Corporate SoS: Integrated Reporting & Standards

Integrated reporting and sustainability standards landed on the corporate radar of global sustainability leaders in 2012.

The goal of integrated reporting is a more accurate and complete picture of the company’s performance, governance and strategy, and its future prospects.

To achieve this goal, integrated reporting tries to pull together financial information about the commercial, social and environmental context of the company in the same report.

The big problem with current reporting is that this information tends to be scattered across financial disclosures and corporate sustainability reports. Even if found together, the social and environmental aspects are not monetized.

2012 was the year in which three key related developments began to come together.

First, the environmental impacts of business began to get quantified financially through outstanding work by the TEEB for Business Coalition, PUMA’s pioneering Environment P&L Coalition, Dow’s natural capital evaluation pilots, and other initiatives. Social impacts, while more difficult, are not be far behind.

Second, a framework for integrated reporting began to be put together through the outstanding efforts of the International Integrated Reporting Council (IIRC). This was a follow-up to a terrific and highly readable position paper on integrated reporting published the previous year.

Third, the effort to create accounting standards for sustainability reporting got started through the Sustainability Accounting Standards Board (SASB). These voluntary standards will provide the broader context in which reporting and other activities can take place.

On the whole, while these trends are very new, they will come together quickly as the pressure on companies to treat sustainability as a financial issue begins to increase.

Here’s what you can do as a corporate sustainability champion in your company:
1. Stay up-to-date on these changes through the TEEB for Business, IIRC and SASB.
2. Even better, join these organizations and help shape their work.
3. Keep your CFO in the loop, so that they are ahead of these developments.
4. Explore the business case for these initiatives, at least through an evaluation.