Advances in credible reporting and value creation driving new dialogue with the market

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As revealed in the findings of our global investor survey, the capital markets are demanding new, more integrated approaches to corporate reporting. But the impetus for change is not coming from outside stakeholders alone. CEOs, CFOs and company directors are all beginning to recognize the potential to better demonstrate responsible business practices across the enterprise, while at the same time tapping new sources of business value.

Our Climate Change and Sustainability Services (CCaSS) practice expects more companies to begin formalizing efforts around measurable, objective and relevant nonfinancial reporting by defining criteria and measurement requirements for their nonfinancial indicators, establishing robust data management processes and making the transition to external assurance. That journey will require changes in integrated reporting practices, as value measures mature and companies embrace the potential of a more real-time, digital dialogue around performance.

Our publication, “Integrated reporting: linking strategy, purpose and value,” explores the potential for reporting to go beyond financial capital to recognize the shared value an organization creates for its stakeholders, as well as society and environment.

A more integrated view of capital

In keeping with latest thinking from the International Integrated Reporting Council and other leading groups, there are six key capitals that reporting entities may find useful when considering disclosure practices:

  1. Natural capital – resources that cannot be replaced (water, fossil fuels, crops, etc.) and are essential to a functioning economy
  2. Human capital – the skills, know-how, commitment and motivation of personnel
  3. Social and relationship capital – relationships between an organization and its stakeholders, including communities, governments, suppliers and customers
  4. Intellectual capital – the intangibles associated with brand and reputation as well as intellectual property, systems and procedures
  5. Manufactured capital – physical infrastructure or technology associated with the business
  6. Financial capital – the common measurement of performance, focused on funds obtained through financing or productivity

For more information, including the challenges and key drivers behind integrated reporting, please download our full report here.

Please revisit this site for future commentary on the business reporting agenda from our Climate Change and Sustainability Services business.