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…

In writing One Report: Integrated Reporting for a Sustainable Strategy with Mike Krzus, they found that some companies were already producing integrated reports. The fact that the idea of integrated reporting had surfaced both in theory and in practice at the same time was a sign. In 2012, all companies listed on the Johannesburg Stock Exchange were required to filed integrated reports on an ‘apply or explain why not’ basis. Ernst & Young recognized the top 10 companies through their Excellence in Integrated Reporting Awards 2012. Also, the International Integrated Reporting Council (IIRC) published its Pilot Programme 2012 Yearbook, to commemorate its first anniversary and report on the results of the program and its 80 participating companies. Recently, the Sustainability Accounting Standards Board (SASB) was established to focus on giving investors the information they want and need on a company’s environmental, social and governance (ESG) performance so they’re able to make critical business decisions.

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!