Given its focus on future orientation and ensuring a clear understanding of an organisation’s value creation story, all stakeholders benefit from integrated reporting. Through enhanced corporate reporting, investors, along with other stakeholders, are provided with greater insight into risks, opportunities and a company’s long term and sustainable value creation potential. Integrated reports can enhance investors’ understanding of a company’s value creation process, its resource and relationship dependencies, and the outcomes on the six capitals which can, in turn, effect the company. Investors should assess the quality of the integrated reports of their investee companies.
Code for Responsible Investing in South Africa (CRISA)
South Africa’s Second Code for Responsible Investing in South Africa, 2022 (CRISA 2) was released in September 2022. It builds on the first CRISA Code (2011) and contains five voluntary principles for stewardship and responsible investment as a key component of the South African governance framework.
The principles of CRISA 2 are of universal relevance, capable of flexible application on a proportionate basis as the context may require, by asset owners, asset managers and service provider organisations who voluntarily align themselves with the principles. CRISA 2 applies to asset owners, asset managers and service providers. Other organisations within the investment value chain or who may be involved in investment arrangements and activities, are similarly encouraged to apply the principles of CRISA 2.
The CRISA Codes recommend integrated reporting.
- To download CRISA 2 – Click here
- To download CRISA 2 at a glance – Click here
- To download a CRISA 2 FAQ – Click here
- To visit the CRISA 2 website: https://www.crisa2.co.za
- To access CRISA 1 – Click here
Principles for responsible investment
The United Nations-supported Principles for Responsible Investment (PRI) is the world’s leading initiative on responsible investment. PRI has 1500 signatories globally with approximately ZAR 900trn (USD$60tn) in assets under management. Read A Blueprint for Responsible Investment or visit their website at www.unpri.org to access their investor tools and their response to ESG issues.
International Corporate Governance Network
The ICGN Global Governance Principles describe the responsibilities of boards of directors and investors and offers practical guidance to improve dialogue between the two parties. Access the report and other ICGN guidance notes at www.icgn.org.
IIRC’s Creating Value: Integrated Reporting <IR> and Investor Benefits
Integrated reports support the investment community in better understanding an organisation’s value creation story and, to some extent, also serve to fill information gaps. The IIRC’s publication shows the link between corporate behaviour and reporting and investment decisions. You can download the publication here.
IIRC’s Investor Statement
Across the globe, investors have confirmed that their investment processes require information on business models, strategy and the resources on which these rely. In 2017, leading investors confirmed their support of Integrated Reporting, via the Investor Statement, as a way to better understand an organization’s performance.
Value creation lessons
BCG article titled: “Ten Lessons from 20 Years of Value Creation Insights”: https://www.bcg.com/en-za/publications/2018/value-creation-insights-ten-lessons-20-years.aspx
Deloitte Annual Reporting Insights 2017
Deloitte’s 2017 FTSE survey looks at the corporate reports of 100 listed UK companies, to provide a perspective on FTSE reporting practices and what investors are finding useful including the strategic report, governance information and outlook and financial statements. You can download the complete report (PDF) here.
The IFA: The Board of Directors and Integrated Reporting
The French Institute of Directors (IFA) sees integrated thinking and integrated reporting as an inherent part of a director’s role in defining an organization’s value creation strategy which can be understood by its investors and shareholders. In 2017, the IFA issued recommendations to its members on the involvement of directors in this approach. You can access the full report here.
PWC’s It’s Not Just About the Financials
PWC’s 2016 report includes interviews with investment professionals and how they use environmental, social and governance information, how well they think companies do in communicating on these matters and where the gaps are in reporting. The report presents the case for investment decisions based on insight into value creation and can be accessed here.