Towards sustainable business

What is integratedreporting And how doyou do itPosted on March 3 2014 middot Leave a Comment

This article was first published by the ACCA here and was written by

Dr Carol A Adams FCCA and member of ACCArsquos Global Forum on

Sustainability

If you are confused about what integrated reporting is rest assured you are

not the only one

A lot of people think itrsquos about putting together your financial and

sustainability reports Wrong It is much more than that ndash and much less It

will not replace either a financial or sustainability report ndash both must be in

place for integrated reporting But starting to think about the connections

between the financials the relationships your organisation has with its key

stakeholders and how it makes use of natural resources for a start is a step in

the right direction

Integrated reporting requires thinking about value beyond financial terms ndash a

long overdue development given that around 80 of the value of company is

typically in intangible assets

Building strong relationships with stakeholders building a loyal customer

base developing intellectual capital and managing environmental risks etc

tend to fall off the radar when corporate execs think short term But they are

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times

critical to long term success Integrated reporting keeps the focus on long

term strategy and integrated reports are forward looking documents covering

strategy the context in which it will delivered and how the company has and

will create value for providers of capital and others in the short medium and

long term The International ltIRgt Framework recognises that long term

success depends amongst other things on sound management relationships

a satisfied work force and the availability of natural resources

Much of the information companies are providing to investors is not in their

annual review or financial statements ndash further evidence of the need for

change An integrated report fills some of the gap and allows an organisation

to tell providers of capital and others how it creates value for them

If you asked your colleagues how they would describe your

would they have the same view as you Probably not Many corporate execs

think about their business model in narrow financial terms or from the

perspective about the bit of the business they are responsible for But if the

senior exec work together in conceptualising the business model and start to

think about inputs and outcomes in broader terms a different picture about

what needs to be managed and what adds value emerges

The six capitals concept is intended to facilitate this broader thinking about

value and the business model The ACCA has been at the forefront of its

development coordinating the work of the IIRCrsquos Technical Collaboration

Group on the Capitals and funding my involvement

Some companies are taking a first step towards integrated reporting by getting

their financial and sustainability people working together This is

advantageous in that accountants could better understand social and

environmental risks and their impact on reputation and the bottom line whilst

sustainability teams need to develop skills in making a business case for their

work But the integrated thinking that goes behind integrated reporting needs

to involve all the senior exec And the Board

Leadership (7)

Materiality (7)

Natural capital (10)

Report review (9)

SAMPJ (9)

Social capital (4)

Stakeholder

engagement (7)

Sustainability reporting

(37)

Universities (11)

Keep intouch

CarolrsquosBooksAccountability Social

Responsibility and

Sustainability

Understanding

Integrated Reporting

The Concise Guide to

Integrated Thinking

and the Future of

Corporate Reporting

If you would like to know more about integrated

reporting see some examples of good reporting

practice and speak with some peers about the

challenges and benefits register for the Master

Class in London on March 14th hosted by the

ACCA You will hear from Eileen Rae Director-

Finance ACCA and Jonathan Labrey

Communications Director at the International

Integrated Reporting Council (IIRC) Eileen will

discuss the preparation of the ACCArsquos

second integrated report A copy of

Understanding Integrated Reporting the concise guide to integrated thinking

and the future of corporate reporting will also be given to participants

You can read more about the Master Class here

Related Posts

Filed Under Events amp presentations Integrated reporting

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Copyright copy 2013 Carol Adams