An integrated report is a concise communication about how an organization’s strategy, governance, performance and prospects, in the context of its external environment, lead to the creation of value in the short, medium and long term.
GRI believes that integrated reporting which incorporates appropriate material sustainability information equally alongside financial information provides reporting organizations with a broad perspective on risk.
The term “capitals” as used in IR refers broadly to any store of value that an organization can use in the production of goods or services. The capitals are sometimes also referred to as “resources and relationships”. Human beings, human communities and ecosystems are not merely forms of capital provided to companies in order to be drawn down or built up – but are a form of life in themselves.
Types of capitals recognized by IIR
- Financial
- Manufactured
- Human
- Intellectual
- Social & relationship
- Natural
Whether or not the capitals an organization uses or affects are owned by that organization, their availability, quality and affordability can affect the long term viability of an organization’s business model and, therefore, its ability to create value over time. This is particularly the case with respect to capitals that are in limited supply and are non-renewable.
Quantitative indicators, such as key performance indicators and in some cases, monetized metrics, can be very important in explaining an organization’s uses of, and effects on, various capitals. Nonetheless, it is not an objective of IR to measure all the capitals or movements in them. Many uses of, and effects on, the capitals are best (and in some cases can only be) reported on in the form of narrative, rather than through metrics.
How to disclose capital use in an integrated report:
- Consideration of the availability, quality and affordability of the capitals
- Organizational overview and operating context
- How the organization’s culture and ethical values are reflected in its use of and effects on the capitals
- How the links between the organization’s strategy and its use of and effects on financial and other capitals are used to arrive at performance-based compensation.
- Opportunities and risks relating to the continued availability, quality and affordability of relevant capitals
- How the organization’s strategy and resource allocation plans affect key capitals and risk management arrangements related to them
- Demonstrating the connectivity of financial performance with performance and outcomes regarding the other capitals
- The implications for future performance and outcomes of the availability, quality and affordability of capitals the organization uses, and why they are, or may be, important to the organization’s ability to create value over time
Background Paper Capitals 2013
Other frameworks for reporting
- Global Reporting Initiative – world most widely used
The GRI provides a consistent way for companies to voluntarily measure and report progress on economic, ecological, and social performance of their businesses with 59 key performance areas. - UN SDG goals
The UNDP have collaborated with the GRI hence most indicators in the GRI reflect back to the SDGs, however, a business can tailor-make their own report and tie the impact back to the SDGs - Bcorp
Building a global community of Certified B Corporations who meet the highest standards of verified, overall social and environmental performance, public transparency, and legal accountability – internationally recognized, build up to certification level. - ISO 26000
ISO 26000 provides guidance on how businesses and organizations can operate in a socially responsible way. Businesses can voluntarily report based on the guidelines or choose to be assessed and certified by the country coordinator. - The carbon disclosure project
CDP is a not-for-profit charity that runs the global disclosure system for investors, companies, cities, states and regions to manage their environmental impacts - Sustainability Accounting Standards Board
Private-sector standards setting organization based in San Francisco, California dedicated to enhancing the efficiency of the capital markets by fostering high-quality disclosure of material sustainability information that meets investor needs. - The Global ESG Benchmark for Real Assets
GRESB is an investor driven organization assessing the sustainability performance of real asset sector portfolios and assets - Dow Jones Sustainability Index – most widely used in Europe, Asia Pacific, USA