Position Paper:Unlockingand

revealingthe

intangibーesindeliveringSustai1nable
WICIG1oba

value ofDevelopment

Goals

ーandValueReportingFoundation(VRF)

lnput to ltaly′sPresidency

ofthe

G20 and B20

0ctober2021

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etworkノo′nt′yby 坊 eWor/d ′me//ectm ′の 〆幻仏粕 5et引 用 t如けve(WICI)G/obo

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′deror′ondur ′ng′to/ysPres ′dency

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Valueinthe215tcentury
The

UnitedNations

governmentssocia ーandSustainable

DevelopmentGoals(SDGS)provideaglobalframeworkfor′the private sector andenvironmental

requires investment

needs.

civilsociety to address

Mobilizing′commitment

the world′s interconnectedaction to achieve

and innovation.ln

the17

this pape 仁 two

progress

andconscious

embeddingsimultaneous1"havecomeof intangible va1ue within businesstask which

togethersystemsofgovernanceand

economic
to articu1ate how

and national ーevels,canplayavaluablerolein meetingtheSDGS.

FoundedlntellectuaI Capital lnitiative(W1q)isa

gーoba1networkofcompanies

the World

analysts ′ investors ′the accounting

pro 詑 ssion andcorporatetool

reportingintangibles/intellectual

as

a

key

of

academia

corporate

who

collaborate

governancecapital in the sustainabilityofanorganization

by

Japan

and wICI

and guidanceTheーCI1talyandwICofーFrance)(WIC1

anditaddressesits

activity

to both large companiesandsMES.

Va1ue

ReportingFoundation(VRElntegrated

ReportingCouncilandtheresult of the 」une

Sustainability Accounting

organizationthatoff;ersacomprehensivesuiteofresourcesdesignedto
developtherole′sva1uecreationovertheshort,and long term.WICINetworkis1ocatedinregionalandcountryjurisdictionsworldwide
comprisedinturnofw

in promotingbetter

recognlzーng

midd‑eEuropeadecision‐making

at both the individual businessin 2008,′

global organizationsdedicatedーicinterestmissionofimprovingcorporategovernanceanddisclosuretofacilitate
development

economic

goaーs is anurgent

tothepubsustainableaction bya sharedunderstanding

ofenterprisevalue‑howitiscreated1

2021merger

Standards

Board)isof thelnternationa1
a globalnonprofit

helpbusinessesand′preserved

investors

and eroded.

仇/e seek

the endorsement

encourage

collaborationof Policymakers
and dialogue

andmarkethave committed

hasーed to sustained
the SDGs

and new

the VRF

Provideinterest fromfor the ideas in this PaPer

its PredecessorMi‑lennium

to their imP1ementation,This

useful measurement

unPrecedentedglobal…termva1uecreation.

and communication

thattheseい/e be‑ievethat

andPrinciP1es ′which

revealing

DeveloPment

the va1ueof

WIC1 andtools to suPPortthistransition.

unlockingto the delivery of the Sustainable

PrinciPal resources ′the lnternationallntegrated
Thinking

commitment′W ーCI KPI ConcePt,

andtotherePoningofintangiblesandva1uecreation.WIC1believes

tools are criticalsuccessfactorsforfully

as a contribution′

achievement

WICI′sintellectuaIProPertyincludesthewICI1ntangiblesRePoningFramework
are orientedisDeveloPmentGoals

caPital markets ′newProductstosuPPortfinancing

businessmodelsthatPrioritize‑ong

industry WIC1 ‐KP‑s whichandin thesPiritofSDG17(collaborationandPartnershiP).This

in line with the universal nature oftheSDGS.Unlike
the l93 countries

ParticiPants

Development

Goa1s,ln

RePortingFramework

it believes are critica1successof intangibles

and revea1ingthevalue

Goals. According1y ′the ′intangiblesmissions

turn,theVRF

has three′SASBStandardsandlntegrated

factors ′too ′forthe

as a contribution

ofintangibles

sameto the achievement

aim ofunlockingof theSustainable′of・対 IC1andVRFastheyrelatetotheSDGS′

are fully aligned.

ourvisionforamoreconnectedandcomprehensivecorporatereporting
Evidenceshowsthat corPorate

rePortinginfluences

systembehaviour

but that thePrevailingsystemdisc1osurea‑mostofnecessitystilIPrioritizesfinancialrePortingoverotherformsofrePorting
creation(orerosion)asthe
shaPed.

