Integrated Reporting & Investor Relations Collaboration: A Momentous Step for Investor Confidence and Capital Markets

Posted
3 December, 2020

Integrated Reporting Turkey Network (ERTA) continues to progress with a domino effect triggered by its strategic partnerships and goal-oriented collaborations and to add value. Being aware that collaboration and the synergy of collaboration will be one of the most important requirements to achieve 2030 Sustainable Development Goals, ERTA carries out sustainable activities that will have a substantial impact in order to ensure the development of an integrated thinking and integrated reporting approach in cooperation with the public sector, regulatory bodies, private sector, NGOs and all other strategic partners.

A first in the world: IR & IR Platform

In line with an integrated reporting approach providing a common language between investors and corporations, Integrated Reporting Turkey Network introduced the IR & IR (Integrated Reporting & Investor Relations) Platform in cooperation with the Turkish Investor Relations Society (TUYID) with a view to raising awareness among both investors and corporations and to improve the reporting experience of corporations. The IR & IR Platform aims to guide the corporations in terms of expectations, assessment criteria and integrated reporting in a manner to allow the investors and companies to create a “common language”.

Today, investors investigate the association between the environmental, social and governance performance of corporations along with their financial data in order to understand their relation with risks and opportunities, and expect corporations to report this information in an integrated manner and share information about their value creation process. Integrated reports are becoming one the most popular tools for corporations as they provide investors with this information.

A common language and a qualified communication

While it is essential for companies to be transparent about their environmental, social and governance practices, it is equally important for them to be aware of what information the investors expect companies to disclose and how this information is used during their evaluation process. It is also vital for investors to be transparent about their analysis methods. A “qualified relationship” between the parties is possible only with this common approach. To that end, IR & IR platform was established with the aim of raising awareness in order to develop a thinking and reporting system to meet the common requirements and expectations of investors and companies, the key stakeholders guiding corporate reporting, and guiding and supporting them through this procedure.

A bridge between investors and companies

This Platform aims to ensure that the integrated reporting system based on integrated thinking approach is adopted by the companies, allowing them to improve their internal dynamics and increase the quality of their reporting. Through this means, it becomes possible to improve the communication between investors and companies creating a bridge between them, and contribute to the development of companies, investor institutions and the capital market and enhancement of investors’ trust.

New CMB Regulation “Sustainability Principles Compliance Framework”

Another significant development for investors and publicly-traded companies in Turkey has been the issuance of a regulation by the Capital Markets Board (CMB), encouraging companies to adopt an integrated reporting approach as a result of the activities of a Task Force also involving ERTA. The “Sustainability Principles Compliance Framework”, published by the Capital Markets Board, requires companies to disclose the information on their environmental, social and corporate governance in line with the determined principles starting from 2021 on the basis of the “Comply or Explain” approach.

The Regulation Encourages Integrated Reporting

The CMB regulation encourages publicly-traded companies to integrate sustainability into their short-, mid- and long-term decision making processes and to report these processes. Requiring the disclosure of this information simultaneously with the annual reports, this regulation offers the preparation of a “single report” as the most practical solution for companies. Within this framework, “Integrated Annual Report” stands out as the most appropriate reporting channel to meet this requirement.

It is of vital importance to guide the corporations in terms of expectations, assessment criteria and reporting during the transition process in a manner to allow the investors and companies to communicate with each other through a “common language”. At this point, the IR & IR Platform aims to create a bridge between investors and the Investor Relations units and management of companies strengthening their communication, and enhance the companies’ experience in the field of integrated reporting, which offers an important instrument helping them create an active dialogue with investors.