Research Summary

Integrated Reporting

by Robert G. Eccles

Description

All public companies are required to publish a financial report.  An increasing number of companies are now publishing a corporate social responsibility or sustainability report on their environmental, social and governance (ESG) performance.  These reports on so-called "non-financial performance" are, with the exceptions of a few countries, done on a strictly voluntary basis although the number of companies doing this has been growing rapidly.  Within the past few years a new trend has begun for "integrated reporting" in which a company combines its financial and non-financial reports into "One Report" with varying degrees of integration.  Of course, One Report doesn't mean only One Report since the Internet can also be used to provide more detailed information and analytical tools of particular interest to different stakeholder groups.  Examples of companies practicing integrated reporting in the United States are Southwest Airlines, American Electric Power, and United Technologies Corporation.  Examples of companies in other countries include Philips in the Netherlands, BASF in Germany, Novo Nordisk in Denmark and Natura in Brazil.  As of June 1, 2010 every company listed on the Johannesburg Stock Exchange must file an integrated report. Professor Eccles has written the first book on this emerging phenomenon, One Report: Integrated Reporting for a Sustainable Strategy.  In it he argues that a sustainable society requires that all of its companies be pursuing sustainable strategies that are based on a long-term focus in value creation for shareholders and all other stakeholders.  Integrated reporting is the best way to communicate the results of such strategies; it is also a useful process for instilling the necessary internal discipline to make sure a sustainable strategy exists.  Importantly, integrated reporting is about more than a company's external communications.  It also involves leveraging the Internet to improve dialogue and engagement with all stakeholders.  In addition to an active research program on integrated reporting, Professor Eccles is also working to help spread the rapid and broad adoption of the practice integrated reporting,  He is a member of the Steering Committee of the International Integrated Reporting Committee (www.integratedreporting.org) and is involved with groups all over the world helping to launch the integrated reporting movement.