A turning point, because it changed how we viewed our role and potential to create meaningful, long-term value. Did we realise the significance at the time? I am not sure. But today, we are very aware of it.
That year we published our first integrated report. It was the year we chose not only report on the financial value we created in the past, but on a broader value we could create in the future.
It was exciting. It was new. And it was challenging for us.
There was no legislation demanding it. Risk and cost factors were cited as a downside. The upside wasn’t immediately clear to everyone. We simply knew this was the next step for us, as it had been for others, but we needed guidance.
While researching how best to report our value creation across the 6 different capitals, we realised that there was no single standard. No clearly defined and agreed route. The options were vast.
An overwhelming number of standards and frameworks on offer in the corporate reporting field. It was a maze of approaches and guidelines. The responsibility was on us to navigate these and choose the most appropriate one. Deciding on which one, required time, energy and commitment. It was not easy.
The IIRC framework was the one we chose.
Why the IIRC?
We saw integrated reporting as a way to embed integrated thinking. It was a means to an end.
Our feeling was that the IIRC framework with its 7 principles was best suited to facilitate this. It would help to drive people to think with us, rather than simply forcing them to comply with a long list of directives and rules.
At the same time, we needed to engage our stakeholders in a simple, clear and compelling manner. The framework’s simplicity and scope enabled us to take a more inclusive and engaging approach.
Ultimately, our Executive Committee and finance team agreed. And so, the 7 principles became our compass.
As a financial institution, we are very comfortable with numbers. We work with clear accounting frameworks and experienced accountants check and validate our financial reporting.
Integrated reporting required us to integrate the principles in to our complex and detailed annual report that was mainly guided by the IFRS framework. Two dramatically different reporting frameworks had to work together and complement each other.
At face value, the synergies were not immediately identifiable. However, perseverance and a shared willingness across our bank, meant that we published our first integrated report in 2015 detailing the 6 different capitals and our value creating ambitions and achievements. We called it our first attempt on the journey of integrated reporting. We improved the quality of our integrated report each year and the 2017 report received assurance from our accountancy firm Ernst & Young based on the IIRC Framework.
In hindsight, the fact that integrated reporting was not mandatory was both a help and a hindrance. On one hand the lack of legislation, allowed us to take a more mindful and organic approach, which I believe has led us to a greater depth of integrated thinking today.
On the other hand, it lessened the sense of urgency. There was no regulator demanding that we do this. No government body sending us preordained frameworks. We were on our own, working hard at something that was not on the top of everyone’s list of priorities. We needed to be practical. While always adhering to the highest standards.
Those of us who believed in the power of integrated reporting had to invest significant time lobbying for support.
In addition, the varied standards and frameworks, concerned many of our internal stakeholders. The quantity of frameworks was not so much the issue, it was rather the lack of cohesion and regulation of these frameworks that raised eyebrows.
A lot has changed and is changing since then.
Today in 2019, it is unthinkable that our bank would not publish an integrated report. The reaction has been positive, and we have broadened the reach and readership of our annual report. The report has also driven pride amongst our colleagues, but its impact extends beyond that.
Our reports have truly helped embed integrated thinking in our bank. We are now a bank that puts value creation for all stakeholders at the centre of our strategy. Our purpose-led strategy was launched in 2018 and I believe that our integrated reporting and the subsequent materiality research have influenced this strategy in no small way.
Integrated reporting is not simple. You can get overwhelmed by the sheer volume of frameworks and guidelines. My advice is to just jump in and start. Over time your approach and reports will become better, more concise, more finessed. Don’t wait for perfection before starting to report. Create perfection by reporting!
The next 10 years will see a dramatic rise in what is expected from companies in terms of creating value for all stakeholders and how they disclose this value. The clock is ticking, and in some regards, it is a race. But it should not be a competitive one.
Collaboration, openness and willingness to learn from one another will help us all. It is my hope that not only our standards and frameworks evolve, but in doing so they compel companies everywhere to learn from one another, so that we can create maximum value for generations to come.