Leading companies have turned to integrated reporting to illuminate material financial and non-financial value drivers.
Over the last 20 years, investor and stakeholder reporting expectations have evolved.
In addition to traditional financial performance measurements, companies are asked for more complete non-financial performance metrics and measurements. This change reflects a paradigm shift in market evaluation, where for many companies their intangible value now constitutes the major part of their market value.
Leading businesses have responded by publishing sustainability reports, which include environmental, social and governance data in addition to financial disclosures.
However, investors and other stakeholders need reports that do more than merge best practices from financial (management and measurement) reporting and non-financial (operational, structural and risk management information) reporting. They need clarifying information.
Leading companies have turned to integrated reporting to manage, measure and clarify material financial and non-financial value drivers. This has two benefits:
- A holistic view of a company’s short-, medium- and long-term value.
By aligning business practices, tangible and intangible assets, and material financial and non-financial capital risks with a company’s strategic focus, sustainability agendas and future goals, the integrated report can provide a comprehensive picture of short-, medium- and long-term company value.
- Improvements in brand value and viability, company policy and bottom line.
During the process of combining information for an integrated report, a company must collect material information across business departments, requiring connectivity across every level of the business and providing a foundation to embed sustainable business practices. Through increased efficiencies and collaboration, this “integrated thinking” has the potential to provide lasting benefits that improve brand value and viability, company policy and the bottom line.
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