The International Integrated Reporting Council: a call to action

by Carol A Adams

Board of Directors

Integrated reporting has the potential to shift corporate thinking

This paper sets out the case for integrated reporting and its potential to change the thinking of corporate actors leading to the further integration of sustainability actions and impacts into corporate strategic planning and decision making. It calls for academics to engage with the process and to contribute to the development of new forms of accountings to help ensure this potential is reached. It suggests areas of further research to facilitate this. The paper was written in response to John Flower’s paper titled “The International Integrated Reporting Council: a story of failure.”

The citation for this paper is: Adams, C A (forthcoming), “The International Integrated Reporting Council: a call to action”, Critical Perspectives on Accounting, DOI 10.1016/     The article was submitted on 30th April 2014 and accepted on 2nd July 2014.


Implementing integrated reporting requires the development of new accountings and management processes. And at the time of writing scarcely enough time has passed for the first reports to be prepared which follow it. So whilst it may be of interest to assess the content of the International <IR> Framework (IIRC, 2013a) released in December 2013 against previously stated objectives, it is certainly much too early to assess its success or failure, however that might be measured.

Flower’s focus in critiquing integrated reporting is on the limited extent to which it explicitly addresses sustainability. Yet it is not the main purpose of integrated reporting to do this. Rather, we are perhaps witnessing the early stages of widespread promulgation of a different way of thinking about corporate success and reporting. What integrated reporting becomes as time passes is, to a large extent, dependent on (critical and sustainability) accounting academics as actors in a process that has the potential to lead to profound change.

Adams and Whelan (2009) suggest that research concerned with corporate social disclosure should take as given that changes in disclosure patterns are governed by a concern with profit maximization. The paper suggests that the potential of integrated reporting (or any other driver) to effect change depends on the extent to which it creates a source of dissonance significant enough to change the way managers think within the constraints imposed on managers to maximise profit.

Without idealism (something Flower, appears to be critical of) and worthy intentions integrated reporting would not have got off the ground. Its attempt to encourage mainstream accountants to think longer term, consider what value means, to whom and to acknowledge the role of staff, broader society and the environment in creating it, is bold and surely worthy. There is a role for critical accounting researchers in providing a counter force to those who would try to ensure such efforts result in nothing more than business as usual. Talking amongst ourselves will not do it, yet only a handful of academics submitted responses to the IIRC’s consultation draft. (See  Academic respondents are few in number, but include John Flower and myself.)

The extent of support of the professional accounting bodies for a form of reporting which considers value and the business model in anything other than monetary terms is perhaps a little surprising, and itself worthy of further research. The ACCA, CIMA and CPA Australia have already produced integrated reports and the ACCA and CIMA have announced that they are including integrated reporting in their professional syllabi. Following the arguments of Adams and Whelan (2009) this support of professional bodies in itself has the potential to change the way CFOs think, encouraged perhaps by a desire to be respected professionals.

At the time that the IIRC was established, the governing bodies of the Global Reporting Initiative (GRI) did not include investors who were first allocated places on the Stakeholder Council in 2013. (Note: the author is a member of the GRI Stakeholder Council and was a member of the IIRC’s Technical Collaboration Group.) Whilst the GRI had made some progress in encouraging companies to measure historical impacts on the environment, society and economies, it did not set out to encourage businesses or investors to consider the value to business or its stakeholders, of doing so. Further, seventeen years after the formation of the GRI, the integration of sustainability considerations into mainstream decision making, reporting and performance management has arguably been limited or at best slow and patchy (Adams and Frost, 2006; 2008). Corporate initiatives on sustainability were gaining limited traction at senior levels and there is a view, which I share, that integrated reporting can help. For example, the United Nations Global Compact LEAD submission to the Consultation Draft of the International Integrated Reporting <IR> Framework noted:

“The business case for sustainability can often be difficult to measure and share… integrated reporting has the potential to connect financial disclosures with sustainability in a way that makes them more relevant for a broader audience… and that this greater level of integration of reporting practices encourages and supports the integration of sustainability in strategic planning, decision-making and operations.”

To my mind it is the necessity of getting senior executives and Board members to think (long term) about their business model, how they create value and to whom, material issues, risks and strategy together which gives integrated reporting the potential to effect change.

Chief Financial Officers focussing on short term financial gains and cost cutting, supported by accounting and reporting requirements that privilege financially quantified information, have been a stumbling block. They have tended to see social and environmental sustainability initiatives as an unnecessary cost rather than as a moral obligation or a benefit. Further, they have ignored sustainability risks with potentially significant (often long term) financial consequences. At the same time, financial reporting has been capturing a decreasing proportion of what is of value. I recall a speech at a CIMA Global Business Week conference in 2001 by Douglas Flint, then Chief Financial Officer (now Chairman) of HSBC where he recognised the competitive advantage of First Direct, the bank without branches, was in its people, culture and relationships and couldn’t be copied by showing other bankers around their premises. What was of value was intangible. Indeed, Standard and Poor’s stock market index of the top 500 US listed companies in the 1970’s around 80% of a company’s market value could be traced through to the financial statements whereas by 2010 only around 20% can be accounted for by its financial and physical assets (IIRC, 2011). Further KPMG (2012) have argued that there is a mismatch between what is being reported and factors that influence value.

It is in this context that the IIRC was formed.

Much has been written about the role of accountants in making things visible – or not. Critical researchers and social and environmental accountability researchers have argued that accounting can hide and reveal (see, for example Cooper and Puxty, 1996; Hines, 1991; Williams and Adams, 2013). Whilst accountants might not be willing or able to “save the world” (Flower, page XX), if we (or those other accountants) are part of the problem, how will it be saved without our (or their) involvement?

Whilst Flower criticises the composition of the IIRC, those involved believe it would be difficult to argue that they have not run a transparent process (conversation with Paul Druckman, CEO, IIRC). In addition to publishing submissions to the consultation draft on their website, the IIRC published a summary of responses, discussed how they were dealt with and why in documents title Basis for Conclusions (IIRC, 2013b) and Summary of Significant Issues (IIRC, 2013c). They have also published a series of Background Papers developed by Technical Collaboration Teams guided by multi-stakeholder Steering Committees covering a range of topics including the Capitals (IIRC, 2013d), the Business Model (IIRC, 2013e) and Value Creation (IIRC, 2013f). [Note: This author was on the Technical Collaboration Team for the Capitals Background Paper (IIRC, 2013d)] Flower (forthcoming) has not referred to any of these documents, yet they are important in understanding how different voices have contributed to the process.

