The IA indicates that its members have “expressed concerns over how companies are reporting on the long-term drivers of value creation and productive enterprise”.  Further it comments that “while our members need to be able to assess a company’s likely return on invested capital, and want to understand the balance of expenditures required to support productivity improvements, they [have] noted that this is difficult in practice”.  The IA notes that although the quality of company reporting has increased “additional effort is required so that our members are better able to identify and finance those companies contributing productive growth in the UK economy”.     

The guidance is intended to set out the IA’s members’ expectations in the areas of:

• Business models and long-term reporting – outlining members’ expectations on clear and concise business model disclosures, and companies adopting a longer-term approach in their reporting to shareholders.
• Productivity – outlining members’ expectations on how companies should report on the drivers of productivity within their business.
• Capital management – outlining members’ expectations on capital management disclosures, and how companies can improve reporting on the connection between capital management and its long-term strategy.
• Disclosure of material environmental and social risks – outlining the disclosures that members would expect to see included within the Annual Report.
• Human capital and culture – outlining members’ expectations as to how companies should report on human capital and nature. 

The IA indicates that the guidance will “allow investors to better identify, support, and finance companies that deliver long-term returns to shareholders, contribute towards long-term economic growth, and help build a more productive economy”.  

The press release and guidance are available on the IA website.