Earlier this year Canadian insurer The Co-operators published their first integrated report, joining other co-ops that have started using this emerging practice of corporate reporting. The report provides information on a broad range of issues, not just about backwards-looking financial results.
Explaining why they had chosen this method, president and chief executive, Robert Wesseling, said the approach fell in line with the organisation’s strategy and decision-making.
“The world we’re operating in is changing rapidly,” he added. “This report critically examines how The Co-operators is grappling with emerging issues like more extreme weather, disruptive technologies, economic volatility, shifting demographics and more. Building resiliency in the midst of the complex challenges we face as a society today requires a holistic, collaborative approach.”
The Co-operators is one of the 1,500 organisations around the world are already doing integrated reporting. The approach seeks to give a holistic story of value creation as well as giving an interconnected and clear message about how an organisation will create value over the short, medium and long term.
Related: Credit Agricole leads the way on integrated reporting
A report by the Association of Chartered Certified Accountants (ACCA) highlights some of the benefits mentioned by organisations using integrated reporting, such as more integrated thinking and management, greater clarity on business issues and performance, improved corporate reputation and stakeholder relationships, employee engagement, more efficient reporting and improved gross margins.
According to the report, integrated reporting is about more than corporate reporting: it is fundamentally an approach to managing a business that is based on a clear awareness of the many ways that entities create and destroy value.
Research by the University of Valencia also points out that one in seven co-operative banks now does integrated reporting.
“Co-operatives, perhaps more so than other organisations, have a lot to benefit from doing so, as it enables them to give clarity and more certainty to staff about the future of the organisation, the strategy, and about what each team’s role is in helping to achieve this,” argues Juliet Markham, policy and communications manager at the International Integrated Reporting Council.
The council has set out a framework that outlines the principles and concepts behind integrated reporting for organisations wishing to use this method of reporting.
Ms Markham explains that embarking on the journey towards integrated reporting may seem daunting. “However, it is important to remember that it is a journey – nobody is perfect in year one – and there are clear benefits each year as reporting becomes more advanced,” she said.
The council has collected tips from organisations using integrated reporting on how to get started:
- Ensure you get the executive team and board involved and that they have a clear understanding of what Integrated Reporting is and why the organisation is adopting it. Through them you can agree objectives, governance oversight, and the process, as well as use them to signal commitment.
- Get a senior executive onside to champion the report, provide accountability and leadership.
- Think about the structure and working relationships within the organisation across all those involved in reporting – including financial and other reporting areas.
- Put a task force together from across the business that can provide strategic direction, engage with stakeholders about what information they’d like to see reported on, and liaise with the board. Think about including representatives from various teams in the taskforce such as: strategic planning, stakeholder engagement, corporate communications, sustainability, operations, legal, company secretary, internal audit, and finance.
- Start thinking about your materiality determination process, what your reporting suite might look like as a whole and do a stakeholder
mapping exercise. - Perform a gap analysis to identify what information you need for the integrated report vs what information you currently report on.
- Do some exercises to make sure you are all on the same page – ask everyone on the task force to think about how the organisation creates value for itself and others, what the strategy is, what the business model looks like, what resources and relationships you rely on. How might this change or be affected in the future?
- Identify relevant performance metrics – across the relevant capitals and put in place rigour, clarity and consistency of information against KPIs – and promote a stronger connection between internal and external reporting.