Flower links a declining focus on sustainability accounting and reporting in IIRC documents to the dominance of accountants on the Council. This is plausible, but the role of the various other organisations concerned with aspects of sustainability accounting and reporting is also worthy of consideration. It might be unwise to assume that accounting firms and professional bodies are the only players acting out of self-interest and self-preservation.

I am puzzled by Flower’s claims that the IIRC has abandoned sustainability accounting and reporting. I do not see this as a significant component of Discussion Paper (IIRC, 2011) and in any case I am unclear why the IIRC would have set, as its core mission, tasks already undertaken by other organisations or why, assuming it did so, it would be criticised for avoiding duplicating such tasks.

Having briefly considered the link between integrated reporting and sustainability accounting and reporting (which Flower argues the IIRC has abandoned), this paper goes on to consider further: the key features of integrated reporting which have the potential (if critical voices engage in its further development) to shift corporate thinking; areas for further academic research; and the role of academics in facilitating change (Adams and Larrinaga González, 2007; Adams and Whelan, 2009; Cooper, 2005).

This article is © Elsevier and permission has been granted for this version to appear here ( Elsevier does not grant permission for this article to be further copied/distributed or hosted elsewhere without express permission from Elsevier.

The potential to shift corporate thinking

The features of integrated reporting which have the potential to shift the thinking of corporate actors to better align notions of profit maximisation with the wellbeing of society and the environment (following Adams and Whelan, 2009) are its emphasis on thinking long term and encouragement of broader thinking of what is value, the value creation process and the business model. Whilst I would like to see this thinking go much further, it is already a long way from traditional Anglo-American thinking of value as something which can be measured in monetary terms and the business model in terms of money flows. Integrated reports published compulsorily in South Africa (although not yet following the Framework) provide a more holistic way of thinking about the business, than an array of unconnected reports (see EY, 2012).

Flower raises the issue of the integrated report not being the primary report or even necessarily a separate report. I would think it quite possible that this may still be a long term aim of the IIRC, but the Summary of Significant Issues (IIRC, 2013c) points to there being different views amongst responses to the consultation draft.

  • The meaning of value and value to whom?

The meaning attributed to ‘value’ and value to whom is critical in shifting the extent to which business, society and the environment co-exist in a mutually beneficial way. Flower is critical of the IIRC’s concept of value because it is ‘value for investors’ and not ‘value for society’. Like Flower, I would also prefer it if business embraced the notion of ‘value for society’, but this will not happen unless it is seen as being aligned to ‘value for investors’. The International <IR> Framework links the two in paragraphs 2.4 – 2.7:

“2.4 Value created by an organization over time manifests itself in increases, decreases and transformations of the capitals caused by the organization’s business activities and outputs. That value has two interrelated aspects – value created for: The organisation itself which enables financial returns to the providers of capital; Others (i.e. stakeholders and society at large).
2.5 Providers of financial capital are… also interested in the value an organization creates for others when it affects the ability of the organization to create value for itself…
2.6 The ability of an organization to create value for itself is linked to the value it creates for others…
2.7 …This includes taking account of the extent to which the effect on the capitals have been externalised…”

The IIRC’s Value Creation Background Paper (IIRC, 2013f) prepared by EY with guidance from a multi-stakeholder expert steering committee reveals differences, tensions and contradictions in the meaning of value. A range of perspectives are considered with the perspective of providers of financial capital considered in noting (page 11):

“Providers of financial capital equate value creation with the potential for future cash flows and sustainable financial returns, but this also takes into account the importance and limitations of different forms of capital for value creation.”

In the context of climate change it is surely clear that it would be unacceptable not to publicly report material emissions (whether in an integrated report or elsewhere). Global failure to reduce emissions to a point which will avoid a situation where the planet becomes uninhabitable to people, including providers of capital, would mean zero financial returns. At points in time prior to this the impact of climate change on financial returns to providers of capital of any one particular company might be very difficult to predict. It is reasonable to expect that strategies of corporations with material emissions will increasingly be influenced by the global necessity of reducing them.

Elsewhere the IIRC’s Value Creation Background Paper states that an integrated report should explain the increases and decreases in the pool of capitals and how and to what extent value has been created for others. Unfortunately this clarity is not reflected in the final Framework, but opposition to such a requirement is hard to fend off given the underdevelopment of accounting approaches.

The IIRC’s Value Creation Background Paper (IIRC, 2013f) acknowledges that stakeholder concerns and actions can influence financial returns and that the impacts may not be immediate or direct. The fact is that the impact of stakeholder actions and concerns may not be measureable in financial terms for a long time if at all. Nevertheless, countless examples have demonstrated that they present a considerable risk if not addressed. By requiring the disclosure (para 4.23) of risks affecting the organisations ability to create value over the short, medium and long-term the Framework at least encourages the consideration of such impacts and how they are dealt with.

The IIRC’s Value Creation Background Paper (page 11) goes on to say: “Integrated reports should enable providers of financial capital to assess whether, to what extent and how an organization’s use of, and outcomes for, all of the capitals adds to financial value.” This will be interpreted by some as meaning business as usual – if you can’t measure it in monetary terms, it’s not important.

Perhaps rather than focussing on blaming the dominance of the accounting profession in the process, we should consider our failure as accounting academics, critical of current accountings, to engage with organisations to help develop new accountings (see Adams and Larrinaga González, 2007; Adams and Whelan, 2009).

Unilever, an IIRC pilot company, is an example of a seemingly increasing number of companies acknowledging the need to think differently about business success:
“… the biggest challenge is the continuing threat to ‘planetary boundaries’; resulting in extreme weather patterns and growing resource constraints. These have increasing impact on our business… We remain convinced that businesses that both address the concerns of citizens and the needs of the environment will prosper over the long term… As… [the Unilever Sustainable Living Plan] becomes embedded, there is growing evidence that it is also accelerating our growth.”
Unilever, Annual report and accounts 2012 p 4.

As I note in Adams (2013, p 52), in order to credibly articulate their value creation story, organisations should: “disclose how they define value and the relevance of stakeholder views and the six capitals to their concept of value; disclose what steps they have taken to maximise value creation according to their definition; seek external assurance to demonstrate that they are working to create value as they define it”.

