This week, both GreenBiz.com and CFO.com published blogs about integrated reporting: what is it? what are the benefits? where is it going? GreenBiz.com interviewed Robert Eccles, Professor of Management Practice at Harvard Business School and a driving force on the topic of reforming corporate sustainability reporting over many years, on the aforementioned questions and this is what he had to say…
Eccles points out that sustainability reports are largely ignored by investors because they don’t provide the necessary financial information investors are seeking. But because integrated reports contain both financial and non-financial information about a company, they are likely to be consumed by all stakeholders. Next year, the IIRC will publish its Draft Framework in April with a final version slated for December. While the IIRC is busy developing the overall structure for integrated reporting, SASB will be developing the standards that can be used for reporting the non-financial information in an integrated report.
Eccles concludes by saying that while the federal government is and should be responsible for mandating ESG reporting and disclosures, he doesn’t think it will happen anytime soon. It’s likely that more and more companies will produce integrated reports on a voluntary basis over the next few years. And, hopefully, companies will be more sophisticated in how they leverage the Internet to make integrated reporting interactive and engaging for stakeholders as a two-way dialogue.
The article on CFO.com entitled “The Value of Sustainability”, expands upon the IIRC’s Pilot Programme and some of its participating companies, such as Clorox, Coca-Cola and Microsoft. A key takeaway from this article comes from Mike Krzus, who says that “CFO involvement is critical to moving forward with integrated reporting. Having the CFO involved in or heading up the integrated reporting effort gives it a level of credibility that publicly traded companies may not have found in having separate sustainability groups.”
All of this being said, what do you think the future holds for integrated reporting? Do you think it’s the right course of action for companies vs. strict sustainability reporting? How quickly will it take off (if at all)? We want to hear your thoughts!
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Statement from the most senior decision-maker of the organization about relevance of sustainability to the organization and the organization’s strategy for addressing sustainability
Name of the organization
Primary brands, products, and services
Location of organization’s headquarters
Number of countries where the organization operates, and names of countries with significant operations or that are specifically relevant to the sustainability topics covered in the report
Nature of ownership and legal form
Scale of the reporting organization
Total workforce by employment type, employment contract, and region, broken down by gender
Percentage of total employees covered by collective bargaining agreements
Description of the organization’s supply chain
Significant changes during the reporting period regarding organization's size, structure, ownership, or supply chain
Whether and how the precautionary approach or principle is addressed by the organization
Externally developed economic, environmental, and social charters, principles, or other initiatives to which the organization subscribes or endorses
Memberships in associations and/or national/international advocacy organizations
Entities included in the organization consolidated financial and nonfinancial reports
Process for defining report content
Material aspects identified in the process for defining report content
For each material aspect, the aspect boundary within the organization
For each material aspect, the aspect boundary outside the organization
Explanation of the effect of and reasons for any restatements of information provided in earlier reports
Significant changes from previous reporting periods in the scope and aspect boundaries
List of stakeholder groups engaged by the organization
The basis for identification and selection of stakeholders with whom to engage
The organization’s approach to stakeholder engagement, including frequency of engagement by type and by stakeholder group, and an indication of whether any of the engagement was undertaken specifically as part of the report preparation process
Key topics and concerns that have been raised through stakeholder engagement, and how the organization has responded to those key topics and concerns, including through its reporting. Report the stakeholder groups that raised each of the key topics and concerns
Date of most recent previous report
Contact point for questions regarding the report or its contents
‘In accordance’ option and GRI Content Index
Policy and current practice with regard to seeking external assurance for the report
Governance structure of organization, including committees of the highest governance body
The organization’s values, principles, standards, and norms of behavior such as codes of conduct and codes of ethics
Disclosure on Management Approach for Aspect
Coverage of the organization’s defined benefit plan obligations.
Financial assistance received from government.
Significant indirect economic impacts, including the extent of impacts.
Total number and rates of new employee hires and employee turnover by age group, gender and region.
Average hours of training per year per employee, by gender and by employee category.
Percentage of employees receiving regular performance and career development reviews, by gender and by employee category.