The rise of integrated reporting
According to a recent study, 600 integrated reports were published globally in 2013 in which companies simultaneously highlight both their financial and CSR performance—this increase shows that integrated reporting is on the rise.1
The International Integrated Reporting Council (IIRC) started the Pilot Programme in October 2011 to encourage integrated management as a core business strategy.
Three years later, companies such as Microsoft, PepsiCo, Southwest Airlines, and Prudential Financial have joined leading companies in over 25 countries who present a holistic assessment of their activities in a single document. In fact, in December 2013 the IIRC introduced formal guidelines for integrated reporting in order to help companies who wish to follow the example set by their peers. 2
The 100th participant in the IIRC Pilot Programme was Deutsche Börse Group, a Germany-based stock exchange with approximately 765 listed companies. Deutsche Börse was the first stock exchange to become an integrated reporter. It is one of a number of stock exchanges around the world that have joined the United Nations Sustainable Stock Exchanges (SSE) initiative designed to improve the level of quality and transparency of disclosures by listed companies.
This initiative was also meant to increase collaboration between listed companies and their stakeholders on environmental, social, and governance issues.3 By publishing an integrated report, Deutsche Börse is following the same rules companies listed on its exchanges are required to follow.
Why are major companies and stock exchanges publishing integrated reports?
Compared to the traditional standalone financial and sustainability reports that are published separately, integrated reports offer a concise and holistic view of how the company manages risk and develops new business opportunities. The Investor Network on Climate Risk (INCR) has engaged with NASDAQ and NYSE Euronext in an effort to promote the SSE initiative.4
As one study put it, the question is no longer if a company should report on its CSR initiatives, but rather how, and in what format so as to provide stakeholders with a complete picture of the company's overall performance.5
1 "CR Perspectives 2013: Global CR Reporting Trends and Stakeholder Views." (2013). CorporateRegister.com. Retrieved from http://www.corporateregister.com/search/report.cgi?num=58958-QdDeF/JivVo
2 "The International Framework." (2013). The International Integrated Reporting Council. Retrieved from http://www.theiirc.org/wp-content/uploads/2013/12/13-12-08-THE-INTERNATI...
3 "Data & Research: Stock Exchanges Fact Sheets, German Exchange (Deutsche Borse)." (2014). Sustainable Stock Exchanges Initiative. Retrieved from http://www.sseinitiative.org/fact-sheet/db/
4 "Stock Exchanges and Sustainability." (2013). Investor Network on Climate Risk, a project of Ceres. http://www.ceres.org/investor-network/incr/sustainable-stock-exchanges
5 "The KPMG Survey of Corporate Responsibility Reporting 2013." (2013). KPMG International Cooperative. http://www.kpmg.com/Global/en/IssuesAndInsights/ArticlesPublications/cor...