Thursday, December 13, 2012

The Future of Integrated Sustainability Reporting

Corporate transparency is moving towards an integrated report in which financial and non-financial performance are tied together and articulated in a single document. Although as yet there is no formal standard as to what constitutes an integrated report, it is becoming clear that the sustainability reporting benefits a company. Research shows that financial markets reward those companies that engage in sustainable behavior and comprehensive disclosure.

As reviewed in an Ethical Corporation interview with Robert Eccles, Professor of Management Practice at Harvard Business School, integrated sustainability reporting is a trend continues to grow.

Eccles has published two books that addressed sustainability reporting and he has been a driving force in this area for almost two decades starting with a 1995 paper he published in the Sloan Management Review with Sarah Mavrinac called “Improving the Corporate Disclosure Process.”

This paper revealed that while the market was interested in non-financial information, companies were not disclosing information on sustainability.

In a 2010 book titled One Report: Integrated Reporting for a Sustainable Strategy, Eccles wrote with Mike Krzus they explored the idea of “integrated reporting.”

Eccles says that "the vast majority of investors aren’t interested in sustainability reports. This is not surprising since they are not the target audience for them. Sustainability reports are meant for a broad range of stakeholders, most of whom have a very particular environmental, social or governance interest."

However they are interested in integrated reporting which is intended for investors, as well as for those stakeholders who want a more holistic view of the company’s performance.

Eccles goes on to say that "Even so-called mainstream investors are increasingly recognizing that a company’s ESG performance increasingly affects its ability to create value for shareholders over the long term, and can even put its license to operate at risk."

Eccles believes that 2013 and beyond should be a very exciting time for integrated reporting. He does not expect that mandated reporting will happen in the US any time soon.

Although he says that "Mandating disclosures is something that needs to be done by the state." He goes on to say that "I don’t expect to see much in the way of mandating specific disclosures in any country. I also don’t think that this should happen. Mandating specific disclosures is contrary to the spirit of integrated reporting and ignores the fact that what should be disclosed is a function of a company’s sector and strategy."

Eccles expects that many more companies will be issuing integrated reports on a voluntary basis. He also says that "companies will be increasingly sophisticated in how they are leveraging the Internet to make integrated reporting an active and engaging exercise with shareholders and other stakeholders where they listen as well as talk."

Related Articles
Corporate Sustainability Reporting: To Disclose or Not to Disclose
10 Sustainability Initiatives for Small Businesses
Small Businesses Need to Embrace Sustainability Too
Message to the Federation of Small Businesses: Every Business Can Go Green (Video) 
The Growth of Corporate Sustainability in 2013
Communications Disconnect Revealed by the Sustainability Leadership Report
Project Management of Corporate Sustainability; Implementation Perspectives (White paper)
The Business Community is Moving Forward with Sustainability
CFOs are Embracing Sustainability and Seeing Benefits
The 8 C's of Sustainability Branding by Marc Stoiber
The Green Economy is the Right Solution for our Troubled Times
Corporate Sustainability is Driving Green the Green Economy
Launching of the New Global Green Economy
The False Choice Between the Economy and the Environment
A Private Sector Approach to Clean Technology from the CTTA
Data Shows that Sustainability Pays
The Growth of Sustainability as Revealed by 3 MIT Reports
Sustainability Offers a Competitive Advantage & Better ROI
The CDP Identifies Germany as the Global Sustainability Leader
CDP Report Shows a Growing Number of Companies See the Risks Posed by Climate Change
Top Ten Companies in the 2012 Carbon Disclosure Project Report
Call to Service: Teaching Sustainability at Business Schools
The Business Case for Sustainability from a Skeptic (Video)
Sustainability Nears a Tipping Point
Investors and Global Sustainability
MIT Survey Shows More Businesses are Embracing Sustainability and Turning a Profit
Sustainability Success Kit from Enviance
Sustainability (Sustainable) Defined
Top 10 Global Sustainability Leaders (Report)
Global Survey on Sustainability
The GRI Sustainability Reporting Framework
The New Sustainability Advantage
Corporate Sustainability Experts Want a Tax
Corporate Sustainability Experts Scoff
China's Twitter Users Focused on Sustainability
Spring of Sustainability (Video)
Corporate Sustainability Strategies in Asia Part1 (Video)
Sustainability Methodology (Video)
Sustainability in the Workplace Low-Hanging Fruit (Video)
The Benefits of Sustainability in Business (Video)
How sustainability can Save your Business (Video)
The New Sustainability Advantage (Book)
Sustainable Business Methods, Strategy, Management and Reporting
Sustainable Successes and Failures
Cost Benefit Analysis of Sustainable Business
Sustainable Practices are a Strategic Priority for Business
The Overwhelming Logic of Sustainable Business
Sustainability is an Unstoppable Megatrend
Cooperation Between Environmental Organizations and Businesses
Best Green and Sustainable Business Twitter Feeds
10 Sustainability Business Pledges
10 Great Companies Who Were Green Before It Was Cool"
Ten Things New Sustainability Managers Need to Know
Best Practices for Sustainable Businesses
Best Practices for Communicating Sustainability
Best Practices for Engaging Employees in Sustainability
Sustainable Supply Chains
Environmental Revolution: Leadership and Morale
Environmental Revolution: Technology Certification
Environmental Revolution: Building and Operations

No comments: