Member Sign In | Not a member? Register Now
The quest for the ‘Holy Grail’ of integrated financial and CSR reporting
Companies should issue one report for stakeholders, argue Robert Eccles and Michael Krzus.
John Elkington, the founder of SustainAbility who developed the concept of, and coined the term, “triple bottom line reporting” in 1994, recently referred to the integration of financial and corporate social responsibility reporting as the “Holy Grail” of corporate public disclosure. It is a Holy Grail that remains elusive. At the same time that Elkington announced his concept of triple bottom line reporting, he also said that the long-term goal should be “the eventual integration of economic, financial, social and environmental reporting.” Reporting this way is clearly not the case today. However, due to efforts by forward-thinking people like Elkington, Mervyn King (chairman of South Africa’s King Committee which has issued three reports on corporate governance since 1994, the latest in 2009), and Robert K. Massie (former director of Ceres and co-founder, along with Allen White, of the Tellus Institute), organizations like Ceres, the Global Reporting Initiative (GRI), The Prince of Wales Accounting for Sustainability Project (A4S), Business for Social Responsibility and social investment funds and associations all over the world, substantial progress has been made over the past 10 to 15 years in voluntary non-financial reporting (called by such names as corporate social responsibility, sustainability, or environmental, social and governance reporting). While there is no consensus definition for any of these terms and they certainly aren’t synonyms for
each other, the good news is that more and more companies are making an effort to report to shareholders and other stakeholders on their goals and performance on outcomes that are related to financial performance to varying degrees. Even better, a few leading companies around the world are starting to practice Elkington’s Holy Grail of integrated reporting. While the number is admittedly small—we know of less than 20 but our list is by no means definitive – it includes some well-known and respected companies such as Alstom in France, BASF in Germany, HSBC in the United Kingdom, Novartis in Switzerland, Novo Nordisk in Denmark, Philips and TNT in the Netherlands, and United Technologies in the United States. Some are less-well known but very interesting companies such as Aracruz and Natura in Brazil, and Novozymes in Denmark. There are even private companies like van Gansewinkel Group in the Netherlands which isn’t required to report anything at all. Most of these companies have been issuing an integrated report for a year or two. The fact that they are in such different industries in many countries means that is it highly unlikely they knew about each others’ efforts. This is an indication that integrated reporting is an idea whose time has come. We could be at a turning point in history when this practice will grow rapidly, initially by voluntary adoption and eventually through regulation. Integrated reporting is required by the King Code of
Page 1 of 3 | Next »