PwC Commentary
PwC Commentary: The advance of an integrated reporting model
The business drivers for long term success are understood to be increasingly non financial. Current methods of corporate reporting have led many stakeholders to question the relevance and reliability of annual financial reports as a basis for making economic decisions. Sustainability and climate change reports have suffered similar weaknesses, usually appearing disconnected from the organization's financial reports. A more integrated approach is needed.
The CDP initiative is advancing the consideration of climate change in the business and financial context. The 2011 Iberian 125 responses to the CDP Investor questionnaire show that organizations are incorporating climate change into their business strategies. Corporations are acknowledging the opportunities presented by a low carbon and sustainable growth environment and are reporting on the actions and decisions being made to realize them. As well as strategy CDP also asks companies to report on the integration of climate change into corporate risk management, opportunity development, remuneration, KPIs and internal and external reporting.
As the construct of a company´s value shifts towards the intangible the business community is disclosing significantly more non-financial information that underpins how value is and will be created. Examples include low carbon products and services, motivation of employees and engagement with suppliers and other stakeholders.
This shift in thinking is occurring at a time when global reporting frameworks continue to place heavy emphasis on financial disclosure and performance. While financial systems were not designed to capture all of the non-financial inputs needed to reflect the contribution of business to society, there is a growing realization that a more progressive reporting model is needed. A few leading companies are beginning to challenge established boundaries of how performance is measured and reported. Together with major corporate reporting associations these companies have also begun developing a framework for the future integrated report.
Leading corporations are rethinking their business and reporting models, how they manage and drive sustainable, profitable growth and how they measure critical non-financial information. These new reporting models connect areas of corporate information; consider all risks whether economic, social or environmental; have an increased focus on the future and business strategy; consider the short, medium and long-term; respond to stakeholder interests; and consider the wider value chain. In turn, this shift in mindset appears to help corporations envision the future and build competitive advantage.
An important element in the new reporting model will be climate change. Reducing emissions can lead to innovation, identification of cost savings and development of commercial opportunity. Responding to CDP is a key step towards more mature corporate reporting and the consideration of climate change in the business context that is now the expectation of the capital markets.
María Luz Castilla Director of Sustainability and Climate Change, PwC Spain
9
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50