  • The role of the capitals

I share Flower’s disappointment with the limited disclosure requirements concerning movements of the capitals in the Framework (IIRC 2013a), but it is difficult to see how it could have been achieved in a meaningful way given the current underdevelopment of such accountings. The focus of integrated reporting is to consider how an organisation creates value – rather than on measuring impacts – and accountants and sustainability practitioners and researchers have to date given little attention to how this might be done under a multiple capital model. Part of the work of the IIRC’s Capitals Technical Collaboration group was to identify innovative examples of reporting on the capitals and it was clear that reporting was not yet sufficiently developed to be able to identify best practice. How would you put a value on, or disclose transformations of say, social and relationship capital or natural capital? This might be something for researchers to consider. In the meantime, the capitals are intended to broaden thinking about the value creation processes and risks. Measuring impacts of the organisation on the capitals should be addressed in its sustainability report or online sustainability disclosures (GRI, 2013).

As to Flower’s concern that integrated reporting is not sustainability reporting, the Capitals background paper (IIRC 2013d) explains the difference between the two as follows (page 17):

“5.12 While experience in sustainability reporting may prove invaluable to some on their journey toward <IR>, there are key differences between the two forms of reporting, particularly in the context of the capitals. It is worth noting that sustainability reporting:

• targets a wider stakeholder audience than does <IR>, which focuses primarily on providers of financial capital, particularly those with a long term view
• focuses on impacts on the environment, society and the economy, rather than on the effects of the capitals on value creation over time, as in <IR>.

As such, sustainability reporting is less likely to focus on the connectivity between various capitals or the strategic relevance of the capitals to value creation, and is more likely to include many disclosures that would not be material for inclusion in an integrated report.”

Credibility of integrated reports and the role of assurance

An issue which does need to be addressed is the assurance of integrated reports. As Flower points out (referring to Adams, 2004 and Boiral, 2013), there is a degree of incompleteness with respect to material issues in sustainability reports, something G4 (GRI, 2013) seeks to address. Without assurance standards which address materiality processes, this will incompleteness will occur in integrated reports too. For example, Sasol’s 2012 integrated report was ranked 5th in EY’s Excellence in Integrated Reporting Awards 2013 (EY 2013) but, despite being in the extractive industry, there is no mention of contemporary concern about a carbon bubble – the potential for devaluation of companies due to being unable to extract carbon in the future. This raises questions about the credibility of Sasol’s apparently highly regarded integrated report.

Potential avenues for research

The decision to prepare a first integrated report should lead to changes in: decision making processes; informal and formal communication processes; materiality and risk identification processes amongst others. Understanding the extent of these changes is important in considering the value of integrated reporting – itself an important factor in determining future guidance, policy and regulation. Understanding the factors which impact on the take up of integrated reporting is also important. Further research might explore:

  • Process of determining materiality and identifying risks for integrated reports.
  • Internal communications/ “integrated thinking”/ breaking down silos.
  • Factors that determine uptake of <IR> including qualitative factors such as role of leadership/ leadership style.
  • Changes to internal systems, processes and decision making on adoption of <IR>.
  • Accounting for transformations in the capitals.
  • The role of the multiple capitals concept in identifying risks and opportunities.
  • Implications of <IR> uptake for sustainability management and reporting practices.
  • Role and take up of <IR> in public and not-for-profit sectors.
  • The political landscape – relationships with other frameworks, Stock Exchange requirements, national regulation.
  • The impact of <IR> on decision making and outcomes.
  • Analyst responses to integrated reports.
  • Approaches to assurance of integrated reports.


This paper has discussed some key distinctions between sustainability reporting/disclosure and integrated reporting. It has outlined the case for integrated reporting and benefits to organisations and other stakeholders of the integrated thinking needed to develop an integrated report. It supports the current non-mandatory status of integrated reporting given that the accountings involved are insufficiently developed. It notes that Flower’s concerns about regulation relate to material sustainability impacts which are covered in a sustainability report, rather than an integrated report. This author agrees that reporting on material sustainability impacts should be mandatory (see for example Adams, 2004).

Flower argues that the IIRC’s proposals will have little impact on reporting practice, yet they already are having an impact. Over a hundred businesses have paid to be involved in the pilot programme, many others are adopting elements of integrated reporting and internationally regulation is increasingly requiring disclosure of, for example, strategy, risks and business model information in annual reports and Operating and Financial Reviews. The ideas in integrated reporting will evolve. I believe that to a large extent, their impact on reporting practice depends on those critical of the status quo both engaging with practice and ensuring their voices are raised and heard – as Flower is doing.

This article is © Elsevier and permission has been granted for this version to appear here ( Elsevier does not grant permission for this article to be further copied/distributed or hosted elsewhere without  express permission from Elsevier.

NOTICE: this is the author’s version of a work that was accepted for publication in Critical Perspectives on Accounting. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version will be published in Critical Perspectives on Accounting  DOI 10.1016/ 


Adams, C. A. (2013). Understanding Integrated Reporting: The Concise Guide to Integrated Thinking and the Future of Corporate Reporting. Oxford: Dō Sustainability.

Adams, C. A. (2013). Resources for integrated report preparers and topics for researchers accessed 31st March 2014.

Adams, C. A. (2004). The ethical, social and environmental reporting-performance portrayal gap. Accounting, Auditing and Accountability Journal, 17(5): 731-757.

Adams, C. A. & Frost, G. (2006). CSR Reporting. Financial Management, June: 34–36.

Adams, C. A. & Frost, G. (2008). Integrating sustainability reporting into management practices. Accounting Forum, 32(4): 288–302.

Adams, C. & Larrinaga González, C. (2007). Engaging with organisations in pursuit of improved sustainability accountability and performance. Accounting, Auditing and Accountability Journal 20(3): 333–355.

Adams, C. A. & Whelan, G. (2009). Conceptualising future change in corporate sustainability reporting. Accounting Auditing and Accountability Journal, 22(1): 118–143.

Boiral, O. (2013). Sustainability reports as simulacra? A counter account of A and A+ GRI reports. Accounting, Auditing and Accountability Journal 26(7).

Cooper, C. (2005). Accounting for the public interest: public ineffectuals or public intellectuals?
Accounting, Auditing & Accountability Journal, Vol. 18 No. 5, pp. 592-607.

Cooper, C. & Puxty, A. (1996). On the proliferation of accounting (his)stories. Critical Perspectives on Accounting, 7, 285-313.

EY. (2012). Excellence in Integrated Reporting Awards.

Flower, J. (XXXX). The International Integrated Reporting Council: a story of failure. Critical Perspectives on Accounting.  This is available here.

Global Reporting Initiative (2014). G4 Reporting Principles and Standard Disclosures.

Hines, R. (1991). On valuing nature. Accounting Auditing and Accountability Journal, Vol. 4, No. 3, 27–29.

IIRC. 2011. Towards integrated reporting: communicating value in the 21st century.

IIRC. 2013a. International <IR> Framework.

