An Emerging Trend: Combining Financial and CSR Reports The One Report

In a recent story from Harvard Business School (HBS), Reinventing the Annual Report, Robert G. Ecces coins the term, “One Report,” which combines the financial and CSR/sustainability reports into one document that “provides the essential information on a company’s financial, environmental, social and governance performance and shows the relationships between them.” Understanding GRI reporting concepts, such as the materiality principle and indicator selection, will be helpful to anyone tasked with overseeing an integrated annual report.

Ecces, a professor at HBS and co-author of One Report: Integrated Reporting for a Sustainable Strategy, argues that an integrated report provides companies many benefits, including:

  • Demonstrates their commitment to sustainability;
  • Helps them make better decisions on a broader range of information;
  • Engages them more deeply and effectively with shareholders and other stakeholders; and
  • Lowers reputational risk through a higher level of transparency.

As 3P reported in August, the International Integrated Reporting Committee (IIRC), in partnership with GRI, is working to create a globally accepted framework for bringing together financial, social, environmental and governance information. In an interview with BusinessGreen.com, Paul Druckman, chairman of the Prince of Wales Accounting for Sustainability initiative and a key player in IIRC, stressed, “The economic crash, the BP oil spill and these other issues have only made people more aware that integrated reporting has to be explored very carefully, and that what we have at the moment is not sufficient,” he said. “Our aim is to make sure financial and non-financial reporting are brought together and see where that leads – it could lead to a dramatic change in annual reporting.”

Philips, the Dutch electronics and health-care company is one example of a major corporation integrating sustainability into its annual report. I couldn’t figure out from the Web site if they are using the GRI framework or not, but I found the information they presented on such issues as environmental footprint and supplier sustainability easy to read and digest. In the performance highlight section, sales of green products and operational carbon footprint are side-by-side with the financial tables. I liked that rather than slog through a 50+ page report, the report distilled key issues into metrics of interest to investors.

Other companies using the combined format include Southwest Airlines, whose report does include a GRI Content Index, United Technologies Corporation (UTC) and Novo Nordisk.

In contrast, after reviewing ConAgra’s recent GRI sustainability report, which I really liked, I checked out its annual report to see how sustainability was integrated. And couldn’t find any mention of any sustainability metrics. I’ve contacted ConAgra to better understand its decision to keep the two reports completely separate.

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Deborah Fleischer is President of Green Impact, a strategic environmental consulting practice that helps companies engage stakeholders and bring their successes to life through words. Check out our new green team tool, Corp Green.

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