3. “To make our economy sustainable we have to relearn
everything we have learnt from the past.
That means making more from less and ensuring that
governance, strategy and sustainability are inseparable.
Integrated Reporting builds on the practice of Financial
Reporting, and Environmental, Social and Governance-
or ESG/Sustainability – Reporting, and equips companies
to strategically manage their operations, brand and
reputation to stakeholders and be better prepared to
manage any risk that may compromise the long-term
sustainability of the business”
Professor Mervyn King, Chairman of the GRI
4. An integrated report ….
The core concepts revolve
around an “inclusive”
approach and “integrated”
reporting to provide a
holistic and forward looking
picture of the reporting
organisation to the
multitude of stakeholders
who are impacted by and
who in turn impact the
reporting organisation.
5. Key considerations:
• Integrated reporting….
– Is the evolution of sustainability reporting from a
“nice to have” to a “need to have” basis
– Is communicating the business strategy and
processes which exist or are to be implemented to
manage both financial and sustainability issues
– Is a journey and progressively needs to cover the
multiple needs of the different user types
– Requires the development of a framework to
ensure all reporting requirements are being met.
Source: KPMG – Integrated Reporting – Understanding the requirements - 2011
6. Reporting Progress
Sustainability Report
Integrated Report
Annual Report
• Financial • Lots of issues • Core elements
Results • Lots of that
• Compliance stakeholders contribute to
Statutory • Stakeholder core value
Information based creation
• Shareholders • Most material
based to value
creation for
stakeholders
• Stakeholder
based
Source: Next Generation Consultants – www.nextgeneration.co.za
7. What this means….
• This change requires not only
new skills and competencies
but also a new mind shift
about fundamentally different
communication strategies
• This new era of Corporate
Reporting focuses on enabling
stakeholders to make
informed assessments as
opposed to companies telling
their (one-sided) story
• It requires integrated strategic
communication strategies that
considers, allows and
encourages stakeholders to
influence business strategy
8. New era of
communications
• Principles of Reporting
– Materiality
– Inclusiveness
– Completeness
– Balance
– Comparability
– Accuracy
– Timeliness
– Clarity
– Reliability
– Transparency
– Accountability
9. Here, There, Everywhere
• Issues management is a traditional role and
responsibility of the public relations function
– Issues management, broadly defined, is the practice of
identifying potential problems and working to deflect or
defuse them in order to minimize their impact on an
organisation or business
• Sustainability deals with these material issues – in
particular – how a company is or plans to deal with it.
• The sustainability and integrated report is the
communication aspect – i.e. ‘telling the story’ to
stakeholders.
• Until now PR focused on specific ‘stakeholder groups’
i.e. investors, shareholders, media, etc.
• So – what is the NEW story about stakeholders?
10. Providing the link
• Additional requirements
of practitioners are – to
take the lead in
stakeholder
engagement, to
document the
engagement process, (i.e.
outcome and
commitment to these
issues raised by
stakeholders), to
contribute to the
reporting process, and
ensure the most material
issues are managed – all
of these provide an
additional layer of
complexity.
11. The era of stakeholder engagement
1980’s – The Awareness Era 1990’s – The Attentive Era 2000’s – The Engagement Era
Environmental Environmental and Social Increasingly complex
environmental, social, economic
environment
Local Global Global
High Impact – High Visibility Less visible industries Multi stakeholder partnerships
Industries
Deteriorating public opinion, Increasing awareness of threats Growing issue linkages,
mistrust of business to resources, complexity across the value
interconnectedness of chain as well as product chain
environmental, social, economic (cradle to grave)
issues
NGO, Activist pressure to Calls for corporate responsibility Growing anti-globalisation
reduce environmental impacts on environment, social issues movement
Negative media Rise of NGO influence powered Increasing influence of global
by electronic communications multi stakeholder organisations
Increasing community tensions Recognition of value creation
from engagement for a
company and its stakeholders
Consumer boycotts
Difficulties, delays in
permissions
Threats to licence to operate
12. Stakeholder Groups by Relationship
Business Government Civil Society
• Deepening and adding • Moving beyond a • Moving beyond
value to traditional or compliance framework confrontation to
long-standing into a variety of dialogue and cooperative
relationships participatory and partnership models
• Managers, employees models, including new • Local community
and labour unions forms of public-private stakeholders
• Shareholders, investors, partnerships and multi- • NGO’s
financiers, reinsurers stakeholder policy
• Research institutions,
dialogue aimed at
• Customers, clients, academics, media
securing a policy
consumers • Global community
framework that is
• Suppliers, contractors supportive of responsible stakeholders
• Industry and trade competitiveness • Vulnerable/voiceless/
associations • Industry based / indigenous/future groups
• Competitors regulatory bodies –
mining, telecoms, finance
13. Increasing sophistication in
approaches to engagement
Communications via one-way channels designed to
spread information
• TRUST US
Consultation and dialogue via interactive channels
• SHOW US
Partnerships that create value and are focused on
finding solutions
• INVOLVE US, HEAR US
14. Case Studies
• Engagement and dialogue is more about listening
– Shell – Fracking in the Karoo
• Expect to take time to learn a new vocabulary – even if you are using the same
words, they have a different meaning
– BHBP – Environmental/Emissions/Pollution vs. Health Issues
• Accept that there might not be agreement on all issues
– BP – Don’t expect to set the agenda
• Be aware of perceptions that may not align with internal thinking – some you
may be able to change, whilst some you might have to learn to live with
– Mines – people have short and/or long memories – relocation, wages, hostels, asbestos,
water, nationalisation
• You may need independent, external, specialist skills to facilitate the process
– Walmart – local knowledge, skill and cultural insight
• The rules of engagement need to be agreed
• Comment and commitment needs to filter through the organisation
• It takes time and resources and it raises expectations
• Stakeholders are not homogenous groups
• Getting the right stakeholders to the table is neither simple nor easy
• It requires reviewing internal priorities, processes and systems
15. Lessons Learnt (1)
• Unlearn PR & Embrace the Specific
• Be afraid – be very afraid – if you see
phrases like
– “industry leading,” “best in class,” and
“visionary”
– “We’ve been the most responsible (insert
industry) company since (insert name of
scion) /(launched this great company in)
[insert date]. And this year we’ve done
some fantastic things to improve our
performance. Not that we’re suggesting
that in previous years our performance
needed improving, because we were
already great … ”.
16. Lessons Learnt (2)
• Learn to say ‘’Sorry – we
made a mistake”
• Practice starting sentences
with “Unfortunately, …” and
“We didn’t reach our goal
this year because … ”.
• Use language along the lines
of “Despite these
accomplishments, we know
we have a long way to go.”
17. Lessons Learnt (3)
• Is it real or aspirational?
• When you talk about future performance,
be it a specific goal or (dangerously) an
implied goal, be very clear about what’s
aspirational and what’s a hard goal for
which you’re willing to be held
accountable.
• It doesn’t hurt to qualify this by laying out
the potential factors that might make the
goal difficult to achieve. Sweeping
predictions may bite you where it hurts.
18. Lessons Learnt (4)
• It matters – all of it!
– You have an important job. More
than any other document, your
Sustainability / Integrated Report has
the potential to earn at least the
grudging respect of your critics.
– At the end of the day, sustainable
business practices and transparent
communications represent
opportunity more than risk.
19. Thank You
Questions
Please note:
This presentation is part of a larger body of research and knowledge.
For more information:
www.nextgeneration.co.za
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