If I have one major gripe about Integrated Reporting, it’s the name. Yes, it includes reporting which is integrated, but it’s so much more than that. In this age of sound bites and slogans, the essence of a concept needs to be captured in the headline. In this case the label does a disservice to an innovative and ambitious approach to sustainability.
So, what is there to Integrated Reporting beyond integrated reporting? Here are a few points to start with:
1. It makes sustainability core business.
Any large organisation has built assets - offices, shop fronts or warehouses - which use energy and water. It will also have employees who might donate time or money to charity, and some proportion are likely to be female. This information usually ends up in the annual sustainability report. At Kinesis, we think this is a good thing. Kinesis has been helping businesses and councils understand and report on their asset emissions and resource consumption for 7 years, and we have recently started to incorporate employee and other social datasets into our tools. For most organisations however, this is not core business. For example, in the latest LBG (London Benchmarking Group) figures measuring the impact of member’s community investments, contributions amounted to 0.17% of total revenue. We are not arguing that this proportion should be higher or lower, but it demonstrates there is a much larger piece of the puzzle to be addressed. Sustainability needs to shift from the periphery to the core of an organisation. This ultimately means changing an organisation’s main focus from “how can we make money” to “how can we make money AND make the world a better place” (or at least not a worse place). I may be idealistic but I’d like to think that the best business strategies will excel at both. How does an organisation answer this question? See Point 2.
2. It puts integrated thinking before integrated reporting.
There’s not much point in getting a mark for maths if you don’t take the classes. Sounds obvious, but how many organisations actually engage in integrated thinking before producing what they call an integrated report? Integrated thinking means considering all material issues which impact and are impacted by your organisation and stakeholders when devising strategy and making business decisions, with the goal of optimising outcomes for all parties. This includes the triple bottom line of financial, environmental and social factors, and range of stakeholders including shareholders, employees, customers and the community within which an organisation operates. Further to that, it’s not just the issues in isolation which need to be understood, but their interactions with each other over the short, medium and long term. Only once all this is done can we start to articulate the process and outcomes in an integrated report.
3. It encourages the use of technology.
Integrated Reporting is pretty prescriptive when it comes to technology. Integrated Reports should be online, concise and interactive, allowing readers easy access to key messages at a glance, along with the ability to drill down into the parts which are particularly relevant for them for further detail. This means much more than a downloadable pdf or a static web page. Technology is not only relevant to reporting. Integrated thinking is best supported by software which allows for the collection, analysis and distillation of disparate data sets.
I’ll wrap up with a final point which is our mantra at Kinesis - it turns insight into action. Ever since the launch of the pilot several years ago, there has been a lot of talk about Integrated Reporting, but few organisations are yet to demonstrate true leadership in this space. Kinesis is excited to be embarking on the development of a truly integrated reporting platform with one of Australia’s largest listed developers. We hope this is our opportunity to walk the walk and help embed some of these characteristics that sit behind the name.
For more information on Integrated Reporting, go to http://www.theiirc.org/.
By Julie Young, Sustainability Consultant