IIRC. 2013b. Basis for Conclusions

IIRC. 2013c. Summary of Significant Issues

IIRC. 2013d. Capitals Background Paper for <IR>.

IIRC. 2013e. Business Model Background Paper for <IR>.

IIRC. 2013f. Value Creation Background Paper for <IR>.

KPMG. (2012). Integrated reporting: performance insight through better business reporting. Issue 2.

Sasol. (2014) Annual Integrated Report 2013.

Unilever. (2013). Annual report and accounts 2012: Making sustainable living commonplace.

Unilever Sustainable Living Plan.

Williams, S. J. & Adams, C. A. (2013). Moral accounting? Employee disclosures from a stakeholder accountability perspective. Accounting, Auditing & Accountability Journal, 26 (3), 449-495.

Stockland’s progress on integrated reporting

prepared by Carol Adams


This analysis of Stockland’s reporting for 2013 focuses on the principles and content elements of <IR> which make integrated reporting distinctive.


Stockland’s Annual Review 2013 demonstrates connectivity through:

  • setting out briefly the contents of each report in its reporting suite  - this would be a good place to also mention the intended audience for each report;
  • the choice of non-financial KPIs included – they reflect Stockland’s long history of leadership in sustainability initiatives and sustainability reporting (page 7);
  • linking past performance, challenges, opportunities and strategy (pages 16-17);
  • setting the context and linking the various content elements of reporting (see the exemplary business snapshot, showing types of property and location on page 15);
  • setting out the respective roles of management and the Board with regard to performance and strategy (pages 22-23).

But social and environmental trends are not discussed in ‘challenges and opportunities’ on page 15. What are the big social and environmental issues creating challenges and opportunities for Stockland’s future?  And, difficult as it may be to do, it would be nice to see more explicit discussion of the changes and trade-offs made between the capitals relevant to Stockland.

Material issues

A description of the process of determining material issues is important in assessing the credibility of the issues identified. Stockland does this well.  The Annual Review (page 19) identifies key stakeholders and sets out the objectives and principles of its stakeholder engagement processes.  The reporting approach is carefully articulated on page 53.

But more could be done to justify the choice of non-financial performance measures in the report, linking them to the value creation story (and not just cost savings as has been done in the case of energy consumption).

Value creation story

Stockland misses an opportunity here.  The reader is not really told how Stockland defines value, though the relevance of the customer experience is hinted at.  The notion of creating value through a range of capitals is barely addressed.

Reference is made to making “a worthwhile contribution to the development of our cities and great country” on page 14, but the reader is not explicitly told what Stockland considers a “worthwhile contribution” to be.  The Liveability Index (page 44) is perhaps Stockland’s measure of that contribution and part of its value creation story.

On a positive note the Shareholder Review notes upfront that “the company’s vision is to be a great Australian property company that delivers value to all its stakeholders”.  Whilst <IR> is aimed primarily at  providers of financial capital, creating value for them requires delivering value to a broader range of stakeholders. Stockland acknowledges this.

Stockland’s Chairman, Graham Bradley, links being a socially concerned and environmentally responsible organisation with employee pride.  But the report misses the opportunity to go further in more explicitly linking this with long term value creation.  What is it about Stockland’s people and its investment in people that creates values?

A loose link is made between community partnerships, customer satisfaction and creating value, but more work needs to be done to link the various components of customer satisfaction with long term value creation.

Operational efficiency and cost savings are cited as the key driver for environmental initiatives.  At Stockland these focus on Green Star assets and energy reduction.

Very few companies do tell their value creation story well.  A good start would be to define value and disclose the steps taken to maximise value creation according to that definition. Much of this is already in the report, but could be more coherently brought together.

The business model

Similarly, there is enough information for the reader to get the gist of the business model but it isn’t explicitly articulated.  The report does not provide a clear and concise identification of the main inputs, activities, outputs and outcomes.  Business inputs need to be considered in terms of people, infrastructure, relationships, natural resources etc as well as funds.  They are mentioned in the report but not brought together.


The report is an excellent early integrated report which demonstrates a long history of embedding sustainability and proactively addressing sustainability issues.  The report pulls together social, environmental and financial information, but the seams are visible and some of the key components of an International <IR> Framework integrated report are missing.  Similarly, a rationale is given for Stockland’s customer focus, but it is not developed into a value creation story which flows from a concisely articulated business model describing the relevant capital inputs.

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The banking sector and integrated reporting: focus on HSBC

Key reporting standard setters in dialogue

Responding to calls for better alignment in corporate reporting, the International Integrated Reporting Council (IIRC) yesterday introduced The Corporate Reporting Dialogue (CRD).

The stated aim of the CRD is to promote greater coherence, consistency and comparability between corporate reporting frameworks, standards and related requirements, leading to improved efficiency and effectiveness.

The organizations participating in the CRD, which was launched at the International Corporate Governance Network Annual Conference in Amsterdam, are:

  • Climate Disclosure Standards Board (CDSB)
  • Financial Accounting Standards Board (FASB)
  • Global Reporting Initiative (GRI)
  • International Accounting Standards Board (IASB)
  • International Integrated Reporting Council (IIRC)
  • International Public Sector Accounting Standards Board (IPSASB)
  • International Organization for Standardization (ISO)
  • Sustainability Accounting Standards Board (SASB)

The reality is that there is also concern, perhaps even insecurity, amongst some that some of these organisations will lose relevance unless there is greater connectivity between their aims and standards/frameworks.  That is not to say that their aims need to be the same. Indeed they serve different stakeholders as alluded to by the Chair of the CRD, Huguette Labelle, also Chair of Transparency International and a member of the IIRC Council.

She stated, “The corporate reporting landscape is changing. For too long, reporting has been fragmented and disconnected from the strategic drivers of value. In an interconnected world, isolated change is insufficient to reflect the complexities of modern business and investment practice. The CRD is a collaboration that will promote greater cohesion and efficiency, rebalancing reporting in favour of the reader, helping to re-establish the connection between a business and its principal stakeholders.”

Hopefully this means that a focus on accountability for impacts on people, communities and the environment will not be lost and instead be increasingly seen as essential to creating value.  What many readers want is change in the way business is done and reporting has a critical role in this – something that should not be lost in ‘rebalancing reporting in favour of the reader’.

According to the IIRC, the CRD will develop practical ways to bring alignment to the direction, content and ongoing development of reporting frameworks, standards and related requirements. Participants will share information, express a common voice on areas of mutual interest, and as the initiative progresses, will reach out to the broader corporate reporting landscape. The initial deliverable will be to develop a ‘Corporate Reporting Landscape’ highlighting the connectivity of the various reporting frameworks and standards and their relevance to Integrated Reporting.

