Read the full story from the Harvard Law School Forum on Corporate Governance and Financial Regulation.
Sustainability reporting for large public companies around the world has become the norm. Si2’s research this year (2018) found that 78 percent of the S&P 500 issued a sustainability report for the most recent reporting period, most with environmental and social performance metrics. The rate of sustainability reporting for the world’s largest companies is even higher, with some figures noting as high as 93 percent.  This is a starkly different picture from the 1980s, when a handful of companies in vulnerable sectors—extractives and chemicals, which had to respond to public backlash against environmental mishaps—were the only ones to publish environmental reports with limited performance metrics. It was not until the 1990s that sustainability reports as we know them today started gaining traction, after the concept of “triple bottom line”—environmental, social and economic—corporate performance was introduced and became popular.
Integrated reporting reflects a critical point in the evolution of financial accounting practice. Its core purpose is to ensure that organizations provide a more accurate account of their creation or destruction of value among the different forms of capital. It achieves this by shifting the focus away from the traditional exclusivity of financial measurement.
— Dr. Robert Massie (Co-founder), GRI
Now, almost three decades later, the landscape is again ripe for a shift. This time, the new concept is “value creation,” that companies should create shared value for all—including investors, employees, suppliers, communities and the environment. Proponents say that companies should disclose how they integrate the triple bottom line impacts through a more holistic report of its inputs and outputs, through what’s called an integrated report. Integrated reports would elevate the status of material sustainability matters to be commensurate with financial ones, and help investors make more informed decisions.