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 Fin. S

tatements

Ann

ual a

nd In

tegr

ated

R

epor

t

Fin. Statem

ents

EmbeddingW

ebsi

te

MI

Integrated Reporting

InvestorsIntegrated

Report

Online

Sust

aina

bili

ty

Oth

er k

ey

stak

ehol

der

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