Historically, annually reviewing and reporting the success of a business has been through an annual financial report – profit and loss and balance sheet figures – and much more financial data besides. A change in thinking though has led to growing recognition globally that the range of issues and opportunities affecting long-term business performance and value is much broader than can be reflected in a set of current year financial measures. Increasingly, businesses are expected to report not just on their profitability: an acknowledgement that business is not just about money!
Integrated Reporting gives a ‘dashboard’ view of an organisation’s activities and performance in a broader context, which:
- provides a concise and holistic communication of an organisation’s strategy, governance and performance
- demonstrates the links between its financial performance and the wider social, environmental and economic context
- shows how businesses create value over short, medium and long term.
It is suggested that Integrated Reporting provides a more effective platform, upon which to plan and develop the future of a business:
- Integrated Reporting demonstrates the linkages between an organisation’s strategy, governance and financial performance and the social, environmental and economic context within which it operates.
- By reinforcing these connections, Integrated Reporting can help business to take more sustainable decisions and enable investors and other stakeholders to understand how an organisation is really performing.
- An Integrated Report should be a single report which is the organisation’s primary report – in most jurisdictions the Annual Report or equivalent.
Central to Integrated Reporting is the challenge facing organisations to create and sustain value in the short, medium and longer term. Each element of an Integrated Report should provide insights into all aspects of an organisation’s current and future performance.
By addressing the material issues for an organisation, in a manner beyond a financial analysis, an Integrated Report should demonstrate in a clear and concise manner a business’s capacity to grow, holistically – how, when, where and why.
