GPI experts took part in the IFRS Foundation conference

GPI experts took part in the IFRS Foundation conference

At the end of October, Milan became the center of discussion of the most important issues of financial and ESG reporting. The IFRS Foundation Conference on Integration Thinking and Reporting was held here, organized jointly with the Italian Business Reporting Foundation (O.I.B.R.).

This event brought together experts in the field of corporate governance, finance and sustainable development, who discussed current challenges and ways to bring financial reporting closer to sustainable practices. The conference set an important direction for the formation of a more transparent and responsible business of the future.

In his address, Emmanuel Faber, Chairman of the International Council for Sustainable Development Standards (ISSB), stressed that “Sustainable development should not be a separate function, but should be integrated into every part of the organization, becoming a priority for everyone.”

Faber also recalled that the ISSB was created at the COP26 conference in order to help companies effectively manage the risks and opportunities associated with sustainable development. He noted that the ability to generate cash flows, both in the short and long term, directly depends on the interaction with stakeholders. ISSB standards S1 (General Disclosures Related to Sustainable Development) and S2 (Climate-related Disclosures), integrated into the IFRS framework, play a key role in supporting this process.

According to Faber’s forecasts, “in the next two to three years we will see significant progress towards global harmonization of non-financial reporting standards. Partnerships such as the collaboration between IFRS and the Global Reporting Initiative (GRI) play an important role in this process.”

The topic of the transition from the approach to the standard has become another important part of the discussions. The ISSB S1 and S2 standards symbolize the transition to a more structured approach to sustainability reporting. It’s not just about what companies should disclose, but also how they can better understand and integrate their ESG efforts into their overall strategy and financial statements.

Veronica Poole, a partner at Deloitte, noted that “many companies are beginning to realize the connection between their financial performance and ESG factors. She stressed that integration thinking helps companies perceive ESG not as an additional burden, but as an integral part of their strategy.”

Integration reporting continues to gain momentum, and since 2021, more than 3,000 companies around the world have adopted this approach. However, integration reporting by itself cannot bring the expected effect without integration thinking. These two elements must work together so that companies can integrate sustainability into their day-to-day operations and strategic planning.

The President of the Italian Association of Financial Directors noted that “brand reputation and intellectual property are often valued higher than tangible assets. This trend is partly explained by the growing role of ESG factors. The ability of companies to leverage ESG capabilities and manage associated risks is becoming an important factor in assessing their value and making acquisition decisions.”

Concluding the conference, the participants came to the conclusion that the future of corporate reporting lies in the convergence of financial and sustainable reporting standards. ISSB’s efforts to integrate sustainability into IFRS standards, as well as the growing recognition of the importance of integration thinking, create a powerful platform for building more sustainable business models. In the future, this approach will become not only a standard, but also a necessity for companies seeking long-term success. As more and more organizations adopt integration reporting, the need for global standardization will only increase, which promises greater transparency, responsibility and a deeper understanding of the true factors that determine the value of a business in the long term.

For reference: GPI became part of the IFRS Alliance in October 2024.