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Integrated reporting
social risks materially affect financial
performance. Equally, it identifies
opportunities for reducing cost through
As a global, research-based pharmaceutical firm, AstraZeneca operates in a rapidly
resource efficiency and for driving profit. It
changing environment. And it has embraced integrated reporting at its core
allows the financial audience to make more
informed decisions and valuations on AstraZeneca has a clear strategy for manag- or concern stakeholders; the processes it
robust data resulting from an approach that ing the risks and driving business success has in place for identifying and managing
includes a strategic direction, an within this dynamic landscape, and for these issues, and its performance against
operational management system, reporting delivering that business success responsibly. key indicators. This includes areas such as
and independent third party assurance. “Corporate responsibility is embedded patient safety, access to medicines, sales
“It is increasingly understood that into AstraZeneca’s business strategy and marketing practices, research ethics,
financial statements capture less than 20% because it is core to our long-term suc- employment practices and environment.
of corporate risks and value-creation cess,” says CEO, David Brennan. In 2009, AstraZeneca developed a com-
potential, with the balance deriving from “Our reputation and licence to do business bined Compliance and Corporate
intangible factors such as human capital depend on it. One of our top priorities is to Responsibility “Responsible Business”
and resource efficiency,” says Matt make sure that CR considerations continue scorecard with defined objectives and
Christensen, executive director at the to be integrated into our everyday business accountabilities, to track performance
European Sustainable Investment Forum. thinking, at all levels, worldwide.” across all aspects of the business and
“The CSR function helps to explain Between 2000 and 2006, AstraZeneca enable quarterly reporting to its senior
these intangibles – environmental, social published an annual printed CR Summary executive team (SET) and Audit Committee,
and governance data is relevant, material Report, distributed to shareholders with its as well as annual reporting to the board
information that investors should have and Annual Report & Accounts (ARA). In 2007, it and SET. Key measures used are tracked
increasingly want as a means to better included CR reporting in the ARA, reflecting through to external annual reporting.
gauge longer-term risks.” the integration of CR-related issues into busi- AstraZeneca takes an integrated
ness strategy and risk management frame- approach to assurance and Bureau Veritas
Real integration works, and providing shareholders with a UK Ltd has provided external assurance on
What defines effective integration? What more holistic view of the non-financial as well CR related information within the annual
level of sustainability reporting is needed as the financial aspects of the business. report and accounts, and of the content of
within an FRA to be able to genuinely Information is provided throughout the the ‘responsibility’ section of AstraZeneca’s
claim the delivery of a truly integrated ARA about the company’s position on the corporate website,
report? Organisations have historically issues that relate to its business that affect
included references to sustainable
performance, though often as a stand alone
section within an FRA. A meaningful believes the majority of its stakeholders stand alone publication. There are a wide
integrated report will show how principles seek visibility of, over and above financial range of communication tools that can
of sustainability permeate throughout the performance. These include safety of enhance reporting, allowing stakeholders to
company and add value to business medicines, research ethics, access to focus on areas of specific interest. More
performance – from corporate governance medicines, animal research, climate change detailed reports that include historic and
through to strategic board decisions, staff and pharmaceuticals in the environment. current performance data, combined with
engagement, supply chain management and All of these issues have significance to the agreed targets, can be made available via
resource management. Key individuals in way the business is operated and performs. websites, allowing stakeholders to monitor
the reporting process should reinforce the Companies must identify areas that performance, trends and issues.
corporate commitment. A chairman are most relevant to their strategy and Sustainability reporting is currently not
including a statement and the CEO adding business activities. closely aligned with the detailed
support enhances the credibility and adds Sustainability reporting contains a requirements of highly regulated financial
gravitas to the report. The sustainability greater depth of detail than financial reporting systems. It will take a number of
theme should flow throughout the report reporting. With the strict format of annual years for companies to identify and
referring to the challenges, risks, reports the requirement for succinct implement management processes to
opportunities and objectives that the reporting may not satisfy stakeholders who produce defined and measurable data that
company has identified. want more detail. Decisions have to be can be made available in line with key
made in terms of the sufficiency of material financial reporting periods.
Challenges content that communicates key messages The challenges are clear but the benefits
Integrated reporting is still the exception without losing substance and credibility. of integrated reporting, providing clear
rather than the rule. Early adopters have The Global Reporting Initiative’s (GRI) links between financial performance and
had to overcome a number of challenges. sustainability reporting framework was sound corporate stewardship, are too
The key challenge has been knowing how developed following consultation with valuable to ignore. Sustainable companies
to satisfy different stakeholder representatives from business, civil society, today must account for their performance
expectations. Stakeholders today demand labour and professional institutions. It has in both financial and ethical terms.
insight over and above traditional enabled organisations implementing it to
corporate responsibility themes. As a deliver the highest degree of technical Tracy Oates is practice manager for
leading global pharmaceutical company, quality, credibility and relevance. corporate responsibility services at
AstraZeneca has identified the fields that it The integrated report need not be a Bureau Veritas UK
14 October 2009 ❘ SB Future Proof
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