Most organisations recognise the growing influence of integrated reporting on value-creation storytelling for investors. The ability for organisations to communicate concisely and comprehensively while providing a link between financial and non-financial capitals is an important insight derived from an integrated report.
When overlaid against the global adoption of the IFRS sustainability disclosure standards, IFRS S1 (General Requirements for Disclosure of Sustainability-related Financial Information) and IFRS S2 (Climate-related Disclosures), the case for integrated reporting is more compelling, driving change across the corporate reporting landscape.
The traditional reporting approach of the past is no longer suited for addressing these stakeholder demands for relevant, decision-useful information today.
Investors are also seeking information on how organisations are managing non-financial issues and how these are impacting their financial performance, an objective that can only be met with a holistic approach to reporting provided by the integrated report.
Making the switch to integrated reporting can be a smooth and well-managed process for an organisation. Organisations need to leverage what already exists and map out a plan to address the identified gaps.
Following the requirement in IFRS S1, that IFRS sustainability disclosures be provided at the same time and using a similar scope of entities as the financial statements, organisations must include these considerations when making this switch.
One important step is to assemble a multidisciplinary team drawn from the different functions across the organisation. This is required because the scope of the integrated report extends beyond financial and compliance matters. Therefore, this team will be critical to getting the non-financial data required for integrated reporting.
Another important ingredient for a smooth transition is investing in capacity-building tailored to different audiences across the organisation. It will ensure that internal stakeholders appreciate the business case driving the switch to integrated reporting and can clearly identify how they contribute to a successful outcome.
A critical step is mapping the information gaps, developing a roadmap to address them with clear timelines, and allocating responsibilities for delivering these objectives. Developing an accountability framework will ensure that the set goals are achieved.
Akinyemi Awodumila is a Partner at PwC Kenya. He is an author who writes and speaks widely on corporate reporting topics.
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