Integrated reporting and integrated thinking within companies
To break down boundaries you have to connect. Or better yet, to integrate.
The success of an organization requires considering the legitimate interests and expectations of a wide range of stakeholders, and responding to changing expectations, opportunities, and threats that influence a company’s future viability.
To do this it is important to have a greater interaction and a breakdown of those barriers separating internal departments, making them work together, with a common vision. It becomes important not only to tell your stories externally, but also how this happens. The best way to do this is by integrating, understood as “to complete, adding what is useful for a greater validity, efficiency and functionality”.
An integrated report provides an overview of a company’s value creation process, reporting current and outlook financial and non-financial information and highlighting the connections between the environment in which it carries on its business, strategy and corporate governance structure. Investors are increasingly looking for a more complete picture, enabling them to understand what the business is trying to do and why it should be backed in the future.
What emerged from the survey “The responsible saver” 40% of respondents believes that environmental, social and governance issues are very important in the financial sector, a steady increase compared to 23% in 2013. In addition, 92% consider it important to encourage responsible investments and 44% want information from the bank or consultant about the sustainability of their investments.
According to the International Integrated Reporting Council (IIRC), "Integrated reporting brings together material information about an organization's strategy, governance, performance and prospects in a way that reflects the commercial, social and environmental context within which it operates. It provides a clear and concise representation of how an organization demonstrates stewardship and how it sustains value."
Integrated thinking requires a clear vision of what drives value in the organization and for this vision to be constantly held throughout the organization. It involves boards of directors, senior management, and other employees proactively considering a broad range of “capitals” beyond just financial and manufactured capital.
The level of integration depends on connecting people, functions, information and systems. For this reason in 2016 Generali established the Integrated Lab, consisting of Group functions – Group Integrated Reporting & CFO Hub, Shareholder and Governance, Group Reward Group and Group Social Responsibility – which met periodically to plan their reports so that they could be linked together and represent different views of a single strategy.
This vision is summed up in the words of Lucia Silva, Generali Group Head of Sustainability and Social Responsibility: “We want to inspire trust in our brand. In this journey, customers, shareholders, employees, distributors, suppliers and all other stakeholders play a key role. Integrated reporting, and most importantly integrated thinking, allows us to run our business sustainably, providing our stakeholders with a clear vision of what drives value in Generali and keeping a long term focus.”
“The complexity of the issues that we are facing has led us to working with an increasingly integrated and cross-cutting approach across different functional areas and business units” – adds Massimo Romano, Head of Group Integrated Reporting of Generali – “allowing us to gain a broader view and to enhance a wide variety of skills and approaches, which represent a vital asset for the Group. This approach has increased the interaction between departments, improving internal information flows and moving beyond the so-called silo approach.”