Integrated Reporting to help businesses access capital at a reasonable cost

September 14th, 2011 by KPMG

Integrated Reporting provides a potential new source of competitive advantage for business in the search for capital at a reasonable cost according to a paper from KPMG, published on 12 September 2011. KPMG’s paper comes as the International Integrated Reporting Committee (IIRC) publishes a Discussion Paper on the future for Integrated Reporting.

Integrated Reporting aims to provide better communication between companies and their capital providers by focusing business reporting on strategy and value creation.

KPMG’s paper, Integrated Reporting: Performance Insight Through Better Business Reporting, provides a practical introduction to Integrated Reporting, what it means for business executives, how the IIRC concepts may be applied and, importantly, how to benefit from innovative reporting.David Matthews, an Audit Partner in KPMG’s UK firm and a member of the IIRC’s working group, said: “Progressive companies should get actively involved in the discussion around Integrated Reporting. It will not all be plain sailing – innovation never is, and is not for the uncommitted. However, the prize for those that get it right is capital at a reasonable cost through a better relationship with investors and the capital markets. It is in everyone’s best interests to make Integrated Reporting work.”

As Integrated Reporting develops, KPMG believes that companies willing to experiment and innovate have the most to gain.

David Matthews said: “As access to finance tightens through challenging market conditions, many companies are re-evaluating the scope of their communications to the capital markets. Providing strategic and forward looking information about the performance and prospects of the company is a powerful way to convince the capital markets of the worthiness of investing in a company.”

The report finds that the potential benefits to businesses of integrated reporting exist on many levels, particularly for CFOs, as well as CEOs and Boards.

Vincent Neate, KPMG’s UK Head of Climate Change & Sustainability, explained the potential benefits to businesses of enhancing sustainability reporting: “The reality for companies is that environmental, social and governance issues are having an increasing impact on their ability to operate and generate profit. As part of its overall objectives, Integrated Reporting recognises that shareholders have a valid interest in understanding how these issues are being managed because of the impact they have on the value and sustainability of the business.”

 

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