This meansthat

arebeingmispriced
executed.The
PackagerequiredrisksandoPPortunities

andofchanges

Progress

VRF

share

the view

alreadybeen

on value

rePortingsystemthat corPorate

rnade

for more

rePortingsustainable

at unprecedented

isstill being′andbusiness

Potentialfuturevaluecreationnot

that wi1l create the conditions

has

comPrehensive′strategies′governancesystems′andsignificantinvestmentsin
wIC1andSignificant

connected

modelsbeing oPtimallyreformmustform

Part of ainvestment.

speed,forexannP‑eby theFoundation(undertheoversightoflOSCO)Providinggloba1‑eadershiPasitevaluatesthePotential
establishing

an lnternationaI

Sustainability StandardsofBoard(‑SSB),complemented

1FRS
for

byregional

andiurisdictiona1 innovations,forexamP1ebytheEUandUSSEC,

WIC1andthe VRFare

P1easedwith this increased

continued

inclusion of intangib‑eswithinglobaIい/e would

also encourage

Policymakers

financial caPital combineswith

commitment

and wi1l continuetoadvocate

for thePublicPolicydeveloPments,

to endorse

a multi‐caPital aPProach

tovaluebroaderformsofcaPital(inte1lectual/organizational,human2creation ′where
social andre1ationship, natural andmanufactured)toprovideacom
creationover time,

informationassessedandThis will achieve

integrated

progressofvalueinc1udes intangibles ′is by naturefuturewant

on medium

to remaingreen financeon twoof valuelevels.First ′it will drivethe

thinking within the organizationin relation to other sourcesa greaterfocus

eteandcomprehensivepictureso that theeffectcreation.Secondof one′the broaderview

oriented ′and holistic consideration

connectivity

for the long‐term

products ′sustainable

and

open

up investment

caPital can beofcapitals, which

ofall capitals will enable

and longtermperformance.Thisdisciplinewillattractmore

investedofinvestors who

opportunities

in′for example

infrastructure ′pharmaceuticalsanddigitization

havethepotentialtotransformthelifechancesofpopulationsinlowincome′

techno ーogiesthat
countries(SDGslandlo).

仇/e believethata
a broader

understanding

businessmodels

SDGsandthe

The

range

represented

that promote

financial assets.
encompasssustainab1edevelopmentand

ーes′will achieve

andincreased

investmentinprosperity.

′ social′ environmental′ humanandgovernanceissues

are interconnected.oneimportantfeatureoftheSDGsisthatabusinessoneormoregoals
model.The

byutilizing itsown

skil1sanduniqueinputs into the businesslndeed ′ intangibles

employee′focusingalsoonintangib

creation ′bettercorporategovernanceof business ′ economic

its business

rePortingsystem

modeI

by the 17 SDGs

can contributeto

corporate

ofvaluebusinesswide

throughcomprehensive

today

contributewayofcarryingouteconomic

model

wiーl be varied andnot

a larger shareproductivit"innovation

activity′technologyrof overallvalue

limited tocreationanddesign capacit"reputation

andmodel ′intangibles playasignificantroleinachieving

thestakeholdertrust.

By integrating these factors into the business

SDGS,arnp1ifyingtheneedforforma1izingtheirinnportancewithinthestructureofcorporate
frameworksand

The unique

reportingstandards.

contributionof intangib1e assets to vaーuecreationandsustainabledeve1opment

Unlike assets recognizedinthebalancesheet(suchasfinancialandmanufacturingassets),
can grow

as a result ofthe

integrationof humanactivities. More

importantl 彰 the combination

totally di什erent

from′intangib1es
be purchasedthat in another.

activities over a period

ofintangib‑es

lt is a source

poltfolio′is not easily imitated ′and even′ techniques ′ know‑how

copied.Anothercharacteristicof competitive
ifsomeor organizational

ofintangibles

isthatthey

as they are well tailored to theneedsandfeaturesof

deployable

use inotherbusinessin one companywill

often beadvantage.Anorganization

andprocedures

last longerthantangible′TheBusiness3

andstandardizedtechnology

designsmayintangib1es′ssolutions cancannotbeeasilyassets as long′.lntangiblesarealsooftensubject

to constantinvestment

andmarketThevariousover time ′forexample

intangib1es

can be categorized

as humanlearningand

histor"technolog

capacitylnternationa1

or clients′cooperation

academia.organizational

彰 know ‐how ′teamworkcaPabi1ity

etc. This specific form
lntegrated

capital′organizationalorganization ′s capabi1ity to create va1ue.These′lnte=ectua ー Capital ′ in traditional

philosoph"
R&D

peop1edevelopment‐led innovations.

