Global President of the Association of Chartered Certified Accountants (ACCA), Joseph Owolabi, has warned that businesses which fail to adopt a robust integrated reporting approach risk paying a hefty price in the long-run.
Speaking at a Business Leaders’ Forum organised by the Association under the theme Integrated financial reporting – a framework for compliance and decision support, Mr. Owolabi stressed the importance of embracing integrated reporting as a means of providing comprehensive and transparent information to stakeholders.
According to him, businesses that do not adopt integrated reporting risk facing a range of negative consequences – including increased regulatory scrutiny, reputational damage and even financial losses. He emphasised that integrated reporting can help companies build trust with stakeholders by providing a more complete picture of their activities, performance and impact.
“Integrated reporting is no longer an option for businesses. It’s essential for building trust and credibility with stakeholders. We know that cost is often cited as a potential constraint; but when you think of cost, you must as well think of the cost of not doing it,” ACCA’s Global President added.
He highlighted some of the key benefits of integrated reporting: including improved decision-making, enhanced risk management, and increased accountability. He also encouraged businesses to seek guidance and support from the Association and other professional bodies in implementing integrated reporting practices.
“Integrated reporting is not just about ticking a box or meeting regulatory requirements. It’s about creating value and driving sustainable performance. We urge businesses to take this seriously and work with us to ensure that they are able to fully embrace integrated reporting and its benefits,” he noted.
The Director responsible for sub-Saharan Africa at ACCA, Jamil Ampomah, said while integrated reporting – which he described as “a tool for telling the entire story” – could see businesses attract investments, its benefits will accrue to the wider ecosystem.
“It is not just about investments, it is also about other stakeholders like government, employees and society at large. It presents a better way of telling the entire story, which makes us more sustainable,” he explained.
Integrated reporting has gained traction over the last decade, since the International Integrated Reporting Council’s founding in 2010 and later the Value Reporting Foundation in 2021.
On the continent, the African Integrated Reporting Council (AIRC) coming into play in 2017 – with Nigeria, South Africa, Mauritius and Kenya at the forefront of Council activities – has contributed to its growing importance. While Ghana is not currently on the Council, ACCA’s Director for SSA is optimistic that recent developments on the local scene, coupled with activities of his outfit, will drive adoption.
“One of the objectives is to ensure that as many countries as possible come on board, as we are approaching the point where there will be standards which mandate integrated reporting,” Mr. Ampomah said, adding that the ACCA is looking forward to involvement by other stakeholders in the drive toward more comprehensive reporting.
Already, the International Finance Corporation (IFC) recently launched an Integrated Environmental, Social and Governance (ESG) programme in the country that aims to develop better ESG standards for financial institutions and businesses. The programme follows a three-pronged approach and will engage with stakeholders at the regulatory, market and firm levels.
As of September 2022, all 23 universal banks in the country had completed and submitted an ESG template under supervision by the Bank of Ghana, with a 53 percent reporting compliance level. In addition, the Ghana Stock Exchange has also launched a guidance manual for ESG reporting for listed companies.
This comes as a PwC report published in 2022 predicts that ESG-focused assets under management (AUM) will more than double to US$10.5trillion in the United States, rise by 53 percent to US$19.6trillion in Europe, and more than triple to US$3.3trillion in the Asia-Pacific (APAC) region – with Africa also expected to see an upsurge.
