Global Compact International Yearbook 2013
182
By Nicolette Behncke
Integrated reporting moves beyond a silo approach of in-
formation gathering and reporting toward a more compre-
hensive assessment and presentation of a company’s value
and performance. This offers various benefits, such as giving
organizations a more holistic view of information relevant to
their strategies, business models, and abilities to create and
sustain value in the short, medium, and long term.
More specifically, potential benefits are:
•
greater access to and transparency of information from a
wide range of both internal and external information sources,
through integrated processes and the standardization of
information;
•
streamlined and better-connected reporting through more
reuse of reporting elements, transparency, and collaboration
on reporting;
•
more relevant and understandable information available
for management and stakeholders to enable better decision
making;
•
better allocation of capital and other resources;
•
better access to capital markets and business partners;
•
competitive advantage through cost savings, operational
efficiencies, and differentiation.
However, the roadmap to realizing such benefits is not nec-
essarily a simple one. It requires a comprehensive approach:
understanding the company’s strategy drivers, identifying key
stakeholders and their specific expectations, and implementing
processes to obtain the information necessary for an integrated
approach to managing the business.
The integrated model set out below highlights the scope of
the information that needs to be considered when assessing
the information demands of an organization, including the
connectivity between the various areas – external, strategic,
business, and performance. Regarding external drivers, compa-
nies might ask: What is the market and regulatory landscape
like today, and how is it changing? What are the megatrends
that are changing society now, and how will they impact
markets in the future? With a view to the business model,
relevant questions include: Are the business model and supply
chain designed to withstand the impacts of climate change,
technology failures, and natural disasters? What assumptions
have been made regarding the availability of resources?
Answering these questions within an integrated approach
will give companies a much clearer picture of their industry,
markets, and broader environment as well as how to change
products and services, business models, and positioning to
remain successful.
Q: Is integrated reporting an external reporting phenomenon or does
it have wider ramifications?
Even though the International Integrated Reporting Coun-
cil (IIRC) discussion paper, which has triggered the current
discussion about integrated reporting, initially provides a
framework for external reporting, its aim is much higher.
The idea of integrated reporting is focused on making some
real changes to the existing corporate reporting model, both
to external reporting as well as to internal decision making.
An integrated report is merely intended to be one output of
integrated reporting, which should reflect – and will depend
upon– integrated thinking within an organization. It is about
understanding the relevance of various factors – financial as
well as non-financial – and its connectivity to the company’s
business model, as well as about considering the insights
What Are the Benefits of
Integrated Reporting
?