Organizations are using Integrated Report <IR> to communicate a clear, concise, integrated story that explains how all of their resources are creating value. <IR> is helping businesses to think holistically about their strategy and plans, make informed decisions and manage key risks to build investor and stakeholder confidence and improve future performance. It is shaped by a diverse coalition including business leaders and investors to drive a global evolution in corporate reporting
About Integrated Reporting
The cycle of integrated thinking and reporting, resulting in efficient and productive capital allocation, will act as a force for financial stability and sustainability aims to:
- Improve the quality of information available to providers of financial capital to enable a more efficient and productive allocation of capital
- Promote a more cohesive and efficient approach to corporate reporting that draws on different reporting strands and communicates the full range of factors that materially affect the ability of an organization to create value over time
- Enhance accountability and stewardship for the broad base of capitals (financial, manufactured, intellectual, human, social and relationship, and natural) and promote understanding of their interdependencies
- Support integrated thinking, decision-making and actions that focus on the creation of value over the short, medium and long term
Realising the benefit of Integrated Reporting
- Improving management information and decision making- Improvements in decision making were largely attributed to changes in management information
- A new approach to stakeholder relations – More evidence of Integrated Reporting having an impact on engagements with external stakeholders
- Connecting departments and broadening perspectives- One of earliest benefits is breaking down silos and increasing respect and understanding between departments
Integrated Reporting can be of even greater benefit
Many of the changes needed to increase the uptake and maturity of – thereby increasing the benefits it provides – need to be driven by organizations themselves. The IR framework helps to enable this work. However, there are important roles for others as well. In particular, investors, auditors and business advisors have important roles to play. Organizations believe that there is additional progress to be made in the use of integrated or connected information in investment models. Most of the organizations that participated in our research see that most investors still analyse information separately.
When investors assess capitals other than financial capital, they usually do so as part of a separate, parallel process. To align processes and increase the robustness of reporting, many organizations increase their investment in nonfinancial assurance services as part of their move . Because financial audits are subject to considerable regulation, evolution toward integrated audits has been slow. For example, one consumer products company that has issued integrated reports for more than five years has sought an integrated audit and assurance statement rather than two separate statements.