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Green
reporting."The way that regulation appears to be developing, over the next ten years there is likely to be an increase in disclosure requirements around sustainability issues," says Susan Holliday, director of IR at Swiss Re. Indeed, reporting requirements around carbon emissions and other environmental metrics are already on the rise, with mandatory carbon reporting on the cards for UK-listed companies from this year, and the introduction of the CRC Energy Efficiency scheme (which includes mandatory emissions disclosure requirements). With investors, pension fund trustees, governments, regulators and the public at large increasingly focused on the private sector's response to climate change, such requirements are undoubtedly set to proliferate in the future.
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IFRS-US GAPP
convergence.Will the US adopt International Financial Reporting Standards (IFRS)? If so, when? And what will this mean for financial communications teams? These remain big, unanswered questions. In July last year, Tommaso Padoa-Schippa, the new chairman of the International Accounting Standards Board (IASB) trustee group, declared that US adoption of IFRS was "highly uncertain". The US Financial Accounting Standards Board and the IASB are supposed to be working towards a US GAAP-IFRS convergence deadline of June. The future of genuinely global reporting standards depends on the two bodies making speedy progress during the coming months. Our view? Speedy progress isn't what these two bodies are known for.
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Pensions
disclosure.This is becoming an area of increasing importance to financial communications departments across the private sector, says John Crosse, head of investor relations at UK-based Severn Trent Water. "There are actuarial assumptions around life expectancy, inflation, wage increases and so on that provide quite significant swings in pension service costs from year to year," he says. "If there was a more straightforward way that we could present pension liability, it would be most helpful for everybody." With the demographic profiles of countries across Europe set to get older during the coming decades, pensions disclosure will remain an issue high on the agenda for investors and analysts.
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Disclosure
overload?An increase in the sheer number of disclosure requirements has been an inescapable trend since the collapse of Enron in 2001 – and it's not a trend running out of steam. For financial communications teams, this has brought mixed blessings. Oliver Maier, head of investor relations and corporate communications at Fresenius Medical Care, is critical of the growing burden of disclosure regulations – and questions the value of some of the new rules to the investment community. "New global disclosure requirements increase the absolute volume of information but do not necessarily increase transparency," he says. "It's my personal belief that information overflow makes it even more difficult sometimes for people to judge the long term." As regulators across the globe seek to ensure that the events that led to the global financial crisis are not repeated, financial communications teams can expect the trend towards more and tighter disclosure requirements to continue. The key to a successful response, says Maier, is to use print and digital channels to communicate the company story clearly and consistently – whatever regulatory changes the future brings. "What is most important is developing a strategic picture of your long-term business model and the key financial factors – and being as transparent as possible. This is the only way to cover 90 per cent of information requirements going forward. The rest is just noise," he concludes.
Risk management: The secrets of success