18th January 2017

Integrated ReportingThe need for harmonizing reportingframeworks in India

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Yasir AhmadPartner

Responsible Business Advisory

The context for holistic reporting on business performance

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74%of CEO’s think thatmeasuring total non-financial impactscontributes to longterm success

PwC’s CEO Survey 2017

PwC

Comparative view of different reporting frameworks

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Financial Reporting Sustainability Reporting Integrated Reporting

Contains

Information onfinancial performanceincluding P&Lstatements etc.

Information managingkey environmental andsocial issues

Info on long term valuecreation by taking anintegrated approachto both traditional risksand sustainability risks

Orientation Backward lookingBackward and forwardlooking

Backward and forwardlooking

Boundary

Compliance withregulations andstandards to informinvestors

Beyond compliancetowards best practicesand greatertransparency on ESGperformance

Inputs, impacts andoutcomes across thevalue chain

Standardsand

frameworks

Financial AccountingStandards Board,General AcceptedAccountingProcedures (IASB, IFRS)

Global ReportingInitiative, UnitedNations GlobalCompact, NVGs

InternationalIntegrated ReportingCouncil (IIRC), SASB

Key trends in corporate reporting and disclosures

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• Expect more regulations on non-financial disclosures of businessperformance

• There is a move towards integration between financial and non-financial reporting

• Data will be digital and technology will enable companies to access,collate, check, analyze, correlate and report in a highlyintegrated way

• Future reports are likely to focus on relevance, context and impact,not just statistics on performance indicators

• SDG linkages have emerged as a clear trend in corporateresponsibility reporting

PwC

Increase in sustainability reporting instruments

Countries with reporting instrumentsthat require sustainability disclosures

India has more than 10 reporting instruments that require companies to discloseinformation on sustainability aspects

Source: “Carrots and Sticks: Global trends in sustainability reporting, regulation and policy”

PwC

Most companies in India in India have non financialdisclosures responsibility disclosures in their annual financialreporting framework

6Source: https://home.kpmg.com/xx/en/home/campaigns/2017/10/survey-of-corporate-responsibility-reporting-2017.html

PwC

IFC’sEnvironmental and Social

PerformanceStandardslaunched

HazardousWaste

Managementand Handling

Rulesimplemented

in India

SEBI mandatesBusiness

ResponsibilityReporting (BRR)for top 100 listed

companies

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Evolution of corporate reporting for Indian businesses

2013

2017

2006

20142011

2016

2015

GRIlaunched

the G3Guidelines

onsustainability

reporting

GRI G3.1Guidelinesreleased

IIIRC launchedIntegratedReporting

Framework

GlobalReporting

Initiatives GRIG4 Guidelines

The CompaniesAct 2013 (India)mandates 2% of

profits to bedirected towards

CSR

BRR mandate isextended tothe top 500

listedcompanies

SEBIpublishes

circular onIntegratedReporting

2003UNGC’sGlobal

CompactNetwork

India wasformed

The corporate reporting landscape in India has been evolving at arapid pace in recent years with new non-financial disclosurerequirements being mandated by regulators….

MCA launchesthe National

VoluntaryGuidelines on

Social,Environmentaland EconomicResponsibilities

of Business

E-WasteManagement

Rules, 2016implemented

in India

2012

2008

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Too many voluntary reporting frameworks to choose from…

PwC

Snapshot of typical reporting requirements in India

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Mandatory

• Annual financial statements

• Director’s report

• Corporate governance report

• Business Responsibility Report

• Environmental Statement – Form V

• Report on Waste Management – Form IV

• Annual Report on E-waste - CPCB

Voluntary

• Global Reporting Initiative (GRI)

• United Nations Global Compact (UNGC)

• Carbon Disclosure Project (CDP)

• Dow Jones Sustainability Index (DJSI)

• Sustainable Development Goals (SDGs)

• Integrated Reporting (IR)

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Challenges faced by Indian businesses…

• Too many reporting frameworks, which are often overlapping andcomplimentary requirements, leading to reporting fatigue

• Reporting is often seen as an exercise in public relations rather than atool for corporate transformation

• Reporting has become a mundane and mechanical task, where datais simply compiled at the end of the year and input into various reportingformats

• Even leaders in reporting are cautious about disclosing sustainabilityaspects

• Absence of proactive interest or feedback from users of thesustainability-related information such as consumers and governments

• Dependency on a regulatory regime for disclosure mandatesrather than business case driven voluntary approach

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Moving to an integrated approach for corporate reporting- a stepping stone towards integrated decision making

An integrated approach to corporate reporting must include disclosures on abroader range of measures, including relevant financial and non-financialaspects that contribute to long-term value creation.

AnnualReport

FinancialReport

DirectorsManagementCommentary

CorporateGovernance

Report

SustainabilityReport

IntegratedReport

Integration

In the future, an integrated report could eventually replace existing corporatereports.

PwC

Developing a skeleton for integrated reporting customizedto the Indian context

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Organisational overview & business model

Operating context (ie.risks and opportunities)

Stretegic objective

Corporate governance and remuneration

Triple-bottom-line performence

Future outlook

IntegratedReport

Annual Report

GRI

UNGC

CPCB Report(ie Form IV/V)

BRR

CDP

SDG

Ma

nd

ato

ryV

olu

nta

ry

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Exploring linkages for integrated reporting in India

INTEGRATEDREPORTING

Organizationaloverview and

business model

Operatingcontext

(risks andopportunities)

Strategicobjectives

Corporategovernance andremuneration

Financialperformance

Non-financialperformance

(ESG)Future outlook

Annual FinancialReport

X X X X X X

CPCB Reports (FormIV/V)

X

BusinessResponsibility Report

X X

GRI G4/Standards X X X X X

United NationsGlobal Compact

X X

Carbon DisclosureProject

X X X

SustainableDevelopment Goals

X X X X X

RobeccoSAM/DJSI X X X X X X

The principles of relevance, stakeholder inclusiveness and materiality may be used todefine the specific content of the report

PwC

The way forward

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• Greater alignment and consistency of reporting standards andframeworks should make it easier for companies to address the needs ofall their stakeholders.

• Exploring a roadmap for India on integrated reporting, whichmeets various regulatory reporting requirements and aligns to internationalstandards will reduce the need for compiling multiple reports.

PwC

Thank you

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