Leading companies put value creation at the heart of reporting across the globe

Source: Black Sun, 23 February 2017

A snapshot of 50 organisations from around the world recognised for their integrated reporting finds that 88% explain their commitment to wider value creation. Latest research by stakeholder communications company Black Sun confirms that integrated reporting is becoming mainstream. Well-known companies such as Aegon, AstraZeneca, Eni, Fujitsu, Takeda, CLP, National Australia Bank and Marks & Spencer set the standard for others to follow.

There is no doubt that integrated reporting is having an impact and becoming the international best practice approach. That impact has varied across regions but regulation emerged as a key driver of progress, with South Africa, the UK and Europe leading the way in adopting the concept. However, integrated reporting in the other two regions examined -Asia/Oceania and Japan- is quickly gathering pace. Overall the report found that organisations are using the <IR> Framework to provide their stakeholders with a more complete and longer-term perspective on strategy, performance and value creation.

Although there is no uniform approach, there is much that can be learnt about the different ways that the <IR> Framework has been embraced and implemented. A clearer purpose, moving beyond just financial value, recognition of the importance of stakeholder relationships, an increased focus on materiality and connectivity of information were just some of the reoccurring themes.  Key findings of the review included:

  • 90% of organisations clearly identify stakeholders
  • 76% of organisations clearly identify material issues
  • 94% of organisations link resources and relationships with either the business model or strategy

Sallie Pilot, Director of Research and Strategy at Black Sun comments: ‘Integrated reporting is most certainly the future direction of reporting and might just provide that crucial tool to drive change in systems and thinking. Integrated reporting has become recognised as a driver of value creation with both internal and external benefits and, in another research piece just published by Black Sun, we found that 83% of C-suite executives believe that adopting integrated reporting and integrated thinking would help deliver success in their organisation’.[1]

Momentum appears to be leading that way. In the last month:

  • The International Federation of Accountants (IFAC) released a paper stating that ‘Integrated Reporting is the way to achieve a more coherent corporate reporting system, fulfilling the need for a single report that provides a fuller picture of organisation’s ability to create value over time.’[2]
  • The joint International Integrated Reporting Council and International Corporate Governance Network conference, held in December, encouraged the adoption of integrated reporting as an information architecture that helps to underpin investor stewardship and good corporate governance.[3]
  • Our own recent Black Sun survey, conducted alongside AICPA, CIMA and the IIRC found widespread desire among C-suite executives to deliver purpose beyond profit, 89%, as well as acknowledging of the benefits of integrated reporting and integrated thinking to help broaden and organisations’ views on value creation to inform judgements needed to best take decisions to create and preserve value.

The world of integrated thinking and reporting looks set for a step change as we head into 2017.

You can request a copy of the research here.