Since integrated reporting—where financial and nonfinancial performances are combined into a single report—is so new to U.S. companies, it’s harder to move ahead because there’s currently no road map to follow. And given the challenges inherent in syncing up both sides of a business, it may require several years to achieve.
The preparation for integrated reporting requires small steps—baby steps even—to get your organization ready and the process started:
- Establish a regular corporate social responsibility (CSR) reporting cycle in order to have a process in place for gathering nonfinancial data.
- Shift from a two-year to a one-year cycle for your CSR reporting, to align with the yearly financial reporting of an integrated report.
- Determine the year-over-year metrics needed to demonstrate progress for the all-important aspect of comparability in sustainability or nonfinancial reporting.
- Develop clear, attainable and measurable goals for reporting over time. This process requires input and agreement from all levels of an organization, from operations to leadership.
- Bring your financial reporting cycle into sync with your environmental reporting cycle, depending on the complexity of your value chain.
- Get different groups within the operation on the same reporting timetable or following the same reporting protocol, which might take several years.
More overarching than these tactical steps is the idea that integrated reporting requires what the International Integrated Reporting Council (IIRC) calls “integrated thinking,” which means infusing sustainability into a company’s overall business strategy. This is easier said than done for large, well-established organizations. Once your organization has adopted an integrated approach to business strategy, all decisions should be made with that filter in place.
The IIRC believes in this “inevitability of transformative change” and is helping to drive it by their pilot program to establish a framework for integrated reporting. U.S. and global business leaders involved in the program, such as The Coca-Cola Company or Microsoft, are already known for their forward-thinking approach to business strategy—so it only makes sense that companies like these are at the forefront of establishing the new framework.
From a marketing perspective, integrated reporting will drive further transparency into your brand and its values. Given all that is yet to be determined about integrated reporting—coupled with the inherent value that the integrated approach can bring to stakeholders—we look forward to the unexpected!
Our series on integrated reporting also includes Don't Shortchange Your Brand! and U.S. Plays Catch-up on Adding Brand Value. The next blog post in this series will look at what makes for a great integrated report.