Question

Provide a well detailed answer !!

Do you think that companies should provide an integrated reporting rather than CSR reporting?

Answer 1

Integrated reporting (IR) is a framework for corporate reporting, in which corporate financial and sustainability information are integrated into one report. An integrated report includes material information about a company’s strategy, governance and performance.it helps to better understand how businesses are addressing their current and future challenges and how they employ their resources and relationships to create value in the longer term. It helps the companies themselves and other stakeholders, for example investors, to make improved assessments and decisions.”

Integrated reporting will also stimulate further third-party verification of non-financial data and will drive sustainability as an integral part of the discussion with companies, for example at Annual General Meetings.

integrated report aims to provide an insight into the company’s resources and relationships that are known as the capitals and how the company interacts with the external environment and the capitals to create value. These capitals can be financial, manufactured, intellectual, human, social and relationship, and natural capital, but companies need not adopt these classifications. The purpose of this framework is to establish principles and content that governs the report, and to explain the fundamental concepts that underpin them. The report should be concise, reliable and complete, including all material matters, both positive and negative in a balanced way and without material error.

The primary purpose of an integrated report is to explain to providers of financial capital how an organization creates value over time. An integrated report benefits all stakeholders interested in an organization’s ability to create value over time, including employees, customers, suppliers, business partners, local communities, legislators, regulators and policy-makers. The International Framework (the Framework) takes a principles-based approach. The intent is to strike an appropriate balance between flexibility and prescription that recognizes the wide variation in individual circumstances of different organizations while enabling a sufficient degree of comparability across organizations to meet relevant information needs. It does not prescribe specific key performance indicators, measurement methods, or the disclosure of individual matters, but does include a small number of requirements that are to be applied before an integrated report can be said to be in accordance with the Framework. An integrated report may be prepared in response to existing compliance requirements, and may be either a standalone report or be included as a distinguishable, prominent and accessible part of another report or communication. It should include, transitionally on a comply or explain basis, a statement by those charged with governance accepting responsibility for the report.

Integrated reporting is built around the following key components:

1. Organisational overview and the external environment under which it operates

2. Governance structure and how this supports its ability to create value

3. Business model

4. Risks and opportunities and how they are dealing with them and how they affect the company’s ability to create value

5. Strategy and resource allocation

6. Performance and achievement of strategic objectives for the period and outcomes

7. Outlook and challenges facing the company and their implications

8. The basis of presentation needs to be determined, including what matters are to be included in the integrated report and how the elements are quantified or evaluated.

A CSR, corporate social responsibility or sustainability report is a periodical (usually annual) report published by companies with the goal of sharing their corporate social responsibility actions and results. The report synthesizes and makes public the information organizations decide to communicate regarding their commitments and actions in social and environmental areas. By doing so, organizations let stakeholders (i.e., all parties interested in their activities) aware of how they are integrating the principles of sustainable development into their everyday operations.

The main intention of a CSR or sustainability report is to improve the transparency

A CSR or sustainability report also allows companies to externally communicate with their stakeholders what are their goals regarding sustainable development and CSR. This allows stakeholders such as employees, investors, media, NGOs, among other interested parties, to get to know better what are the short, medium and long-term goals of companies and make more informed decisions. These decisions can spread from investing in a business, buying its products, writing positive (or negative) reviews, among others.

According to the Global Reporting Initiative, a CSR report can be defined as:
“A sustainability report is a report published by a company or organization about the economic, environmental and social impacts caused by its everyday activities. A sustainability report also presents the organization’s values and governance model, and demonstrates the link between its strategy and its commitment to a sustainable global economy.”

CSR and sustainability reports can be used to achieve both internal and/or external goals. Internally speaking, CSR reports are important since they allow companies to estimate the impact of their activities on the environment, on society and on the economy.

Sustainability reporting can help organizations to measure, understand and communicate their economic, environmental, social and governance performance, and then set goals, and manage change more effectively. A sustainability report is the key platform for communicating sustainability performance and impacts – whether positive or negative.

Sustainability reporting can be considered as synonymous with other terms for non-financial reporting; triple bottom line reporting, corporate social responsibility (CSR) reporting, and more. It is also an intrinsic element of integrated reporting; a more recent development that combines the analysis of financial and non-financial performance.

The purpose of  Sustainability reporting provide broad range of with the information how the organisation is creation a sustainable environment with society. IR in the other hand, is aimed at providers of capital, to report on organisationsvalue creation over short, medium. long term by ineracting with their internal and external environment.