Global Compact International Yearbook 2013
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for combing financial core elements with environmental and
social information, as well as aspects of corporate governance,
in a distinct, precise, consistent, and comparable format.
The Council is composed of representatives from the most
relevant organizations that have shaped financial reporting
in the past and who come from the sciences, for example:
companies such as EnBW, auditing firms, and organization
such as IASB, IOSCO, and the World Bank, as well as leading
organizations in the field of sustainability, such as the Global
Reporting Initiative. As one of the leading actors in developing
corporate reporting, the European Union is also being closely
followed with great interest concerning current developments
in integrated reporting.
What is integrated reporting?
The IIRC Consultation Draft, presented in April 2013, is a
principle-based and not a rule-regulated approach. From a con-
tinental European point of view, this constitutes a less precise
approach while containing fewer mandatory requirements.
At the heart of the Consultation Draft is the value concept as
well as the concept of materiality, which has a great effect
on the process of integrated thinking within the company
and the assessment and the comprehensibility of connecting
financial and non-financial KPIs. The Consultation Frame-
work defines integrated reporting as a process that results in
communication by an organization, most visibly a periodic
integrated report about value creation over time. The most
visible result of integrated reporting is the integrated report,
which, according to the suggested framework, is described as:
“
a concise communication about how an organization’s strategy,
governance, performance and prospects, in the context of its
external environment, lead to the creation of value over the
short, medium and long term.”
Four main elements of integrated reporting can be highlighted:
1
| The concept of integrated reporting, with its guiding princi-
ples and content elements, represents not only an evolution
but also a revolution in corporate reporting that increase
the quality and the information value of corporate report-
ing according to the motto “Less is more.”
2
| The concepts of integrated thinking and integrated report-
ing are supposed to reflect the management capability to
monitor and to manage the complexity of the corporate
value creation process. Following this logic, the actual
integrated report is at the end of the process chain.
3
| Integrated reporting is a holistic approach that connects
classical financial reporting with non-financial information
(
such as sustainability issues, risk management, and corpo-
rate governance aspects). It merges all material information
about strategy, corporate governance, and performances, and
thereby mirrors economic, ecological, and social contexts
within which a company is operating.
4
| The concept of integrated reporting is not only a commu-
nication instrument in terms of report optimization, but
also a steering tool that is used to measure financial and
non-financial objectives through a corporate performance
system with KPIs and target values.
It is the declared objective to communicate the internal manage-
ment view externally, thereby enabling external observers to
have a better and more comprehensive picture of the company.
To test the practicality of the concept, the IIRC started a pilot
program for companies and investors in 2011. Since then,
about 100 international companies have been engaged in
this pilot program, which has the goal to further develop
the framework by adding practical advice from companies
and investors – one of the main goals of the IIRC. In April
2013
the IIRC Draft Consultation Framework was launched.
Pilot participants as well as all interested parties have the
possibility until July 15, 2013, to comment on the framework
and thereby simultaneously participate in the realignment of
corporate reporting. In December 2013 the first version of the
IIRC framework will be released.
EnBW’s path to integrated reporting
In 2011 EnBW embarked on a journey to integrated reporting.
The direction of this journey is already known, but the path it
takes, together with its internal and external stakeholders, has
yet to be determined. In order to do justice to future markets as
well as political and social demands, EnBWhas put a clear focus
on its strategic targets. Long-term and responsible thinking and
action, including economic, ecological, and social aspects, are