Distribution Network
Content
The innovative companies that now combine their sustainability report
with their annual financial statement are reaping mainly intangible
benefits rather than concrete gains such as reduced costs.
A qualitative study of integrated reporting has found that direct cost savings tend to be small, although there are staff time efficiencies if annual reporting and sustainability reporting teams are merged. Instead, the main advantages are intangible and internal, such as improved understanding of links between sustainability and business strategy, ‘consistent messaging’ across the business, and better decision-making.
The exploratory study, commissioned by two Canadian banks, Vancity and Citizens Bank, studied 12 companies that have integrated their reporting, and interviewed 14 specialists, including some within reporting companies.
Solstice Sustainability Works, the Canadian consultancy that did the research, says that even some hoped-for intangible benefits were difficult to establish, and that it is ‘too early to tell’ whether integrated reporting will enhance a company’s reputation by communicating its sustainability performance to a wider audience.
However, it discovered that employees and managers are most likely to benefit from integrated reporting, because it improves internal understanding of the business. Some companies found that it also improved the consistency of their overall message. Novo Nordisk claimed its integrated report had allowed it to bring ‘one coherent package’ to its annual meeting, where the chief executive discusses financial results and the chair discusses non-financial subjects.
Many companies that have produced integrated reports say the biggest challenge is managing the sheer volume of information within a tight timetable. Combining the reports can also result in an ‘overly large’ document, yet if some data is left out ‘there is a risk that material sustainability information will be sacrificed because financial content is regulated and tends to take precedence’. One solution is online reporting.
Solstice principal Susan Todd said that, when done well, combining reports in one document ‘makes a statement that there is one holistic story about the business’, but in practice combined reports ‘sometimes look like different stories inexplicably bound in the same volume’. Symptoms of this ‘forced cohabitation’ include messages from the chief executive making ‘only passing reference’ to sustainability, performance highlights showing only financial data, and the ‘compartmentalized presentation’ of social and environmental data.
A qualitative study of integrated reporting has found that direct cost savings tend to be small, although there are staff time efficiencies if annual reporting and sustainability reporting teams are merged. Instead, the main advantages are intangible and internal, such as improved understanding of links between sustainability and business strategy, ‘consistent messaging’ across the business, and better decision-making.
The exploratory study, commissioned by two Canadian banks, Vancity and Citizens Bank, studied 12 companies that have integrated their reporting, and interviewed 14 specialists, including some within reporting companies.
Solstice Sustainability Works, the Canadian consultancy that did the research, says that even some hoped-for intangible benefits were difficult to establish, and that it is ‘too early to tell’ whether integrated reporting will enhance a company’s reputation by communicating its sustainability performance to a wider audience.
However, it discovered that employees and managers are most likely to benefit from integrated reporting, because it improves internal understanding of the business. Some companies found that it also improved the consistency of their overall message. Novo Nordisk claimed its integrated report had allowed it to bring ‘one coherent package’ to its annual meeting, where the chief executive discusses financial results and the chair discusses non-financial subjects.
Many companies that have produced integrated reports say the biggest challenge is managing the sheer volume of information within a tight timetable. Combining the reports can also result in an ‘overly large’ document, yet if some data is left out ‘there is a risk that material sustainability information will be sacrificed because financial content is regulated and tends to take precedence’. One solution is online reporting.
Solstice principal Susan Todd said that, when done well, combining reports in one document ‘makes a statement that there is one holistic story about the business’, but in practice combined reports ‘sometimes look like different stories inexplicably bound in the same volume’. Symptoms of this ‘forced cohabitation’ include messages from the chief executive making ‘only passing reference’ to sustainability, performance highlights showing only financial data, and the ‘compartmentalized presentation’ of social and environmental data.
Super Featured
No
Featured
No