Global Compact International Yearbook Ausgabe 2013

Agenda
Integrated ISO 26000 Reporting
formed with such a comprehensive approach in strategic and
operational decisions. Ultimately, it is a topic with implications
for the management, steering, governance, and culture
of an organization.
Q: A status quo analysis based on the outcome of such questions may
be the first step on the road to implementing an integrated reporting
approach. Which standards have to be applied?
Despite increasing attention on and application of integrated
reporting, there is still no common mandatory reporting
standard. The only exception so far is South Africa, where
companies listed on the Johannesburg stock exchange have
to provide an annual integrated report – or explain why they
have not – according to the King III Code of Governance Principles.
The IIRC consultation draft, published in April 2013,
offers fundamental principles for a new corporate reporting
framework, including content elements and guiding principles
as well as the “six capitals” approach in order to describe
value creation. Furthermore, the IIRC issued three background
papers on materiality, business model, and capitals, providing
preparers with a clear idea of how a good integrated report
should look. Maybe the final standard to be published in December
2013 will become mandatory one day. Nevertheless,
we think that the principles of good reporting included in the
IIRC framework can be applied regardless of specific regulation.
In addition, we already see various reporting examples that
reflect the ideas of integrated reporting very well and thus
offer organizations that are aiming to move toward integrated
reporting a foundation to build upon.
Q: Is an integrated report a “one size fits all” solution?
In essence, an integrated report should tell the story of the
company. This includes historical financial information as
well as information that is forward-looking, explains the
company’s strategic direction, and discusses targets, risks, and
opportunities to be addressed. The structure and length of the
report thus depend on the complexity of the company’s business.
However, the report should focus only on the matters
that the organization considers most material for its value
creation. This again leaves room for a different understanding
of the scope of reporting and will lead to diversity in
integrated reporting practices. Therefore, the development
of supplementary guidelines for a consistent application of
the IIRC framework will be crucial to assure comparability
among preparers.
Due to the numerous existing regulatory reporting requirements,
it is currently not realistic to call for replacing existing
regulated information with an integrated report in the short
term. Therefore, the IIRC rather refers to adding this information.
However, as one of the goals of integrated reporting
is the reduction of current reporting, preparers, users, and
standard-setters should find alternative reporting solutions,
such as including information required by the IIRC framework
into existing reporting, and additionally making use of the
online environment, thereby reducing clutter in the so-called
primary report.
Q: When is my company ready for an integrated report?
In theory, every company can get ready at any time. However,
depending on the size and complexity of an organization as
well as the maturity of its reporting, a move toward integrated
reporting may need longer preparation. Fortunately, many
companies will not need to start the process from scratch,
because they already publish a transparent, investor-oriented
annual report, sustainability information, KPIs, and other
information required for integrated reporting. However, such
information is often not linked to their strategy and business
model. Therefore, moving toward integrated reporting will
mean restructuring the underlying reporting and internal
processes. In some organizations, the structures may be so
complex and fragmented that companies may even consider
establishing a new structure with processes designed specifically
for integrated reporting.
Given the developments and the potential benefits of integrated
reporting, organizations should consider moving toward integrated
reporting in anticipation of regulatory requirements. It
may help them to make a difference as first movers and thus
give them a valuable competitive advantage.
For those who do not yet report on non-financials, integrated
reporting can be an opportunity to move to a more comprehensive
and meaningful reporting that meets future requirements
from the outset.
Q: Is an integrated report an additional document that organizations
need to produce?
According to the IIRC framework, the main output of integrated
reporting seems to be a single report that the IIRC
anticipates will become an organization’s primary report.
Nicolette Behncke is expert for
Integrated Reporting at the Audit and
Assurance Company PwC.
Global Compact International Yearbook 2013 183