Paul Druckman, CEO, IIRC

Paul Druckman, CEO, IIRC

The CRD could then become a powerful catalyst for change.  Indeed Paul Druckman, CEO of the IIRC has pointed to the importance of the dialogue in furthering change stating: “At the creation of the IIRC we set out to be a catalyst for an evolution in corporate reporting – the formation of the CRD is at the heart of this, and is a significant step towards achieving our goal.”

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Changing the way business is done? South African integrated reports 

RBS Sustainability Review 2013: building trust and developing integrated thinking

What is integrated reporting? And how do you do it?

How stakeholders drive accountability in corporate sustainability reporting

Towards integrated thinking at Unilever

Changing the way business is done – South African integrated reports

written by Carol Adams

Changing the way business leaders and their investors think is a prerequisite for real change towards social, environmental and economic sustainability.  A focus on the longer term and thinking about value in non-monetary terms, means thinking about people, relationships, know-how and the natural environment and how they create value, rather than just what they cost or how we impact on them. And a reading of the best South African integrated reports reveals a concerted effort to think about the business differently.

Citation for this article:  Adams, C A (2014) “Changing the way business is done: A critical review of two South African integrated reports”, The Sustainability and Integrated Reporting Handbook, Alive2Green Available here

The potential of integrated reporting to drive changes in the way business does business lies in its focus on long term strategic planning, the multiple capital concept and its potential to change how we define value.  A focus on short term financial value is increasingly being seen as bad for business, let alone society and our natural resources.

It is pleasing to see reports which highlight key non-financial performance indicators, along with financial indicators right up front.  For example, in Sasol’s case these include environment, safety and equity measures and, in the case of greenhouse gas emissions (only) a quantified long term (2020) target.  It is also exciting to see reports which talk about values and goals in broad terms and analyse the context in which the business is operating, its risks, including reputation risk, and opportunities.

Some of the reports available, such as Sasol’s 2013 annual integrated report, attempt to follow the IIRC’s consultation draft, but they all predate the recently released International <IR> Framework (IIRC, 2013 and Adams 2013).  Yet they provide many learnings for companies new to integrated reporting.

Sasol explicitly acknowledges the link between values and behaviour: Our shared values define what we stand for as an organisation and inform our actions and our behaviour. They determine the way in which we interpret and respond to business opportunities and challenges.” Sasol Annual Integrated Report 2013 p 7.

So what behaviours is Sasol aiming to nurture?  A focus on people, relationships and long term value for those connected with the company:

To grow profitably, sustainably and inclusively, while delivering value to stakeholders through technology and the talent of our people in the energy and chemical markets in Southern Africa and worldwide…our common goal To make Sasol a great company that delivers long-term value to its shareholders and employees; a company that has a positive association for all stakeholders”. (Sasol Annual Integrated Report 2013 p 6)

‘Sustainably’ in this case might mean both environmental sustainability and longevity:

We also remain acutely aware of the environmental impact of extending our operations to 2050. We are working on initiatives to mitigate greenhouse gas and carbon dioxide (CO2) emissions as well as on those related to air quality and water stewardship.” (Sasol Annual Integrated Report 2013 p 27.)

Social and environmental issues feature prominently in ‘top issues impacting our business’ (page 30), but neither here, nor in ‘Looking towards 2050’ (page 27) is there any mention of the carbon bubble.  Should there be?  Well, it has been getting quite a lot of attention, it may impact on value to investors (and employees and stakeholders) and integrated reporting requires identification of material issues and discussion of the context in which a company is operating including risks and opportunities.  So, yes, I think there should be a discussion on the likelihood of a carbon bubble impacting on future value.

Sasol appears to see the fight as being with regulators.

“Risk of climate change and related policies impacting Sasol’s operations growth strategy and earnings” is identified as a regulatory risk (page 47) with possible regulatory interventions identified as carbon taxes, product carbon labelling, carbon budgets and carbon-related border tax adjustments linked to bilateral agreements. Sasol discusses efforts to reduce Greenhouse Gas emissions, but also notes it is engaging in “co-ordinated regulatory intervention” (page 47).  In the context of its concern about the cost of such interventions, this would appear to mean trying to stop them, a move unlikely to be in the interests of protecting natural capital.

The report has been ranked highly (see EY, 2013) and indeed, I did get the feeling that there had been some considerable ‘integrated thinking’, demonstrated by the discussion on value, strategy and the business model.  But I was left wondering if all the reported activity around reducing carbon emissions was an attempt to hide the elephant in the room (the carbon bubble) and delay regulation.  Of course, I should not be surprised by this (see Adams, 2004 and Adams and Whelan, 2009), but I am disappointed to see integrated reporting used in this way.

On the positive side, Sasol has identified how each stakeholder contributes to value creation (pages 38-9) along with more commonly provided information on how they engage with each stakeholder group, what their expectations are etc.  The process of determining materiality set out at the front of the report involved consulting stakeholders amongst other steps.

The Standard Bank Group (SBG) does not suffer the same perception that the nature of its business is fundamentally unsustainable as some would have of Sasol, but banks come up against scrutiny with regard to the nature of the projects they fund.  And they are generally mistrusted by many.  Demonstrating a contribution to creating value for the societies they depend on and diligence with regard to the environmental impacts of the projects they fund is therefore critical for their long term success.  The Standard Bank Group appears to do this better than many.  The real proof of course comes in information about the nature of loans made.

The reader of SBG’s annual integrated report is left with the feeling that the bank sees its success as inextricably linked with its relationship to society.  For example, socioeconomic development and provision of sustainable and responsible financial services are identified as material issues.  The bank aims to embed sustainability thinking into its business processes, there are a number of determinants of materiality, including the bank’s values and accountability and responsibility for sustainable development rests with the board (page 46). The report includes a value added statement (page 49), information on stakeholder engagement processes and explains it approach to environmental and social risk screening.  Sustainability risk is explicitly mentioned alongside other operational risks (page 90).

Another strength of the SBG report is its disclosure on remuneration of it executives. Some are not so bold.

One of the Guiding Principles of the International <IR> Framework is ‘concisenes’.  At around 130 (Sasol) and 180 (SBG) pages, neither report examined here can be said to fulfil that, but they contain information, including financial and governance information which goes beyond the Framework’s content elements.


Adams, CA (2004). The ethical, social and environmental reporting – performance portrayal gap Accounting, Auditing and Accountability Journal (Volume 17, Issue 5): 731–757.

