Two research studies released today demonstrate the significant changes to behaviour triggered by Integrated Reporting <IR>. They reveal strong evidence of positive impacts on business engagement with external stakeholders, strategic benefits including better decision-making, and the importance of Integrated Reporting in helping to meet the needs of investors.
The International Integrated Reporting Council (IIRC) research, conducted in partnership with corporate communications specialists Black Sun, revealed that 91% of all respondents have seen a positive impact on external engagement with stakeholders, including investors. Of those that have published at least one integrated report, 87% of businesses believe investors better understand their strategy.
Profound impacts on strategic factors, and crucial developments in integrated thinking were revealed, with 79% of respondents reporting improvements in decision making, 68% reporting a better understanding of risks and opportunities, and 78% seeing better collaborative thinking by the board about goals and targets.
The study was conducted with participants of the three year IIRC Pilot Programme – a network of 140 businesses and investors from 26 countries that have helped the IIRC develop and test the International <IR> Framework, published in December 2013 – the most significant milestone in the <IR> journey.
Further research released today by PwC shows that nearly two thirds of investment professionals (63%) who responded believe that the quality of a company’s reporting – including information about strategy, risks and other drivers of value – could have a direct impact on its cost of capital.
Paul Druckman, CEO, IIRC said, “I am delighted to see the very significant positive impact that <IR> is having on businesses that have taken a lead in making their corporate reporting and thinking fit for purpose. It is crystal clear from this new research that adopting <IR> is leading to important breakthroughs in organizations’ understanding and articulation of how they create (and destroy) value – a staggering 92% of respondents say it has improved their understanding of value creation. It is also encouraging to see that <IR> can give investment professionals more confidence and enhance their analysis.”
The research is launched at the fourth annual IIRC Pilot Programme Conference, held in partnership with PwC, who are contributing to and standing behind Integrated Reporting as a means of helping business bridge the gap between investor expectations and the information they are providing externally through more integrated thinking internally.
The Conference marks the move of <IR> from its testing phase to mainstream adoption, and sees the launch of the new <IR> Business Network, which will be a key driver for adoption in different markets and sectors, and will ensure the market relevance of integrated thinking and the integrated report. This is supplemented by other networks for investors, pension funds and public sector pioneers.
Druckman said, “Businesses from all parts of the world are joining this network, to drive the global adoption of <IR> and ensure it remains relevant for all regions and industry sectors. As businesses start to use <IR> as a tool to better understand the connections between key resources and relationships that contribute to their success, to manage risks and opportunities, and as a result make more informed decisions, the real value of integrated thinking and the integrated report for businesses will be realized.”
Organizations from every continent are preparing to join the <IR> Business Network. Roberto Pedote, CFO, Natura (Brazil) said, “Businesses in South America are now preparing for Integrated Reporting as evidence shows that reports are extremely valuable not only to investors but for the business processes. Natura have reported a significant innovation in its annual report as a result of being a member of the IIRC Pilot Programme, releasing a much more strategic information package connecting short-term KPIs with long-term value creation. An integrated report should be the result of a whole strategy and integrated thinking should be key to the company management. We are looking forward to continuing our journey in the <IR> Business Network.”
NOTES TO EDITORS
‘Realizing the Benefits: The Impact of Integrated Reporting’, by IIRC and Black Sun, September 2014. The full research report can be found here.
‘PwC’s Corporate Performance: What do investors want to know?’, September 2014. The survey was undertaken with global buy/sell-side institutional investors. The full report can be found here.
The International Integrated Reporting Council (IIRC) is a global coalition of regulators, investors, companies, standard setters, the accounting profession and NGOs. Together, this coalition shares the view that communication about businesses’ value creation should be the next step in the evolution of corporate reporting. A link to the International Integrated Reporting Framework can be found here. Follow us on Twitter and LinkedIn.
About PwC – PwC helps organisations and individuals create the value they’re looking for. They are a network of firms in 157 countries with over 184,000 people who are committed to delivering quality in assurance, tax and advisory services.
About Black Sun – Black Sun is a leading independent strategic corporate communications consultancy. It is the partner of choice for forward-thinking companies, from small businesses to large global organisations, to tell their corporate story more effectively, and build greater trust and confidence with their key stakeholders. With over 20 years’ experience, the consultancy’s unique blend of strategic consultancy, engaging creativity and integrated communications management across all channels enables Black Sun to transform how people experience corporate stories.
The IIRC Pilot Programme Conference takes place in Madrid, 24 – 26 September 2014. Senior representatives from the IIRC Pilot Programme organizations from around the world are gathering to share insights and experiences, learn the latest thinking on <IR> and collaborate on successful approaches to unlock the potential of <IR> for their organizations. This year’s conference celebrates the contribution the Pilot Programme participants have made over the three-year programme on their <IR> journey, and also marks the launch of the new <IR> Business Network, which will be a key driver for adoption in different markets and sectors.
The <IR> Business Network will be made up of organizations committed to the adoption of <IR>. These organizations, who are embracing integrated thinking and driving innovation in reporting, will be at the forefront of this evolution in corporate reporting.