The last few years has seen the worst global economic crisis since the 1930s - a crisis that was in part driven by focus on short-term profits and rewards at the expense of long-term sustainability. It has demonstrated the need for capital market decision-making to reflect long-term considerations and has called into question the extent to which corporate reporting disclosures, as they exist today, highlight systematic risks to business sufficiently. 

The threats posed to the long-term interests of business, investors, societies and the planet are real and decisions taken in tackling these issues need to be based on clear and comprehensive information. It is becoming the norm for companies to produce what are commonly termed sustainability, corporate social responsibility (CSR) or corporate governance reports in order to communicate to their stakeholders on environmental, social, governance and risk issues.

"Integrated reporting" is the term increasingly used to describe the alignment of business reporting with sustainability performance and business value. The premise is that corporate responsibility activities should not be conducted in isolation from the rest of the business. Environmental, social and governance issues are having an increasing impact on companies' ability to operate with long-term viability and generate a profit. The specific issues with the most potential to influence business value - positively or negatively - depend on the industry sector, the geographic scope and the nature of the individual business. Investors, shareholders and other stakeholders have most interest in understanding how these issues link to strategy and the future value of the business.

It is within this context that Integrated Reporting was the subject of a recent roundtable workshop held jointly by the Pearl Initiative, the Centre for Responsible Business at Dubai Chamber of Commerce & Industry, the Institute of Chartered Accountants England and Wales, and the Institute of Chartered Accountants of India.

Around thirty five senior finance, accounting, compliance and governance professionals participated in the interactive workshop session. Questions were discussed and debated in areas such as existing reporting practices, challenges to the adoption of integrated reporting and current trends in corporate disclosure.

Expert input on the global track towards integrated reporting was given by Matty Yates of the Accounting for Sustainability (A4S) project of HRH The Prince of Wales in the UK. In the Prince's own words, A4S was established "to help ensure that we are not battling to meet 21st century challenges with, at best, 20th century decision making and reporting systems".  Pearl Initiative, the private-sector led organisation developed in cooperation with the United Nations Office for Partnerships to promote transparency, accountability and good business practices in the GCC, is partnering with A4S to improve the understanding and application of integrated reporting in the Gulf region. Narayanan Rajagopalan of Abraaj Capital shared his company's experience of producing its first integrated report, and Andrew Robinson of KPMG gave input on his experience as an expert advisor to clients in this area.

It was generally agreed that there are particular factors that should be taken into account in progressing the adoption of integrated reporting in this part of the world. For example, the bulk of the region's economic activity is with family firms, privately-held companies and small/ medium-sized enterprises - which do not so far generally face requirements to produce financial reports. But, as at the start of any journey, it is important to build the foundations for the path ahead, and in this case that means raising awareness, communicating the value created and sharing good practices. At the end of the day, better communication between companies and investors will enhance access to markets, corporate reputation and the long-term viability of the business.

Written by Imelda Dunlop, Executive Director, Pearl Initiative - the private-sector led organisation developed in cooperation with the United Nations Office for Partnerships to promote transparency, accountability and good business practices in the GCC.