Integrated Reporting Dr Jack Christian PhD MBA ACMA MCIM PGCE Manchester Metropolitan University Business School j.christian@mmu.ac.uk

Challenges facing business Creating value Telling a story Integrated Reporting Overview: A brief history Challenges facing business Creating value Telling a story Guiding principles Content and presentation Global management accounting principles Going forward

Environmental management accounting The Triple Bottom Line Integrated Reporting A brief history: A finite Earth Our Common Future Environmental management accounting The Triple Bottom Line The UN Global Compact The Global Reporting Initiative Stakeholder Engagement

Challenges facing business Creating value Telling a story Integrated Reporting Overview: A brief history Challenges facing business Creating value Telling a story Guiding principles Content and presentation Global management accounting principles Going forward

Challenges facing business Creating value Telling a story Integrated Reporting Overview: A brief history Challenges facing business Creating value Telling a story Guiding principles Content and presentation Global management accounting principles Going forward

Challenges facing business Creating value Telling a story Integrated Reporting Overview: A brief history Challenges facing business Creating value Telling a story Guiding principles Content and presentation Global management accounting principles Going forward

Challenges facing business Creating value Telling a story Integrated Reporting Overview: A brief history Challenges facing business Creating value Telling a story Guiding principles Content and presentation Global management accounting principles Going forward

A finite Earth

Our Common Future In 1987the United Nations World Commission on the Environment and Development commissioned the “Our Common Future” report (sometimes know as the Brundtland Report). This Report defined Sustainable Development as "development that meets the needs of the present without compromising the ability of future generations to meet their own needs."

Environmental management accounting? According to Van der Veen (2000) it began in the USA in the 1980s with a view to ascertaining costs and benefits of pollution control Van der Veen defines it as “the process of identification, measurement, accumulation, analysis, preparation, interpretation and communication of financial and non-financial information used by management to plan, evaluate and control the environmental aspects of an organisation.” When I started research I was surprised to find EMA had a 30 year history. I only heard of it 2 or so years ago although it has become more widely known lately

The Triple Bottom Line Silent Spring The Middle East Wars Dhopal

The UN Global Compact What is the UN Global Compact? “ The Global Compact asks companies to embrace universal principles and to partner with the United Nations. It has grown to become a critical platform for the UN to engage effectively with enlightened global business.” – UN Secretary-General Ban Ki-moon

The Global Reporting Initiative “the successful company of tomorrow will have an integrated strategy to achieve financial results and create lasting value for itself, its stakeholders and society.” however “a focus on a single bottom line cannot offer sufficient assurance that a company will survive, or help it innovate for future improvements and success” Going beyond the single bottom line of profitablity

Stakeholder Engagement The AA1000 Series of Standards is based on the principles of: Inclusivity - people should have a say in the decisions that impact on them Materiality - decision makers should identify and be clear about the issues that matter Responsiveness - organizations should act transparently on material issues

Integrated Reporting Trust Connectivity Complexity Long term focus The challenges facing businesses: Trust Connectivity Complexity Long term focus Communication P4 Also notes on intangible assets – p14

Integrated Reporting Helps by: Creating value Telling the story

Tuning into the external environment Integrated Reporting Creates value by: Tuning into the external environment Using this intelligence to inform strategy and decision making Focusing on a longer term time horizon Building this thinking into the implementation of the business model List some of challenges/opportunities – p10 Link to governance – ext slide

Integrated Reporting Law Ethics Guidance Insight Governance: Law – p11 and p28 Ethics – p11 Guidance – pp 28 -29 Insight – p11

Tuning into the external environment Integrated Reporting Creates value by: Tuning into the external environment Using this intelligence to inform strategy and decision making Focusing on a longer term time horizon Building this thinking into the implementation of thebusiness model

Integrated Reporting Inputs Business activities Outputs Outcomes The Business Model: Inputs Business activities Outputs Outcomes Unilever Integrated Thinking – pp6-7

Social and relationship Integrated Reporting The Capitals: Financial Manufacture Human Intellectual Natural Social and relationship Prototype framework 2.14 Reports should note any material changes

Integrated Reporting Investors Employees Other Stakeholders Tells a story to: Investors Employees Other Stakeholders Quote on p13 Investors pp 15 – 19 Employees p20 Others p21

Strategic focus and future orientation Connectivity of information Integrated Reporting Guiding principles: Strategic focus and future orientation Connectivity of information Stakeholder relationships Materiality Conciseness Reliability and completeness Consistency and comparability Principles based approach with senior management and those charged with governance left to exercise judgement to determine what is material Also note the report is aimed at investors as it is assumed that the interests of society and long term investors are congruent. p26

Organizational overview and external environment Governance Integrated Reporting Content: Organizational overview and external environment Governance Business Model Risks and opportunities Strategy and resource allocation Performance Outlook Basis of presentation Reports suitable to all sizes and types of business and supplementary to legal requirements p27

Integrated Reporting Materiality Frequency Time frames Boundaries Preparation: Materiality Frequency Time frames Boundaries Aggregation Signatories Technology Assurance Section 5 of principles

Integrated Reporting What is our definition of value Going forward: What is our definition of value What is our business model How do our decisions impact on it How does it create value What is special about our organization What changes are likely in our business environment Do we need to/can we adapt Can we see any opportunities Do our information systems/KPIs fully inform us of all impacts

Integrated Reporting To what extent are we trusted Going forward: To what extent are we trusted Does this differ by stakeholder group Can we describe our business model and value creation process adequately Do our stakeholders understand our description Which functions are involved in reporting Do they work together How do we assess our performance Have we missed anything

Integrated Reporting Going forward The Oxfam Doughnut The United Nations Sustainable Development Goals A reminder of what is at stake.