Adams CA (2013) Understanding Integrated Reporting:  The Concise Guide to Integrated Thinking and the Future of Corporate Reporting Dō Sustainability ISBN 9781909293847.

Adams CA and Whelan G (2009) Conceptualising future change in corporate sustainability reporting Accounting Auditing and Accountability Journal 22(1): 118–143.

EY (2013) Excellence in Integrated Reporting Awards 2013. Download here:$FILE/EY%20Excellence%20in%20Integrated%20Reporting.pdf

IIRC (2013) International <IR> Framework. Download here:

Citation for this article:  Adams, C A (2014) “Changing the way business is done: A critical review of two South African integrated reports”, The Sustainability and Integrated Reporting Handbook, Alive2Green Available here

Sustainability reporting: A tool for improving returns to shareholders?

written by Carol Adams

Can reporting on Environment, Social & Governance (ESG) issues increase returns to shareholders?

Surveys conducted by consulting firms have found that the majority of CEOs link social responsibility initiatives with profitability.   Academic research has consistently found a positive link between social performance and financial performance.

But making that link at an individual corporate level is challenging. This post looks at five key things you can do to enhance the value created by your social responsibility and sustainability initiatives.

Sustainability reporting tends to focus on measuring historical impacts, rather than on the value created by social and environmental initiatives.  Information of great interest to investors, such as the quality of management and governance processes, has often been overlooked.

Areas of major risk such as the management of ESG (Environment, Social & Governance) issues in the supply chain, tensions in stakeholder relationships, human rights abuses and lack of diversity at senior levels are often glossed over and put in the too hard basket. Yet addressing these issues can really add value.

Getting traction and change at an individual corporate level can seem incredibly slow and hard work.  It often comes in the wake of a serious breach of stakeholder trust resulting in the whole company is mobilised right from the top.   Shell and Nike are prominent examples, both moving on from reputational damage resulting from stakeholder action to winning awards and recognition for reporting/social responsibility.

So how can ESG reporting contribute to improved returns to shareholders?

There are a few steps you can take to ensure your ESG reporting adds value.

  1. Develop a corporate reporting strategy

As a key communication medium, corporate reporting is too important to forget about until you need to start collecting data again.  It is an investment.  Have a strategy for developing your reporting at least three to five years into the future.  There will always be things that get in the way, so changing your approach needs to be planned. It takes time.

Questions to consider include: How do you want your reporting to develop? What reports will you produce? How will they be connected? Who is the audience for each? How much (and which) information will you put on line? What will you disclose about strategy?  How will you depict your business model? What does sustainability mean to (the success of) your organisation?

  1. Report all impacts material to stakeholders and all material risks

Not all material impacts fall neatly into an E, S or G box and approaches to materiality and stakeholder engagement need to ensure that issues which present financial or operational risks and opportunities don’t get overlooked.

Fuji Xerox Australia and the RBS Group have increased the range of stakeholders consulted to include the senior exec.  The RBS Board level Group Sustainability Committee expanded the scope of issues considered in the materiality approach for its sustainability report consistent with its own recently expanded role to cover matters not traditionally covered in ESG reporting.  The issues raised by the 26 advocacy groups that the Committee met during 2013 included: customer trust; governance and accountability; regulatory reform and compliance.  These issues sit alongside the more usual ESG issues which arise from a sustainability reporting stakeholder engagement process such as human rights, diversity and inclusion.

  1. Put impacts and activities on material issues into context

Don’t take report readers for fools.  It’s meaningless for a bank, for example, to talk about how much it is investing in renewable energy or lending to small businesses, both of which are important issues for that sector, without providing information on overall energy investment and lending, how this compares with the rest of the sector or how it compares with what’s been done on previous years.

Sasol’s otherwise exemplary 2013 annual integrated report might leave the reader wondering if all the reported activity around reducing carbon emissions was an attempt to hide the elephant in the room (the carbon bubble) and delay regulation.

  1. Demonstrate how ESG matters

It’s important to say how and why managing social and environmental sustainability issues creates value for your stakeholders.

Demonstrate how new partnerships and initiatives are linked to corporate strategy and hence create value.

Demonstrate how your ESG initiatives create value to your stakeholders and how this is connected to adding value to your investors.

The Royal Bank of Scotland Group’s RBS Sustainability Review 2013 begins with the words “In 2013, we were the least trusted company in the least trusted sector of the economy. That must change”. And the bank’s sustainability review is clearly intended to rebuild lost trust.  It explicitly recognises the link between financial success and serving customers and society.   The bank emphasises its desire to be accountable.  This must be genuine.  If it is, it goes a long way to building trust.  If it’s not it becomes a risk in itself…    The press, NGOs and social media are quick to pick up on green wash and have an immediate international audience.

Unilever have directly linked growth and product success with their Sustainable Living Plan which they depict as being central to their business model.

Another way to make it matter is to say how stakeholders contribute to overall value creation.  Sasol’s 2013 Integrated Report does just that identifying how each stakeholder contributes to value creation along with more commonly provided information on how they engage with each stakeholder group, what their expectations are etc.

  1. Demonstrate sound management and governance processes

Investors make judgements about the quality of management.  Corporate reporting is an opportunity to demonstrate sound management and governance processes.  Your approach to engaging stakeholders and determining material issues gives investors confidence that you are identifying and managing risks.  The extent of senior exec and Board oversight of the sustainability reporting process and outcomes gives investors confidence that you are managing performance.

Reporting quantified targets with dates by which they are to be achieved gives investors confidence that you are serious about improving performance.  Reporting performance against those targets shows that you are managing performance particularly if you say what corrective action is being undertaken where they aren’t achieved.

This post is based on my contribution to the CTQ Investing in Responsibility Conference Sydney 15th May.

For information on our advisory services see our Integrated Horizons website.

Related articles on this website:

RBS Sustainability Review 2013: building trust and developing integrated thinking

Ten steps to integrated reporting

Five essentials to embedding sustainability

The role of the (bank) CFO in value creation: an interview with Mark Joiner, NAB

Integrated Reporting: the Guiding Principle of ‘Connectivity of Information’ made simple

ESG issues and business responses: an interview with Ian Woods, AMP Capital

Towards integrated thinking at Unilever

Paul Polman, Unilever’s CEO, has made a clear connection between long term business success and tackling social and environmental issues:

“… the biggest challenge is the continuing threat to ‘planetary boundaries’; resulting in extreme weather patterns and growing resource constraints. These have increasing impact on our business… We remain convinced that businesses that both address the concerns of citizens and the needs of the environment will prosper over the long term… As… [the Unilever Sustainable Living Plan] becomes embedded, there is growing evidence that it is also accelerating our growth.” Annual report and accounts 2012 p 4

There are a number of things in Unilever’s annual reports that make the company stand out as a leader in connecting business success and value for investors with value for society.  The 2013 annual report succinctly captures the moral and business imperative for integrated thinking: “Business needs to be a regenerative force in the system that gives it life” (page 8).  And Unilever’s vision is to double the size of its business while reducing its environmental footprint and increasing its positive social impact.