capital that are criticaーforthe
ca=ed

R&D ′investmentsin

Reportingof intangible

in the VRF′s lnternational

threeareaggregately

capitalincludes

corporate′trustwithbusinesslntegrated′′intellectualcapital ′ in thecapital covers relationshipswith

with the region wherethecompanyoperates

so on. This is encompassed

relational′organizationaldesignandprocedures

capital is named

Framework.Relationa‑

capita ーandReponing

customers
partners andFrameworkas′Social and

Relationshipcapital, ′Businesses

require tangib1e assets to carry out their activities′includingfinancial

capita1s. By adoptinga

multi‐capitalview ′it is possibletosee

unlocktangiblevalueovertheshon
almost′mediumand

processes

are neededwith such a large proportion
to ensurebusinesses

maximized

fromare equipped

ln general ′ intangibles
sustenancecompany

to handle

the full range of resourcescanlast ‑onger

helps to′ithasbeenestimatedthatexpertise ′attention

the opportunities ′and minimizethe

beingaccounted

for bythe

intangible

brand

value

manufactured

inintangibles

for by its brand.Therefore

to maximize

ofva‑ueinvestment

long‐term.Forexample

half the value ofCoca ‐Cola is accounted

governance

how

and

risks′associatedaーone.lnvesting

are essential

inexpertise

toensure

value

be diluted oreventhantangibles ′ but

theycannotsurvivewithout

proper′thecorepartofthecompany

another′sva1uecreation′whicharethemainsourceofvaluecreation

Drawing

on the innovative

company

contributes

capacity of humanto addressing

combinationof resources

Accordingto an analysis donetargets undermay

the 17 SDGs

froman SDG

endeavourby Edmond

havede Rothschi1dclearlinkswith

AM ′some

hea1thandwell‑being/(Goa13)

equality ′(Goa1 5) and ′decentworkandeconomicgrowth
human

where

a

to use its ownintangibles

andaoftheissues

intangibles.Forexample′genderandneedascenario‐termvaluecreation.

in the targetsre ーatedto ′goodwith organizational

is vital in this respect.‑ndirectly′it would

theviewpointof1ong′intangib1es and′arekeyfactorsforpromotingtheSDGS.

includedrelationships

process

dispersed.

SinceattainingtheSDGSinvolvesactivitytocreatenewsourcesofvalueinmanyfields
theircombinationisusedtocreatevalue.

and enhancementactivities,lfacompanyleavesintangiblesinthesituationwherecan easily utilizeorimitatethemandcapitals as components

4

picked up in the 169

the majorityoftheissues′qualityeducation/(Goa14)′(Goa18)havecloseandofintangibles

inthe

evident
contextof

the ‑nternational

日oweVelntegrated

Reportingand VVICI 1ntangibles Reporting

ちeVen ifa sPecific Connection

is notaPParent

Framevvorks.

in a Certain Category

intangib1es can stillplay an essential role in attaining SDGs.Forexample
ensureaccess byal1people

intangibles.Yet ′imaginea
Company′intheCategory′zerohunger

CompanywhichColーectssparefoodsfrom

that gets information

on food shortage

funding ′ virtuaI Currency

or anadvertisingpartnership(Goa117) is Created,

information

about

excessesoffood,shortagefor the success

ofthe

which

business.Some

intangible

Categoryofrelationship

Therefore,morefocusisneededto

highーighttheinstances ′thefu1lvalueofintangiblesneedstobeun

are broadly

devotedto improvementsin

businessproductivit"arewellhere.This

attaches

specificaーly to Goa18,

businesstraditional method

employment

ofsustaining
modelsofdisC1osing′Promote

immediateshort

A1thoughhave

ーocked ′even′slntegratedThinking

and decentworkfora=.

in the Connection

information

aboutainternally′

Principles ′which

suited to makea Contribution

sustainab1eeconomic′

value creation by an organization

rootedofutilizing itsown

intangibles ′ofresources(orCapitals)hasnot

Companydue
orannua

main1yto

been

inherentshortthetermismーfinancial results and prospects

in‐term.

the majority ofthe

been

have passion ′realizingthevision

sustained ′ inclusive andin the system ′resulting in a focus on quarterly reportingtheneededintangibles and attaining

roleofintangib1esin

relevantSDGS.TheVRF

CompanyspecificCapital,tocollect

Capital′who

betweenbefully linked tothe

importanceorbusinessーTtechnologyisneeded

Connection

ifintangibles aretoln spite ofthe

‐

value

the SDGs.

full and productiveneeds

a large annountofdata.

i1lustratesthe necessityofunderstandingthe

growth,network

assupportersforraisingfunds

ーe.Needlesstosa"knowledgeand/or

ThisCase

the gーobal goaーs. ln many

those

byutilizingmlcro

falls underthe′componentsofhumanwithprocessing

or region ′matches

this Case ′ a business

offoods,aswell

andConnection

restaurantsorafoodmodel.‑nfor realizing the nnatching systerln and handlingUn′ock′〃gunrealized

