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Philippine Institute of Certified Public Accountants

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Invisible Threads: Communicating Integrated Thinking

Invisible Threads: Communicating Integrated Thinking

Report Title: Invisible threads: communicating integrated thinking

Summary of the Report: Well-embedded integrated thinking can make organizations more resilient in the face of challenges, like those that arose from the COVID-19 pandemic.

The integrated reporting process can kick-start integrated thinking, by bringing people from across the organization together through the reporting cycle. At the same time, for organizations to obtain the full benefits, the reports need to communicate this to investors and other external stakeholders.

Key Highlights: This report looks at three key ways in which integrated thinking is communicated in the annual integrated report:

  • clear communication of strategy,
  • pertinent discussions about non-financial value drivers that form the basis of the multi-capitals model, and
  • consistency between the narrative report and the financial statements.

ACCA reviewed fourteen 2019/2020 integrated reports of companies in the IIRC’s <IR> Business Network. The reviews and interviews with some of these companies revealed:

  • Divided views about the purpose of an integrated report, with nearly half of the companies positioning their integrated reports as sustainability reports
  • Strategy and strategic goals are not always communicated coherently: reporting on governance, business model and outlook are often divorced from strategy, and lack consideration of future horizons
  • Despite the increased focus on sustainability, sustainability objectives are not yet fully connected to the overarching corporate strategy
  • Multi-capitals thinking is yet to take root: at present, key value drivers are not discussed consistently through integrated reports, and this may indicate that there is not yet consensus across the business about what the key value drivers are
  • The integrated report is not always consistent or connected with the financial statements, and vice versa: impairments recorded in the financial statements are almost never referenced in integrated reports.

Enhance your integrated thinking and integrated reporting journey with best practice examples and practical tips in the report.

 

Link to the Full Report:
Click here to read the report.