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Robert Eccles is a Senior Lecturer at Harvard Business School. He does research on corporate reporting, and has written three books on the subject, including his latest "One Report: Integrated[…]

What will ultimately drive business to prioritize sustainability?

Question:rn What will be the ultimate driver toward an embraced approach to rnintegrated reporting? 

Robert Eccles: Initially I rnthink it will be, leadership will come from the corporate community. As Irn mentioned, there’s already 15 or 20 companies, admittedly a very few, rnbut interest is high. I haven’t met a single company that I’ve talked torn that thinks it’s a bad idea, they’re not sure they are ready to do it rnor they want to be leaders, so I think the first step that we’ll see is rnleading companies in the corporate communities, starting to issue rnintegrated reports, that will get visibility, they will be seen as rndeveloping the new best practices. I think closely related to that is rnthe large pension funds, which we were talking about encouraging rncompanies to do so, even putting pressure on companies to do so. The NGOrn community, the stakeholder community, when I did the research for my rnbook, I wasn’t sure if they would support integrated reporting, or they rnwanted to continue to have separate sustainability reports, they’re veryrn supportive of this and so I think you’ll see the NGO’s that have been rnputting pressure on companies for separate sustainability reporting rnstarting to call for integrated reporting. 

But ultimately, just rnto be clear, I think this needs to be done by regulation, I don’t think rnit should be done immediately, I think we need time to experiment, learnrn what’s involved, but if you’re going to have a sustainable society, rnvirtually all your companies need to be framing what they’re doing in rnterms of a sustainable strategy with integrated reporting being a key rntool for that, it’s not the silver bullet, that alone won’t do it, but rnit is certainly a key tool for doing that. And I would see that rnhappening initially country by country, it could be required by the SEC rnhere, suggesting that companies provide non-financial information in thern MDNA, because that’s under the regulatory authority of the SEC. It has rnalready happened in South Africa, through King III, Marvin King, a very rnwell known corporate governance expert, who you probably know, produced arn report calling for integrated reporting every listed on the rnJohannesburg Stock Exchange starting July 1st has to produce an rnintegrated report. The French National Assembly is voting on this in rnMay, I’m told. I’m not fluent in French, so I’m not able to check that rnout myself. The Prince of Wales, accounting for sustainability project, rnis in the process of organizing an international integrated reporting rncommittee. It will have a steering committee, a working group, rnrepresented on the steering committee will be all the big accounting rnfirms, major corporations, corporate groups, NGO’s, investor, investor rngroups, that will clearly create a lot of visibility. 

So, what Irn think will happen over the next year is that awareness will grow, rnunderstanding will grow about integrated reporting, more and more rncompanies will practice it, more and more investors and stakeholders rnwill encourage it, and I can’t predict the future, four years, five rnyears from now, you’ll start to see legislation on a country-by-country rnbasis. And I’m guessing, I’m hoping, that a decade from now, this will rnbe the required practice all over the world.
Recordedrn on April 19, 2010