Spotlight on integrated reporting

Key Points

  • Businesses are becoming more aware of the need to integrate sustainability in their annual reporting
  • South Africa’s Integrated Reporting Committee has released guidance for a framework of integrated reporting
  • Integrated reporting was an important issue discussed at the recent Accounting for Sustainability Forum held in London.

Around the world, sustainability is gaining a higher place on businesses’ agendas. In particular, businesses are beginning to recognise that integrated reporting, which incorporates sustainability with strategic, operational and financial reporting, provides the most comprehensive information about their total performance.

In South Africa, in particular, integrated reporting has been in the limelight since the recommendations of the King III code were included in its listing requirements. The recommendations state that all listed companies must present integrated reports (or explain why not) for their financial years starting on or after 1 March 2010. To support these companies, the South African Integrated Reporting Committee (IRC) released a world first in late January: an integrated reporting guidance document, Framework for Integrated Reporting and the Integrated Report.

The guidance paper advises that businesses should use an integrated report as their main source of information for stakeholders, rather than a traditional annual report.

 Lee White, the Institute’s Executive General Manager – Members, believes that the guidelines issued in South Africa demonstrate that stakeholders require long-term understanding of the viability of a company.

‘Sustainability and social and operational efficiency are important elements that affect a business’ performance. The new integrated reporting guidelines demonstrate the increasing awareness of these areas internationally,’ said Mr White.

Accounting for Sustainability Forum

The value of integrated reporting was also an important message to come out of the Accounting for Sustainability Forum, held in London in December 2010. The forum, hosted by the Prince of Wales, stressed the critical need for businesses to put a value on, and better account for, the social and environmental impacts of their activities.

Mr White attended the event, along with the Institute’s spokesperson on sustainability, Geraldine Magarey.

At the conference, the Chancellor of the Exchequer, the Rt Hon George Osborne, announced the UK government’s plan to fully implement sustainability reporting across its business divisions starting April 2011.

‘Sustainability is gaining momentum internationally as a priority for businesses. It is important that Australia follows the UK’s and South Africa’s leadership by putting sustainability high on our agenda,’ said Ms Magarey.

 More information about the Accounting for Sustainability forum can be found in Lee White’s and Geraldine Margarey’s blogs.

Article last updated 8 February 2011