Its annual reports set out, up front, financial performance and growth measures alongside key social and environmental measures.

Unilever's business model sourced from the Unilever website

Unilever’s business model sourced from the Unilever website

The simple pictorial representation of its business model puts its Sustainable Living Plan (which quantifies 2020 environmental footprint targets) right at the centre of everything it does.

The 2013 annual report provides a comprehensive analysis of key risks to value creation using a multiple capital approach – that is, it considers risks associated with society, relationships, the environment, intellectual capital and its people.  This demonstrates that risk identification processes involve a broad analysis of contextual factors.

Included amongst the various governance committee reports is one from the Corporate Responsibility Committee, rarely included in an annual report.

Critical to integrating sustainability into strategy, planning and decision making is incorporating it into remuneration and performance management.  Unilever’s annual reports demonstrate real leadership here in stating that social responsibility and performance against the Unilever Sustainable Living Plan is considered in determining rewards.

Unilever’s 2013 annual report makes a link between its customer base being predominantly female and its work on equal opportunities (page 16).  Female consumers have an interest in how women are treated at work. At 40% (page 6) the proportion of female non-executive directors is well above average. And 42% of Unilever’s managers are women (page 3).

There is room for improvement of course, but not the purpose of this article to set out where.  But I will mention a comment that particularly jarred – reference to the Dove brand “promoting self-esteem among young girls and women” (page 7).  There’s a bit more to it than this Unilever, particularly in your markets where violence against women and unequal opportunities are rife.

The International <IR> Framework has been criticised by some for focussing on value to investors, rather than value for society or stakeholders.  Unilever believes that the two are connected and has taken more steps than most to integrate social responsibility and environmental sustainability into the way it does business.

The links between value for investors and value for others are made in the International <IR> Framework in paragraphs 2.4 – 2.7:

“2.4 Value created by an organization over time manifests itself in increases, decreases and transformations of the capitals caused by the organization’s business activities and outputs. That value has two interrelated aspects – value created for: The organisation itself which enables financial returns to the providers of capital; Others (i.e. stakeholders and society at large).

2.5   Providers of financial capital are… also interested in the value an organization creates for others when it affects the ability of the organization to create value for itself…

2.6   The ability of an organization to create value for itself is linked to the value it creates for others…

2.7   …This includes taking account of the extent to which the effect on the capitals have been externalised…”

Too few companies explicitly recognise or acknowledge this. Unilever is a leader.

Contact Integrated Horizons if you would like to discuss integrated reporting.

Related articles on this website:

A global approach to sustainability: an interview with Ray Bremner, President & CEO Unilever Japan

Ten steps to integrated reporting

Five essentials to embedding sustainability

Integrated reporting – what it is – and is not: an interview with Paul Druckman

What is integrated reporting? And how do you do it?

accaThis article was first published by the ACCA here and was written by Dr Carol A Adams FCCA and member of ACCA’s Global Forum on Sustainability

If you are confused about what integrated reporting is, rest assured you are not the only one.

A lot of people think it’s about putting together your financial and sustainability reports.  Wrong.  It is much more than that – and much less.  It will not replace either a financial or sustainability report – both must be in place for integrated reporting.  But starting to think about the connections between the financials, the relationships your organisation has with its key stakeholders and how it makes use of natural resources, for a start, is a step in the right direction.

Integrated reporting requires thinking about value beyond financial terms – a long overdue development given that around 80% of the value of company is typically in intangible assets.

Building strong relationships with stakeholders, building a loyal customer base, developing intellectual capital and managing environmental risks, etc, tend to fall off the radar when corporate execs think short term.  But they are critical to long term success.  Integrated reporting keeps the focus on long term strategy and integrated reports are forward looking documents covering strategy, the context in which it will delivered  and how the company has, and will, create value for providers of capital and others in the short, medium and long term.  The International <IR> Framework recognises that long term success depends, amongst other things, on sound management, relationships, a satisfied work force and the availability of natural resources.

Much of the information companies are providing to investors is not in their annual review or financial statements – further evidence of the need for change.  An integrated report fills some of the gap and allows an organisation to tell providers of capital, and others, how it creates value for them.

If you asked your colleagues how they would describe your business model would they have the same view as you?  Probably not.  Many corporate execs think about their business model in narrow financial terms or from the perspective about the bit of the business they are responsible for. But if the senior exec work together in conceptualising the business model and start to think about inputs and outcomes in broader terms a different picture about what needs to be managed and what adds value emerges.

The six capitals concept is intended to facilitate this broader thinking about value and the business model.  The ACCA has been at the forefront of its development coordinating the work of the IIRC’s Technical Collaboration Group on the Capitals and funding my involvement.

Some companies are taking a first step towards integrated reporting by getting their financial and sustainability people working together.  This is advantageous in that accountants could better understand social and environmental risks and their impact on reputation and the bottom line whilst sustainability teams need to develop skills in making a business case for their work.  But the integrated thinking that goes behind integrated reporting needs to involve all the senior exec.  And the Board.

If you would like to know more about integrated reporting, see some examples of good reporting practice and speak with some peers about the challenges and benefits, register for the Master Class in London on March 14th hosted by the ACCA.  You will  hear from Eileen Rae, Director-Finance, ACCA and Jonathan Labrey, Communications Director at the International Integrated Reporting Council (IIRC).  Eileen will discuss the preparation of the ACCA’s second integrated report.   A copy of Understanding Integrated Reporting: the concise guide to integrated thinking and the future of corporate reporting will also be given to participants.

You can read more about the Master Class here.  

DōWebinar on Integrated Reporting now available here

If you missed my DōWebinar on integrated reporting you can see the presentation and listen to it here.

If you have any questions contact me directly or use the comment box below.

You can read about my Dō Master Class on integrated reporting with Eileen Rae, Director-Finance with the ACCA and Jonathon Labrey, Communications Director at the IIRC here.  The Master Class is hosted by the ACCA.

carol_bookAnd you can read about my book “Understanding Integrated Reporting: the concise guide to integrated thinking and the future of corporate reporting” here.


