Revealed: the nine secrets of integrated reporting success

Report authors
portrait_Luke_120xLuke Heilbuth
Head of Strategy
portrait_Romy_120xRomy Morssinkhof
Strategy Associate

Overview

Integrated reporting is becoming mainstream, with adopters across 64 countries (IIRC). But the process can be confusing, even overwhelming. So we’ve identified nine simple steps to help you get started:

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The growing evidence of a link between sustainability and stronger financial returns isn’t really surprising. It’s common sense that a company that adheres to high governance standards, delivers environmentally sustainable products and services, takes care of its staff, and treats customers well, is simply more likely to outperform over the long term.

The graph below, which was inspired by the Future-Fit Business Benchmark, visualises what we at BWD are convinced is inevitable – a future where business finds new ways of delivering financial, social and environmental value at the same time.

The evolution of business

Infographic_evolution-businessThe benefits of integrated reporting

Merging ESG considerations in your core business strategy is known as integrated thinking. An integrated report is the outcome of integrated thinking. The report shows how your company’s strategy, governance, performance and prospects create value over the short, medium and long term.

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The rise of integrated reporting

There is compelling evidence that a holistic view of value creation is needed to achieve business success in the 2020s and beyond. This idea is also known as integrated thinking – the process of understanding of how your activities and relationships work together to create value for your business over time.

An integrated report is the outcome of integrated thinking. Relevant to both internal and external audiences, it outlines how your company’s strategy, governance, performance and prospects create value over the short, medium and long term.

As the International Integrated Reporting <IR> Framework explains, the process of producing an integrated report will help to break down internal silos (e.g. the finance, risk and sustainability teams might cooperate closely for the first time), reduce duplication in your reporting efforts, and help you respond to the expectations of investors.

There’s no obligation to structure your integrated report against the six capitals outlined by the IIRC (financial, manufactured, intellectual, human, social and relationship, and natural). While the capitals are useful in guiding internal thinking about value creation, their academic nature means they don’t necessarily resonate with stakeholders. Our advice is to employ the structure most likely to appeal to your readers.

You can produce a basic integrated report as soon as you commit to integrated thinking, with the aim of improving and enhancing your disclosure over time.

Integrated reporting adopters are now spread across 64 countries, according to the International Integrated Reporting Council’s (IIRC) 2019 annual report. Japan, Singapore, Malaysia, New Zealand and Hong Kong have all witnessed growing rates of adoption, while in Australia, over 70 percent of ASX200 companies embraced at least some of the principles of integrated reporting in 2019 (up from 48 percent in 2018).