As global firms increasingly integrate financial and environmental reporting, paints and coatings company AkzoNobel is taking integrated reporting to the next level and measuring the four dimensions of capital: financial, natural, social and human.
AkzoNobel says it will scale up a fourth-dimensional impact assessment approach following a successful pilot.
Some are calling it the future of integrated reporting.
Pavan Sukhdev, CEO of sustainability consultancy GIST Advisory says the pilot “showcases the future of impact valuation and integrated reporting.”
And Adrian de Groot Ruiz, True Price executive director at True Price, a sustainability research organization that confirmed the 4D approach to be the first of its kind to be published, calls it “the future of integrated thinking and reporting.”
The so-called 4D method looks at the whole value chain and is designed to measure both positive and negative environmental, human, social and financial impact. It has been piloted at AkzoNobel’s Pulp and Performance Chemicals business and five other sites in Brazil. The pilot took place during 2014.
The pilot follows two studies released last September that show integrated reporting’s positive impacts on business engagement with external stakeholders, strategic benefits including better decision-making, and the importance of integrated reporting in helping to meet the needs of investors.
AkzoNobel says the findings of its pilot 4D program — analyzed in cooperation with True Price and Sukhdev — are already being used to make relevant improvements across the company’s entire value chain.
“By attaching an economic value to the positive and negative aspects of each dimension, we can gain valuable insights into how we can drive longer term value not only for our shareholders, but also for the environment, people and society at large,” said AkzoNobel CEO Ton Büchner. “In addition, the results will inform our strategic decision-making … for our ongoing efforts to do more with less.”
Takeaway: As companies and investors increasingly consider the impact of financial, natural, social and human capital on business operations, AkzoNobel’s new 4D approach may be the future of corporate reporting.