Integrated Reporting is an approach to corporate reporting that demonstrates the linkages between an organization’s strategy, governance and financial performance and the social, environmental and economic context within which it operates. It’s still on the rise as companies try to demonstrate their focus to sustainability and corporate responsibility.
And while there is no real globally accepted framework for integrated reporting (even though there is the International Framework) that is designed to accelerate the adoption of across the world), it’s coming as more and more investors and stakeholders demand it — and more and more countries demand it from public companies.
But if a company cannot create a 360-degree supplier scorecard, linked to all activities and relevant intelligence on the supplier and its activities, can it really produce an accurate integrated report? After all, can a company really say it’s sourcing ethically just because its suppliers all fill out a survey saying they accept the company’s ethical sourcing guidelines? Can it say it’s using sustainable packaging if only it is using sustainable packaging (that is reusable or recycled) while all its suppliers get their raw materials and components in unsustainably produced (non reusable, non-recycled packaging)? Can it say its meeting its carbon production goals if it is unable to truly capture the carbon produced by its supplier and how it should be allocated across the goods it consumes?
The answer is no.
Nor can it truly report on the (financial) risk in its supply chain if it doesn’t understand its supplier’s (financial) risk and how it impacts its supply chain. The biggest risks … that lead to the biggest disruptions … start deep … sometimes all the way back at the mines or the farms half a world away. And they have ripple effects … getting bigger and bigger as they progress up the chain.
So if you want to claim accurate integrated reports, first make sure you can crate accurate, intelligence enriched, 360-degree scorecards … for your entire supply base.