Foreword Why we need Integrated Reporting The context within which businesses operate is subject to fundamental change. Rising resource prices, climate change and a growing global population on a finite planet are trends shaping the future of business, with customers, employees and governments providing additional pressure for business to respond. Integrated reporting provides a way for companies to understand this changing context and demonstrate their long-term strategy and response, how they have seized the opportunity to innovate and how they are effectively managing risk. Current reporting standards such as International Financial Reporting Standards require organisations to produce a true and fair view in audited financial reports. Often, these reports do not fully set out how social, environmental and economic factors impact the business’s ability to create and sustain value now and in the future. Some companies produce ‘Sustainability’ or ‘Corporate Responsibility’ reports which consider these factors. However, these reports do not necessarily connect the risks and opportunities with the business strategy and model. Integrated reporting demonstrates the linkages between an organisation’s strategy, governance and financial performance and the social, environmental and economic context within which it operates; and not in disconnected sections or silos but in a concise and integrated manner, which reflects the reality that all these elements (financial, governance, social and environmental) are closely related and inter-dependent, and flow from the organisation’s overall strategy. By reinforcing these connections, integrated reporting can help companies, investors and others to make robust decisions that will lead to long-term, sustainable economic and social value. Contents Introduction Towards an international integrated reporting landscape Methodology International Summary Tracking the journey towards international integrated reporting Country statistics Framework for identifying ‘integrated thinking’ in reporting Appendices 1 2 3 4 6 8 16 26 In August 2010, integrated reporting developed globally with the formation of the International Integrated Reporting Committee which brings together a powerful cross section of representatives from the corporate, accounting, securities, regulatory and standardsetting sectors to develop a new internationally accepted approach to reporting. This is a significant step forward for integrated reporting and a daunting task, but it is a task that cannot be shirked if the information needed so urgently to meet the challenges of the twenty-first century is to be provided. Black Sun’s suite of reports on integrated reporting, of which ‘Towards Global Sustainability’ is the first part, provide important insights into the current integrated reporting landscape across the world and highlight practical steps that companies can take in response. Jessica Fries, Director International Integrated Reporting Committee and The Prince’s Accounting for Sustainability Project www.blacksunplc.com © Black Sun Plc 2011 1