How firms are moving the needle on integrated reporting

In the past few years, the gradual emergence of integrated reporting has presented an alternative to the usual stand-alone corporate sustainability reports filed by the vast majority of companies.

Integrated reporting aims to provide comprehensive disclosure of a company's finances, governance, strategy and prospects while reflecting the commercial, environmental and social context in which it operates. While only a relatively small cohort of companies has so far issued such reports, its size is growing steadily.

What are the current best practices used by these early pioneers of integrated reporting? That's what my colleagues and I wanted to find out when we undertook a study of the state of integrated reporting as it is being tested and applied by industry leaders in order to gauge progress in the field. The full research paper is available at our site.

To get a sense of how companies are interpreting and approaching this new frontier on their own terms, we reviewed a sampling of current reports self-declared by their issuers as "integrated." We intentionally did not focus on participants in the important International Integrated Reporting Council Pilot Programme Business Network, although one company in our sample, National Australia Bank, does participate in that initiative. 

To construct our sample, we began with 193 reports in the GRI Sustainability Disclosure Database published by large companies between 2011 and 2012 that were self-identified as integrated. Winnowing this group down by applying various criteria, one of which was inclusion on Fortune's Global 500 list, we ultimately arrived at a group of 12 that are seen as leaders in their industries and reasonably can be expected to have operations, impacts and reach that is typical for large companies in similar sectors.

The approaches and degree of integration in our sample varied greatly, which is not surprising for a new disclosure format that as of yet has no fully codified or commonly accepted guidelines. A couple displayed genuinely integrated thought and discussion, a few others included fairly limited references to financial performance in an otherwise mostly conventional sustainability report, and the rest were distributed along the middle of the bell curve, showcasing a variety of experiments in correlating sustainability and financial performance.

Next page: The findings