Robert Eccles is a Senior Lecturer at Harvard Business School. He does research on corporate reporting, and has written three books on the subject, including his latest "One Report: Integrated[…]
It’s an obvious idea that’s crucial to building a sustainable society. So why are we behind?
Question: What is integrated reporting and what are some rnof its benefits?
Robert Eccles: rnIntegrated reporting is a very simple idea, it essentially involves rncombing a company’s annual report, which is its financial information, rnwith a voluntary corporate social responsibility or a sustainability rnreport, combining those into a single report to show the relationship rnbetween financial and non-financial performance, which I would define inrn environmental, social, and governance terms. It involves providing rnmore integrated information on the company’s website, so it’s not simplyrn about a paper document, and it also involves leveraging a company’s rnwebsite to provide more detailed information of interest to particular rnstakeholders, as well as for improving dialogue and engagement with rnshareholders and other stakeholders, so it’s as much about listening as rnit is about talking.
The benefits to integratedrn reporting, I think, are many. Number one, it provides a coherent, rnconsistent, and, by definition, integrated message to the entire world, rnso a company isn’t saying one thing to shareholders and another thing torn stakeholders. I think having separate messages in today’s day and age rnis very difficult. It leads to better clarity on the part of the rncompany about the relationships between financial and non-financial rnperformance. Companies are increasingly making the claim that rnsustainability is good for business, integrated reporting is an rnopportunity for them to provide a more coherent and specific explanationrn for why that’s the case. It lowers reputational risk, it improves rnengagement with shareholders, it’s a form of discipline, a company that rnis producing an integrated report by definition will need to have more rnintegrated management of the entire range of performance variables, rnfinancial, environmental, social and governance.
It’srn interesting to see in the past couple of years, this is really rnbeginning to happen, different industries, different countries, rnindependently, simultaneously, I don’t think these companies could have rnpossibly known about what each other was doing, so I think integrated rnreporting is clearly an idea whose time has come. Two days ago, I got rnan email, I participated in a Linked-In discussion about integrated rnreporting. It turns out a major Dutch bank, called Rabobank, is rnproducing an integrated report for the first time and I was reading rnthrough the discussion about what they’re doing, and I laughed, I mean, rnit was like these words had been lifted out of my book, which couldn’t rnbe the case, because they clearly started working on this at least a rnyear ago, and my book only came out a month ago, but the language was rnnearly the same. And so, again, I think it’s just, you know, one more rnpiece of evidence that integrated reporting is one of those ideas whose rntime has come.
When I talk to people about it, rnmy colleagues, they’ll say, “What an obvious idea, it’s a simple idea,” rnand I laugh and I say, “It certainly is, but it’s only happened now.” rn And I think it’s that way with big ideas, they seem obvious once rnthey’ve been stated and I think I’m fortunate to just have for a varietyrn of reasons, been able to notice that this has happened in the corporatern community and try and capture and codify it, to help spread the word rnand to help speed the adoption of integrated reporting, because I think rnit’s absolutely fundamental for a sustainable society.
Recordedrn on April 19, 2010