Integrating your financial and non-financial performance into a single report
By Eric Hespenheide - July 29, 2010
Integrated reporting is no doubt the wave of the future for sustainability reporting. The recent Global Reporting Initiative (GRI) Conference on Sustainability & Transparency in Amsterdam, only further reiterated this point.
Also termed "One Report" (One Report: Integrated Reporting for a Sustainable Strategy by Robert G. Eccles and Michael P. Krzus), integrated reporting is defined in the simplest terms, as the combining of a company's financial and non-financial information (environmental and social) into a single report.
Although some skeptics see integrated reporting as just the creation of a page intensive and exhaustive document, proponents see it as the opportunity to tie environmental and social sustainability performance to financial performance. In addition, integrated reporting has the opportunity to yield the following benefits:
- Better exposure of a company's sustainability performance against goals, increasing the company’s reputation amongst a wider group of stakeholders;
- Greater visibility into the costs and benefits of a company's non-financial performance; and
- Better information to enable a company make smarter business decisions and develop long term strategy.
For the unconvinced skeptic, perhaps the fact that a growing number of investors are investing in social and environmentally responsible companies further validates the need for integrated reporting. These investors are known as impact investors, investors who seek out investments that will yield both a financial and environment and social responsible return. Companies that can draw the connection between their environmental and social investments to the financial return are sure to attract more investors of the like and increase their bottom line.
From Southwest Airlines to HSBC, corporations both small and large, across the global and across all industries are taking heed of the benefits and issuing integrated reports. With these companies being the front runners, their competitors will soon be sure to follow this growing trend.
For more information on integrated reporting, visit http://www.globalreporting.org/currentpriorities/futuretrends/futuretrendslinks.htm#IntegratedReporting
Eric Hespenheide serves as the Audit and Enterprise Risk Services Global Leader, Sustainability & Climate Change.