A financial report primarily looks at the company itself, while a non-financial report looks beyond the company’s boundaries. Non-financial reporting – basically – has nothing to do with sustainability reporting: however the sustainability report can be a non-financial report that explains the values associated with sustainability. Integrated reporting can help to report financial and non-financial topics in one report.
Years ago, attempts were made to see the benefits of sustainability reporting in risk prevention. But pure risk avoidance is not a good advisor. We live in a time in which the democratization of decision-making processes is advancing: The customer decides at the POS. Business events postulate: So far banks have told customers what to do; now customers are telling banks what to do.
In corporate reporting, too, the customer will set the tone more and more. It is not a question of whether your stakeholders expect more co-determination, as they did a few years ago, but only how much. Do not be afraid of losing control but see this as an opportunity.
The choice is yours: You can either continue to make annual reports for investors only or you can go beyond the company boundaries and analyse the impact your company has on society. Don’t bore anyone with reporting on committee meetings, don’t tell anyone about human rights you’ve never really contributed to as a company, and don’t pretend you can avoid corruption in your company if you haven’t. Instead, report on your performance, its impact on society, and the benefits you bring as a company.
The integrated report – which integrates financials and non-financials – will become more and more the reporting standard, as it makes sense to look at the financials through the non-financials. And NGOs and other stakeholders are now demanding change.
When preparing an integrated report, do not hide behind the scientific aspect of reporting, but concentrate on things that are essential. In the organization you need your own department for impact analysis of your company. In the near future it is not you as an entrepreneur who decides what is important, but your interest groups – this is what the materiality analysis says. A stakeholder management department is necessary if you want to maintain control over the impact analysis of your business, because message control cannot be created over back-office departments.
The trends for integrated reporting are clear:
- Less is more
- Use a clear visual language that illustrates your impact as a company on society
- And integrate report parts or reports wherever possible – according to IIRC
Have the courage to create a truly integrated report. Contact us!