Speaking at the Governance Institute's Corporate Governance forum in Sydney this week, CFSGAM Asia-Pacific head of responsible investment Pablo Berrutti said there is a "certain inevitability" about the need to improve corporate reporting and communication between companies and their stakeholders.
"We are in a rapidly changing world and the reporting today does not actually address many of the issues that we face," said Mr Berrutti.
"We have issues that we never had to grapple with as a society before: global resource constraints, societal issues, and connectivity in terms of networks and social networks that are global in nature," he said.
He highlighted health, environment, poverty and inequality as issues that can influence businesses in "one way or another".
"I’d argue that today's reporting doesn’t actually capture the strategic imperative for companies – big and small – to be able to grapple with some of these issues and what it means for their business, whether it’s at an operational level or a strategic level," said Mr Berrutti.
There are companies looking to integrate financial reporting with 'non-financial' ESG data and demonstrate some "value drivers", he said.
"The UN [Principles for Responsible Investment] have looked at return on equity (or capital) from a productivity, growth and risk management perspective by bringing in sustainability factors," said Mr Berrutti.
He urged the audience to "acknowledge the inevitability [integrated reporting], embrace the change and that way we can start to get a kind of reporting that's fit for purpose".
