Are integrated reports the key to a bigger picture?

Investors are catching on to the big risks climate change poses to their investments.?

That is why they're pushing for better sustainability reporting with clear, consistent and comparable information on the issues companies face.?

Numbers don’t lie and investors are after both qualitative and quantitative metrics that can be tracked over time and compared across different businesses.

Good Environmental, Social and Governance (ESG) reporting helps them spot and avoid companies with potential financial risks due to poor ESG practices, and highlights those managing these factors well.?

Here’s a snapshot of what investors are thinking

According to PwC's 2024 sustainability report, investor trust in corporate sustainability claims is on shaky ground.?

The data shows us that 94% of investors think corporate reports have some level of unsupported sustainability claims, AKA greenwashing.This scepticism pushes 85% of investors to regularly check in with companies, especially when ESG issues pop up.?

Plus, 85% of investors believe that getting reasonable assurance—akin to financial audits—would make them feel a whole lot better about sustainability reporting.

With new regulations looming, 57% of investors think meeting these standards will mostly cover their information needs for making decisions.?

Approximately 42% of investors have ditched companies that aren't stepping up on ESG, and 50% have fought to include ESG targets in executive pay or have submitted shareholder resolutions on ESG.

With an obvious deficit in trust, what's the solution??

Integrated reporting is stepping in as the hero companies need. Given the eye-opening stats, it’s crystal clear that investors are craving more transparency and accountability from companies on ESG.?

Integrated reporting is the bridge to close this gap, offering the comprehensive insights investors demand.

As ESG? matters gain the same scrutiny as financial and technical performance, regular and consistent reporting is becoming essential to attract and maintain investor and lender confidence. To achieve this, it's important for all employees and operational leaders to ensure that ESG-related performance data is consistently collected and validated for sustainability reporting.

Integrated reporting takes a holistic approach to sustainability, extending beyond just financial data to include a company’s environmental, social and governance aspects.?

It isn’t reliant on an organisation’s ‘word’ -? the proof is in the numbers?

• Comprehensive: Integrated reports offer stakeholders a 360-degree view of a company’s sustainability performance. Think of it as a bird’s eye view of reporting.
• Connected: These reports highlight the connections between financial performance and ESG factors, demonstrating how sustainability efforts can impact a company’s bottom line. This approach is different from standalone sustainability reports, which typically do not include financial data.
• Stakeholder engagement: Integrated reports emphasise the importance of engaging with stakeholders and responding to their concerns, fostering transparency and trust.

It’s different from annual reporting and sustainability reporting

Sustainability reporting, also known as CSR or ESG reporting, focuses specifically on a company’s environmental, social and governance practices. These reports detail the company’s sustainability goals, initiatives, and progress but usually do not include financial data.

Annual reporting is primarily focused on financial performance, including revenue, profits, and other key financial metrics. The main emphasis remains on financial results and compliance with regulatory requirements.

In essence, while sustainability and annual reports focus on specific aspects, integrated reports combine both to provide a holistic view of a company’s overall performance and strategy.

The evolving approach of forward-thinking organisations?

With the push for mandatory sustainability reporting gaining steam both locally and globally, companies need to get their act together and adapt to what investors and regulators expect.?

Messing this up can lead to some pretty serious consequences like damaged reputations and legal troubles. But here's the upside—getting on board with reporting isn't just about ticking boxes for regulations. It's about building trust with your stakeholders and setting your business up to thrive in an ever-changing world.

Investors are taking action based on a more holistic view

In this fast-paced environment, being proactive with your sustainability efforts is imperative for long-term success and staying competitive.

At Brand Foundry, we are ready to help you navigate this decision and embark on your sustainability reporting journey. Sustainability reporting and integrated reporting has reached a tipping point, driven by increasing investor demands and regulatory requirements.

Embrace this opportunity to enhance transparency, accountability and sustainability through integrated reporting. Get in touch with our team.