IIA urges greater assurance on reporting environmental and social impacts
A 2017 deadline for large companies to publish a wide range of non-financial information has increased its relevance to boards, IIA says
THE CHARTERED INSTITUTE OF INTERNAL AUDITORS (IIA) has called for the wider uptake of “rigorous assurance” on companies’ reporting of environmental and social impacts.
The body made its plea as it believes investors are becoming increasingly concerned about how reporting on information relates to the environment, human rights, diversity and anti-corruption measures.
Ian Peters, IIA chief executive said: “The move towards reporting non-financial information poses obvious challenges for companies; it requires them to bring together information on what may be disparate parts of the
“Organisations need to ensure that the right things are measured, and that the systems are in place to capture the data needed. But more than that, the public needs to know that the non-financial information being reported is fit for
“Internal auditors possess a broad view across the entire business. They are ideally placed to offer a comprehensive view of how an organisation manages its resources and to provide assurance on data integrity. As companies respond to demands for more non-financial information, internal audit needs to play a central role.”
An EU directive has set a 2017 deadline for large companies to start publishing a wide range of non-financial information is pushing such information further up the boardroom agenda – and internal auditors are well-placed to provide assurance to boards on such matters, it posits.
The IIA highlights how international retailer M&S has already announced its intention to publish a fully integrated annual report – which aims to aims to examine the connections between financial, environmental and social impacts of an organisation to give a more complete picture of its sustainability and long term value – within the next two years.
In 2013, the UK government introduced new rules under the Companies Act requiring all listed companies to produce a strategic report covering a wide range of non-financial information.
The IIA says integrated reporting is now increasingly viewed by companies as a sound way of ensuring compliance with the new regulatory demands, enhancing business performance and improving stakeholder engagement.
Its report also flags up powerful West End real estate player, The Crown Estate, as having first published an integrated report in 2013, while also name-checking global brewing giant SABMiller for the key role its chief internal auditor played in responding to requirements laid out in the UK Corporate Governance Code for annual reports to include a more holistic view of company threats.
It also praised electronics behemoth Phillips for for being an early adopter of the trend having embracied the discipline of integrated annual reporting since 2008.
