Lots of people are talking about integrated reporting, but what exactly is it? Jonny McCaig of Radley Yeldar explains

Q: Is integrated reporting right for my organization?

A: Integrated reporting is essentially connected story-telling, linking business strategy with sustainability risks and opportunitiesborn out of (ideally) integrated thinking. It is not a replacement for sustainability reporting.

There is growing evidence that investors see benefit in integrated reporting. Soon to be published research from GRI, the Prince’s Accounting for Sustainability Project and Radley Yeldar will show that more than 80 percent of investors surveyed believe integrated reporting will help in the assessment of company performance.

In time, this may increase the relevance of non-financial disclosure as companies develop a more rounded view of performance beyond purely financial terms.

For companies at the leading edge of sustainability – such as P&G, GE and Syngenta – integrated reporting offers the potential for business transformation through progressive, integrated thinking.

For these organizations, integrated reporting could lead to the creationof shared value for people and the planet while delivering enhanced profits for business.

For companies that have yet to make a step change in their sustainability thinking, integrated reporting offers an opportunity to break away from siloed, backward-looking disclosure on specific corporate sustainability topics, focusing instead on more enlightened conversations with investors about current and future sustainability risks and opportunities.

How advanced are you?

Key to evaluating the integrated reporting opportunity is gauging how advanced your integrated thinking is. To determine this, ask the following questions:
Have you identified and prioritized short, medium and long-term sustainability risks and opportunities, and their potential impact on your business?
Do you place similar emphasis on the measurement of both financial performance and non-financial performance?
Do you talk to your investors about how sustainability risks and opportunities might affect your strategy and future business prospects, as part of your overall story?

If you answered mostly ‘yes’ to these questions, the chances are you are already thinking with an integrated mindset. Integrated reporting may therefore offer the potential for business transformation, and a more complete appreciation of your organization’s true value.

If you answered mostly ‘no’, integrated reporting will present an opportunity to initiate a testing conversation about sustainability risk and opportunity.

The path to integrated reporting may seem uncertain, but those who embrace it will benefit from a potentially exciting – and engaging – approach.

Combining integrated thinking and integrated reporting could lead to new opportunities for people, the planet and – ultimately – the bottom line.

Jonny McCaig is a sustainability consultant at Radley Yeldar.