Developing a skeleton for integrated reporting customizedto the Indian context
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Organisational overview & business model
Operating context (ie.risks and opportunities)
Stretegic objective
Corporate governance and remuneration
Triple-bottom-line performence
Future outlook
IntegratedReport
Annual Report
GRI
UNGC
CPCB Report(ie Form IV/V)
BRR
CDP
SDG
Ma
nd
ato
ryV
olu
nta
ry
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Exploring linkages for integrated reporting in India
INTEGRATEDREPORTING
Organizationaloverview and
business model
Operatingcontext
(risks andopportunities)
Strategicobjectives
Corporategovernance andremuneration
Financialperformance
Non-financialperformance
(ESG)Future outlook
Annual FinancialReport
X X X X X X
CPCB Reports (FormIV/V)
X
BusinessResponsibility Report
X X
GRI G4/Standards X X X X X
United NationsGlobal Compact
X X
Carbon DisclosureProject
X X X
SustainableDevelopment Goals
X X X X X
RobeccoSAM/DJSI X X X X X X
The principles of relevance, stakeholder inclusiveness and materiality may be used todefine the specific content of the report
PwC
The way forward
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• Greater alignment and consistency of reporting standards andframeworks should make it easier for companies to address the needs ofall their stakeholders.
• Exploring a roadmap for India on integrated reporting, whichmeets various regulatory reporting requirements and aligns to internationalstandards will reduce the need for compiling multiple reports.
PwC
Thank you
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