Masterclass: Preparing for Integrated Reporting – London, 14th March

Integrated Horizons-d81Preparing for Integrated Reporting

A Master Class with Dr Carol Adams, Integrated Horizons

14th March 2014 * ACCA 29 Lincoln’s Inn Fields, London * WC2A 3EE

£360 + VAT (£432 incl VAT)

Do_Button_Teal_HRBook here

Discounts are available for organisations who register more than one person.

Integrated reporting will bring radical change to the way organisations report and think about their business.

This Master Class will help you understand what integrated reporting is and how to do it.  You will have the opportunity to discuss challenges and benefits with your peers, consider examples of reporting and learn from experts and those who have done it.

Master Class Schedule

9:15 am: Tea & Coffee & Pastries

9:30 am: SECTION 

Introduction to <IR>: why it’s important for sustainability, what it is (and isn’t), why it developed and how it links with other corporate reports.

Jonathan Labrey, Communications Director and Kate Turner, Communications Manager at the International Integrated Reporting Council will join us for this session

11:00 am: Tea & Coffee

Created with Nokia Smart Cam

11:15 am: SECTION 2

The fundamental concepts, principles and content elements of <IR>

12:45 pm: Lunch

1:15 pm: SECTION 3

How to do it: Things to consider and do before you report; the reporting process.

Eileen Rae, Director-Finance at the ACCA will discuss the preparation of the ACCA’s second integrated report

2:30 pm: Tea & Coffee Break

2:45 pm: SECTION 4

Reflections on the difference <IR> will make and examples from some recent integrated reports.

4pm: End

Attendees will receive a free copy of Carol’s book:

Understanding Integrated Reporting: The Concise Guide to Integrated Thinking and the Future of Corporate Reporting

accaPart of the DōShorts Sustainable Business Collection

Event organised in partnership with the ACCA.

Getting on Board: materiality and stakeholder engagement processes for integrated reporting

written by Carol Adams

This article was first published on CSRWire on 30th December 2013

CSRwire logo

Many years ago a group of accountants, sustainability leaders, advisors and activists and big accounting firms got together to develop a principles-based process framework to support organizational learning and “social and ethical, environmental and economic” performance. They drew on tried and tested accounting principles, adapting and applying them for “a path of sustainable development.”

From the AA1000 Framework to the International <IR> Framework

The AA1000 Framework was published in 1999, building on the work of many other organizations developing process or performance standards on single or multiple issues. The collaboration was an early example of “integrated thinking.”

The stated benefits of the 1999 approach included, amongst other things:

  • An understanding of what matters about performance informed by stakeholders
  • Better risk management
  • Satisfying the demands for information from investors, including assessing the quality of management
  • Facilitating the alignment of values, strategy, activities and outcomes

These ideas resonate in the language of the International <IR> Framework:

  • Value creation for the organization and for others
  • Identification of risk and opportunities
  • Information for providers of capital
  • Future oriented information and connectivity

Few Accountants get the message

By speaking to CFOs and corporate boards in a language they understand, the International <IR> Framework will, I hope, profoundly change business behavior. Accountants are the creators and keepers of knowledge about organizational performance and what they chose to measure and make visible gets managed and influences decisions.

The ideas in <IR> are not all new, but few accountants have got the message. (An exception is Mark Joiner former CFO of a top 40 bank.)

International Accounting Standard 8 defines material issues as those that influence the economic decisions of users, taken on the basis of the financial statements. Up until now, accountants have largely failed to capture issues that are not easily quantifiable in monetary terms, despite their likely materiality to economic, let alone social and environmental, decisions. This definition of materiality itself is arguably inappropriate in the context of worldwide social and environmental crises.

The issue is perhaps one of aptitude and timing.

And the timing is already too late for some.  Accountants are only just beginning to understand the dependency of business success and the impact of business on nature. For example, the Puma Environmental Profit and Loss account attempts to put a price on Puma’s environmental impacts.

Will <IR>, by recognizing the importance of value creation for the organization and for others in long term business success, address this failure of accounting?

The Materiality Report as guide

Over the last few years, corporate processes for determining materiality for sustainability reporting have encompassed an increasingly broad range of issues not linked to sustainable development.

The Materiality Report (Forstater et al, 2006) demonstrates the benefits of linking the materiality process with strategy development, performance management and creating value.

Its Materiality Framework defines material issues as those that could make a major difference to an organization’s performance. Quotes in the Materiality Report from executives indicate that organizations were at that time already integrating materiality in annual and sustainability reporting processes.

Fuji Xerox Australia and the Royal Bank of Scotland Group

Fuji Xerox Australia and the Royal Bank of Scotland Group offer examples of sustainability reports that identify material contextual issues on a whole of business basis.

The Fuji Xerox Australia Sustainability Report 2013 includes “responding to digitization through innovation” and “being customer centric” in the top ten material issues. Fuji Xerox Australia’s provider of capital, parent company Fuji Xerox Co Ltd, is included in the list of stakeholders and the company took steps in 2013 to involve staff in the final prioritization of material issues. They plan to develop this process linking it to risk and strategy.

The RBS Group’s 2012 Sustainability Report identifies customer trust and business lending as its top two “stakeholder issues.” The report’s list of top 14 stakeholder issues does not distinguish “sustainability” issues from others.

More collaboration

These examples show that processes for determining materiality for integrated reports already exist. But they need to be refined.

At an international level these processes have evolved through a collaboration between accounting and sustainability professionals. Such collaboration needs to develop at an organizational level and extend beyond the finance and sustainability teams to senior managers from all key functional areas.

About the Author:

Dr Carol Adams @ProfCarolAdams is a Director at Integrated Horizons consultancy. Understanding Integrated Reporting: The Concise Guide to Integrated Thinking & the Future of Corporate Reporting (Foreword by Paul Druckman) published by Dō Sustainability can be ordered here using code CSR15, for 15% off .

Related articles on this website:

Ten steps to integrated reporting

The role of the (bank) CFO in value creation: an interview with Mark Joiner, NAB

Integrated Reporting and the Six Capitals: What does it all mean?

Tensions around the meaning of ‘value’ and value to whom in integrated reporting

Integrated Reporting: the Guiding Principle of ‘Connectivity of Information’ made simple

Integrated thinking and integrated reporting

Materiality: financial reporting, sustainability reporting and integrated reporting

Understanding (how sustainability fits into) your business model

The banking sector and integrated reporting: focus on HSBC

Next steps in integrated reporting: bankmecu

This article was first published on CSRwire Talkback.  The original article can be viewed here