Integrated ReportingInvesting in Responsibility Conference November 2012

PwCPwC

Introduction

Jessica Fries

• Integrated Reporting Network Leader, PwC

• Director of the Board and Vice Chair of Working Committee, International Integrated Reporting Council

• Executive Chairman, The Prince’s Accounting for Sustainability Project

Slide 2

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The International Integrated Reporting Council (IIRC)• Financial and sustainability standard setters

(IASB, FASB, GRI …)

• Securities and financial regulators (IOSCO, TSE and other stock exchanges, FSB…)

• Investors (UN PRI, ICGN, asset owners and asset managers)

• Companies (WBCSD, UNGC, BSR, 82 pilot companies and others)

• Intergovernmental organisations (World Bank, UNCTAD)

• Accounting (IFAC, accounting firms, accounting bodies)

• Civil society and academia (A4S, WWF, Transparency International, WRI, Harvard, Uni. Sao Paolo, Uni NSW)

Slide 3

PwC Slide 4PwC

Changing landscape: the next 20 years

Risk & Opportunity

Demographic change

Socioeconomic

structures

Environment Technology

New channels

Career disintegrati

on

Complex supply chains

Outsourcing

Product lifestyles

Offshoring Cost cutting

Global systemic issues

Global business issues

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Shortcomings with today’s reporting model

5

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Fundamental concepts: How the organization creates and sustains value

6

IIRC prototype, October 2012

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Increasing length and complexity

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Number of pieces=40

Big PictureClose-up pictures

(partial connectivity) without big picture

Pieces of information without

connectivity

Number of pieces=40

Number of pieces=40

Importance of the big picture: joining the dotsSame volume, different insight

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Principles and content elements

Building blocks – 2011 Principles – 2012 prototype

• Strategic focus and future orientation

• Connectivity of information

• Responsiveness and stakeholder inclusiveness

• Materiality and conciseness

• Reliability

• Comparability and consistency

9IIRC Discussion Paper, September 2011

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Integrated reporting and the integrated reportAlternative pathways

Slide 10

Annual Report CR Report

Limited inclusion

CR-Chapter

Ann

ual R

epor

t CR

Report

Combination

Primary Report

CR

Com

plia

nce

Integrated ReportIntegration in Annual Report

Integrated Report F

in. Statem

entsA

nnua

l and

Inte

grat

ed

Rep

ort

Fin. S

tatements

EmbeddingW

ebsi

te

MI

Integrated Reporting

Investo

rsIn

tegrated

R

epo

rt

Online

Su

stai

nab

ili

ty

Oth

er k

ey

stak

eho

lder

sN

on-fin. Statem

ents

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Base reporting on strategic themes

What is clear and what is notHeadline findings – PwC FTSE 350 benchmarking 2012

28%Slide 11

Include strategic priorities

95%

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Link market discussion to strategic choices

What is clear and what is notHeadline findings – PwC FTSE 350 benchmarking 2012

21%Slide 12

Discuss future market trends

86%

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Embed sustainability in overall strategy

What is clear and what is notHeadline findings – PwC FTSE 350 benchmarking 2012

20%Slide 13

Include some relevant insight into their sustainability issues

78%

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Clearly explain actual Board / Committee activities in the year

What is clear and what is notHeadline findings – PwC FTSE 350 benchmarking 2012

34%Slide 14

Governance reports mentioning the company's culture and values

49%

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Roadmap to Integrated Reporting

Slide 15

• Discussion Paper responses

• Framework outline

• Prototype

• Examples

• Benefits• Topics

Draft framewor

k

Framework version

1

Pilot Programme (extended into 2014):Companies and Investors

Engagement with regulators and other stakeholders

1H 2012 2H 2012 1H 2013 2H 2013