Goa12)seemstoshowlittle′and raisesfundsfordoingso

keypersons

intention and vitalit"areindispensab′thetarget ′endhunger

in a Certain country

and seeds ′transfers the foodtowhereitisrequested

amongstthe.7SDGsareas,slow

value of businesses

to recognize

todaylies in intangibles,regulators

their true importance;whileandfactored them

intotheirdecision ‐makingina

fu=yunlocked′memo/ ′y(andsobydefinitionCannotfinditswaytomarketCapitalisation)

revealedexterno′′ytoinvestors

that unrealized

value intotheirassessmentsof

pointing

out

andadvoCatingnecessity

for their measurement

meaningfulwa

businesses
astheirtrue

and accountants

investors

have

va1uehasnota

ーways

re1evance
and、WACCandfutureCashflows.Since2007of intangibles

reporting.The

5

adventfor value

Creationbeen

一 et ーa one‐andotherstakeholders‑sothatinvestorscanbui1dinformationthenot fully

about′WIC1 has been

andof integratedreportingtheassociatedConfirmedthis

need

for a change

Since 2013

as to the consideration

theVRF(then asthe

and representationlIRC) has beenof intangibles,

advocatingtheimponanceofreportingona‑laspects

ofva1uecreationthroughintegratedreportsinaccordancewiththelnternationallntegrated
Framework.

WICI′s concept

re‑ationshipcapita15of intangibles

withinthefits naturally with‑nternational

Frameworkishowitisdrivingintegrated

descriptionof ′TheBusiness ′‐ in short ′a description

goVernancesystemand

Makingjudgennents

Business ′is one
integration

businessaboutof the re‑evant

descriptionof

designmeeting

theSDGs

creation

potential.on

throughmoreandimportant
SDGS

reportstobe

basedsocial &uponafoundationa1of its strategy ′ resources

preparationof that foundationa‑of Boards

thebusiness

model

integrated

reportasa′material matter ′,play in the company ′s value

is not recognized ′the companycould
the otherintegrated

andFramework.Adistinctive

contributions

within′The Business ′inthe

lf the vital role intangibles

Reporting

human

and

re1ationships ′model.

theof the mostthe intel1ectuaL

lntegrated

contributionofthis

Reportingof Directors tovaluecancreation
becomeprocessli
代 marketcapitalization. Furthe

ifrevealed

itshould

resultingreaterrecognition

andtheir

exposedto

capital markets

of ′Thecreation. The

be specifically drawn

hand ′ifthat vital role is un/ocked

thinking ′and 「eveo′edto

description

out in thecontribution

risksthat harmby managementandin the integrated

toitsva1ue
the Board

report ′itshould

to those focusedonthelessfinancialaspectsoftheSDGS

ofthosecompaniesandthecountriesinwhichthey′
operatefor

unrealized

is atheir contributionstotheSDGS,The

current

situation where

ref‑ectionofthe
fromperspective.Howeve

on the SDGs

promotetheis closely re1ated

reporting

need

what

ofthe

generatedon the company ′s long‐term

Reveo ′′〃g unrea1ized

value

of intangibles‑ntegrated

intangiblevalue

reporting

Reportingmodel

or lesser extent

which

which

is somewhat

constrainedorderto・lnvestorschangethis

andtherefore

the contribution

waystodo so isto adopt

valuecreation ′focusing

bythecompanyto

purposeis integrated
released

6

and

those

situation andvalue creation capabilityofacompany

mostfitsthe

wascreated‑ong‐term′whichof thecompany
a modelon the utilization of its own

reportingis ofun ′ock′〃gand
reponing

in December

needs

reveo ′′〃gunrealized′as set out in thelnternational

2013

to

ofcorporate

createvalue.

‐toolstomeettoday'scorporate

in relation to the SDGs
Framework

systemmoststraightforward

intangibles ′as well as the otherresourcesused

The corporate

is to a greater

is revealedtothem.ln

to highlighttheto the outcomes

SDGS.one

based

じ the

can only reward

SDGS ′weachievingthe

of intangibles

prevailingattitudeofthefinancialsystemfocusingonlyonthefinancialvalue

a short‑term

focusedthe va1ue

and updated

inJanuary2021.

The

Frameworl

intangibles
mediumThe

six Capitals as e1ements

are a c。re component.

and

wIC1

く introduces

The

Framework

also focusesvalue
on value

Creation ′ withincreationwhichover the short ′long ‐term.

