G20: a step towards inclusive growth and sustainable development for all

Posted
16 November, 2015

Paul Druckman and Jonathan Labrey argue that Turkey’s G20 Presidency represents a gear change in support for Integrated Reporting among businesses and policymakers

This week in Antalya, Turkey, the leaders of the world’s largest economies will endorse the creation of the World SME Forum (WSF), perhaps the most significant permanent legacy of Turkey’s 2015 Presidency of the G20.  Formed through a partnership between the International Chamber of Commerce and Turkish business organization, TOBB, the WSF will be mandated by the G20 to implement the recommendations of the B20 Task force on SMEs and Entrepreneurship.

The Task Force highlighted Integrated Reporting as leading practice in providing information on SME performance and reducing the riskiness of SME financing.  This is a critical issue as the evidence shows that over 50% of SME applications for trade finance are turned down by banks.  The task force also recommended that the World SME Forum develop tools that enable online access to “fit-for-purpose SME integrated reporting” based on international methodology.

We were delighted to meet with Tunc Uyanic, the new CEO of the WSF in Antalya, to discuss how we might work together to implement these recommendations and we are looking forward to continuing our dialogue with the WSF to develop practical tools and resources to help SMEs gain access to the financial capital they need to grow. We are very grateful for the advocacy of Charles Tilley and Katie Scott-Kurti of CIMA who have championed Integrated Reporting so effectively as part of the task force deliberations.  CIMA brought practical case studies to the table, examples of mid-sized businesses that are using Integrated Reporting to build trust and confidence among stakeholders, including the financial community, to create and sustain value over time.  It is a powerful reminder that what we have developed is universal in its scope – as relevant to growing SMEs as it is to the largest corporates listed on the world’s major stock exchanges.

The theme of Turkey’s G20 Presidency has been inclusiveness and it is a theme that resonates with both of us as we think of the major challenges faced by the world today.  We are pleased that the theme will be continued into China’s Presidency that begins in two weeks’ time.  We are looking forward to discussing China’s G20 and B20 priorities with stakeholders in Beijing and Shanghai in the coming weeks and we will continue to push hard for the continuation of corporate reporting as a cross-cutting theme of the new B20 task forces.  We do hope that Integrated Reporting practitioners and supporters will volunteer to participate in the task forces – we can attest to it being a very rewarding experience.

Inclusiveness is far from empty rhetoric; it is founded in the belief that the economic system must bring benefits to all of society as the best way to achieve sustainable development, improved living standards and investment in critical areas, such as infrastructure.  The topic of infrastructure investment ran through the Summit deliberations as a major theme and Integrated Reporting is recommended in the Infrastructure and Investment Task Force report.  We are keen to ensure the recommendations are implemented; key among them is to undertake a review of corporate reporting so that it becomes more conducive to long-term investment, especially in infrastructure, and to understand the barriers to implementation of Integrated Reporting, country by country. John Stanhope and Michael Bray are powerful advocates within the B20 task force itself, as well as the key agencies such as the new Global Infrastructure Hub, which we hope will grip this agenda in the coming months.

Business leaders were reminded this week that we are living through an era of low growth and growing inequality within G20 nations.  We expect next year the focus on finding practical solutions to support inclusive prosperity will intensify.  The evidence shows that without action to reverse the trend of inequality, growth and development will be put at risk.  It is a theme that Lynn Forester de Rothschild explored in her insightful address to the IIRC’s Convention last week and our own views on inclusiveness can be found in Paul’s Huffington Post blog.

One of the personal rewards of being part of a process like this is the new connections and friendships you make along the way – friendships that will last beyond the individual year of the G20 Presidency.  Yilmaz Argüden, Chairman of ARGE Consulting and B20 Knowledge Partner over the last year, has provided great insight, support and advocacy for high quality corporate reporting to achieve better governance.  In a recent article, Yilmaz wrote, “G20 governments need to focus on creating a regulatory environment where transparency in the public and private sectors is the norm by advocating the adoption of principled business practices…….embrace Integrated Reporting across the economy as the most effective way of improving transparency and building trust, in order to achieve inclusive and sustainable development.”

There is no doubt that, with the support of Yilmaz and other leaders in the B20 process, the cause of better corporate governance and reporting has gained increased profile and taken an important step forward under Turkey’s Presidency.  To achieve the outcome of inclusive prosperity will require a broad-based reporting system to improve the quality of decision-making as well as the accountability of the decision-makers.  As Martin Sorrell, CEO of WPP, said during the B20 Summit, “The biggest issue facing governments and businesses is short-termism and the lack of an integrated communications”.

We believe we are starting to witness a gear change in support for a new way of doing business.  The Sustainable Development Goals have been a vitally important catalyst for getting governments and businesses to think differently, and in a more strategic sense, about how major resource and development issues should be addressed in a coordinated way.  We believe strongly that Integrated Reporting should be part of the toolkit for a new system by helping to provide the framework for this new approach.

We very much look forward to building on our progress during China’s Presidency in the year ahead and then in Germany in 2017.