Sustainable value creation through integrated reporting

In March (previous post), we highlighted the growing relevance of integrated reporting as a means of providing clarity and reassurance to investors. The integrated report brings your company’s financial strategy, clearly linked to your corporate and social responsibility commitments, together in a holistic way that best tells your value creation story.

More widespread in Europe and actually a requirement in South Africa, the approach is beginning to take hold in North America. Since March, Eli Lilly and Cisco have published integrated reports, joining a growing number of U.S. companies that include GE, Jones Lang LaSalle, Prudential Financial and Clorox.

The majority of the information contained in an integrated report isn’t new. It’s already spread about in your investor presentations, CSR report and proxy. The key action is to gather the information in a timely manner so that it is available before your annual meeting.

The starting point

Following are some recommendations to producing readable and relevant integrated reports:

  • Start modest. If your company isn’t ready for an integrated approach, transform the letter from your Chairman/CEO in your proxy statement to present more information on your strategy, business model, governance overview, sustainability and compensation. It will be of interest to and appreciated by your investors.
  • Choose a short format. Succinctness is appreciated by your audience. There’s also no need to create additional information. Look at it not as another report but rather as part of a hybrid approach, complementing your 10-K and proxy statement. It should be presented as a structured, synthetic and useful document that sheds additional light on the company’s strategic objectives.
  • Meet investor and analyst expectations. While this document may be of interest to stakeholders, it should focus on helping investors assess the company through a key question: what are the strategic elements that enable the company to create value?

As September approaches, now is the time to start planning for your first integrated report. Take a look at what leading companies are already doing and you’ll see that it’s not complicated. Most importantly, you’ll be preparing to respond to investor demands in a changing environment that is rapidly becoming the benchmark for effective shareholder communication.

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