Integrated Reporting

The case for change has been made

To build trust, raise capital and drive sustainable growth today, some companies are starting to think more holistically about their strategies, activities, values and behaviours.

This more integrated thinking will help organisations to make the most of the new opportunities and improve risk awareness as well as risk management. And to achieve this, companies need to look beyond the current reporting model that’s rooted in past financial performance to give stakeholders a clearer, more forward-looking perspective on the business.

A framework to help structure relevant communication

The International Integrated Reporting Council’s (IIRC) Integrated Reporting Framework is a positive step that provides an opportunity for companies to start to assess and address connectivity across their business and to communicate more relevant information more clearly, without spin. Designed around six capitals, it focuses on getting companies to describe their value creation in the short, medium and long term. The framework allows companies to assess where they stand today, and what improvements they need to make going forward – a catalyst for integrated thinking and integrated internal and external reporting.

Integrated thinking and reporting – challenges and benefits

  • Overcoming silos – current reporting often shows a lack of connectivity, perhaps reflecting the reality of organisational behaviours and diverse information sets. Better connection between different internal departments is seen as a key benefit of integrated thinking and reporting.
  • Looking to the future – many reports adopt the ‘rear view mirror’ approach, focusing on the last year’s performance. An integrated report should have forward-looking elements, using current information to shape strategic insight over the long term.
  • Describing value creation – many companies’ reports lack insight into how dependent they are on key relationships and resources outside the organisation to create value. And it’s rare to get a clear sense of how the dynamics of their risks and opportunities are evolving. Integrated thinking and reporting encourage a broader perspective, better understanding of the wider impacts and how these factors feed into the business model and drive sustainable value creation.
  • Measuring performance – current reporting remains largely focused on financial performance. Measuring the impact an organisation has beyond traditional reporting boundaries and across multiple “capitals” is at the heart of the value of integrated thinking and reporting.

How PwC can help you

Challenges and questions remain. The Integrated Reporting Framework is a useful starting point, but companies also need to generate relevant and reliable information in the first place, and have an objective way of measuring their progress towards more integrated reporting.

Ask yourself…

  • Would I invest in my company or choose to work for it based on what is presented externally?
  • Is the market value of my company a fair reflection of the business?
  • Are we telling a consistent story to all of our stakeholders?
  • Is too much time spent producing the numbers, rather than gaining real insight?
  • Do I have the market insight and non-financial information needed to stay ahead?

Contact us

Voon Hoe Chen

Financial Reporting and Accounting Advisory Leader, PwC Singapore

Tel: +65 9817 0978

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