Integrated Reporting Attracts Dedicated Investors, PwC Report Finds
Investors are increasingly considering non-financial factors such as resource scarcity and looking at a company’s integrated reporting to assess the risks and returns of a company, according to a report by PricewaterhouseCoopers.
To evaluate these risks, management teams are using integrated reporting, a tool designed to show a transparent and accurate view of financial and non-financial factors and a company’s strategy, governance, performance and prospects in the short, medium and long term.
The report, “10 Minutes on Integrated Reporting,” found that as businesses change in response to global megatrends, integrated reporting lets management better articulate their strategy (see graphic). For example, 75 percent of global CEOs say that measuring and reporting total non-financial impacts contributes to long-term success.
PwC’s review of 400 companies revealed that 68 percent incorporate at least some non-financial priorities in their core strategies. And 93 percent of companies using integrated reporting say the practice helps remove barriers between departments.
Evidence in the report also suggests companies that practice integrated reporting have more dedicated and less transient investors.
In December, the IIRC published its Integrated Reporting Framework, which combines sustainability and financial data to provide a holistic view of the company and its ability to sustain value over the short, medium and long term.
The IR Framework has won praise from the accounting world, which says it will help companies to better explain how they create and sustain corporate value.
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