G1obaI

Network

beginning.Moreove

has contributed

in 2016WIC1produced

utilized as a guide to the implementation
relates to intangibles. These
companies。f companyt。 the developmentof integratedreporting

the wICI1ntangibles

ReportingFramework。fthe1nternationa‑

Frameworks

are naturallntegrated

companions.

Africa′France

lta
ー"andAustralia

or intention to contribute′itwill beeasierto

to the delivery ofthe SDGs

and to what

Rep 。ningFrameworkcompanies

as it

reporting′TheNetherlands

understandwhich

thethat can be

仇/henintegrated

is widely adopted ′asisalreadythecaseincontextssuchasJapan

from

by

′Southhavethecapability

extent,throughleveragingtheirownintangibles.

Reportingon

Emerging
SDG

Performanceand

forms

they enable

them

ち for investors ′sustainable

their business
investment
advanceresilience′ withtheinvestors ′own

to assess which

growthandin an

can succeedoverthelongerterm.

is a criticallyimportantenab1ing

issue for companies
them

credibility.Thus ′integrated

interms

to respondto
rep 。ningofresp 。nsib1e

isessential

also tointerests′aswe ーlasthoseoftheirbeneficiaries.

ln this situation ′it is appropriate
their ownthat companies

long‐term

communicate

with stakeho ーdersthroughvalue creation strategy based

or available ′including intangibles.lnturn

integrated

on the full range ofresourcesused′thiswill resultin a companyexpressingitscapabilities

intentions towards

contributing

to the SDGs

askgovernmentsto

supportthis

approachisvalue creation‑based。nantforinvestors

companies

repo 代ing envisaged

principles with conviction

reports about

in relation to SDGSof corporatereporting(seefurtherresources)arealsoimp

context ′because

Moreove

Prospects

as well as its actual c。ntribution.That

to corporatereporting′as a very direct and effectivewayto

andis whywe would′whichencompassesintangibles

andPromotetheachievement。ftheSDGS.

Conclusion
い/e believe the ideas outlined in this paper
the threeunderpi
ーlars it has out1ined

the shadow

developmentofthe

is encouraged

ofpeople,planet

Covid‑19

pandemic

andwith the goals of ltaly′sG20Presidency

prosperity.Asthein their communications

world

it is essential that inclusive and′utilizing provensystemsandtoolstoacce1erate

WIC1 and the VRF will continuetheircreationare consistent7

builds itselfout fromsustainableeconomic

progress.

e汗ortsto encouragemorebusinessestofocusonlong
with stakeholders ′based

andon utilizing theirown‐term value
assessment

oftheresources

used ′focusmgon

intangibles,

This paper

isa contribution

to the public policy debate,andweencourageits

with

an

interest in advancing

sustainab1e
Furtherlong‐termvaluecreationandendorsement

theachievementby a‑1thoseof theambitious

developmentagenda,

resources:

lnternationallntegrated

Reporting

Framevvork(released:January2021):

https://integratedreporting.org(wp‑contentZuploadsZ2021/0IAnternationallntegratedReportingFramework.pdf
The1nternational1ntegrated
and Presentation

Reponing

fortheir integrated report which(e,g, lnternationa1lntegrated
standards(SASBStandards

integrated

repon.

The Sustainable

WIC1

assists companies
explains how

Repo 代ing FrameWork,WIC‑
and IFRS)andDevelopnnent

guidance(WICI

in designing a Basis of preparation

they have used thevarious

frameworks

lntangibles Repo 代ing Framework),reportingKPI Concept)in

Goa1s ′integratedthinkingandthe

preparingand

integrated‐content/uploads/2017/09/SDGS

http://integratedreporting.org/wp
reportFramework

presenting

thereport:‐and‐the‐integrated‑

full17.pdf

lntangibles Reporting

http://www.wici

Framework:‐global.com/framework

The wICI ーntangibles Reponing
notstandards

FrameWork′butalongwiththewICI

sets out examp ーe metrics in relation to intangibles.These

KP‑Concept

are′provideusefu‑exampleKplsandguidanceforselecting

KP‑s, Again, a specific linkcanbemadetorelevantSDGS.Accordingly,theuseofWICIKP1salsostrengthens
integrated

reports,

SASBStandards
SASB

Standards

set out

industry‑specific nnetrics for 77

industries in re‑ation to social &relationship and natural capitals′with aspecific link being
e‑ng possible to relevant SDGS,Accordingly
ofSASB

Standards

strengthensintegratedrepo

代s.

下akayukiSumita」aninevv‑CI G1oba ーChairperson

VRFChiefExecutive

8

Guillot
officer′the use