Integrated reporting is an approach seeking to bring together political, social, financial, governance and environmental information in a comprehensive, authoritative and single reporting format. Therefore, IR discloses and connects social, economic and governance inputs and performance information leading to improved performance of the company’s social responsibilities and helping demonstrate how a company establishes social value over time. Various important outcomes are attributed to integrated reporting which include satisfaction of stakeholders’ information needs and driving organizational change towards better sustainable results. Consequently, integrated reporting social, political and governance things reduce reputational risk and allow companies in making better financial and non-financial decisions as well as helping in breaking down operational and reporting silos in organizations together with improving systems and processes (Amran et al., 2014). Besides, integrated reporting is known to be a long-term process although it provides a pathway toward adapting to modern fiscal and political realities for all national economies and enterprises.
How Companies Use IR
Integrated reporting adds value to companies by highlighting how green and ethical values enhances long-term growth. Nowadays many investors require non-financial data while screening a company. Therefore, various companies such as BP, ACCA, and Coca Cola are using integrated reporting. First, the Coca Cola company in providing investors and other interested parties with full information about the company. The reporting provides an opportunity of demonstrating not only the financial indicators but the basis of the company’s comprehensive analysis in justifying why it shall be successful in the future (Alexander, 2015). The Coca Cola integrated report helps one to fully demonstrate the company’s social responsibility and the commitment to sustainable development. For instance, there is a whole section of Community Trust in the Coca-Cola integrated reporting which is dedicated to sustainable development initiatives.
BP is the other company using integrated reporting as a framework for tracking and writing their social, environmental and economic performance. The BP standardized approach ensures greater accountability and transparency together with benchmarking against previous year’s or peer companies’ presentation. Through bringing together industry expertise with stakeholder input, the plan helps in ensuring that BP recognizes matters which are likely to be relevant to gas and oil companies and responding to issues by materiality reporting or process. BP guidance involves indicators and reporting elements in helping companies write against their physical matters.
Moreover, ACCA uses integrated reporting in identifying the benefits and the progress made as well as providing practical insights for development and improvement. From the ACCA’s integrated reporting there is remarkable progress in the quality of reports produced over the years. Nevertheless, there are challenges faced by organizations like linking of strategy and performance, description of the board’s role or organizations outlook as well as materiality application (Amran, Lee & Devi, 2014). According to ACCA solving such challenges requires preparers to think above reporting practice concerning organization management together with embedding integrating thinking into internal decision-making processes. Therefore, implementation of integrated thinking throughout an organization unlocks more benefits and gives some questions which organizations have to consider to benefit from integrated reporting fully.
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