At this event, we discussed the middle market market segment with guests who shared three sets of examples of integrated thinking:

• Ryan Honeyman of LIFT Economy: B Corp movement which provides a form of integrated reporting and certification slides here
• Shina Culberson of Quist Insights: U.S. valuation firm whose software uses an integrated filter on financials to create a corporate valuation slides here
• Stathis Gould of IFAC: International examples from small and medium sized enterprises (SMEs) slides here

L

earn about Linde plc's approach to integrated reporting following the merger between Praxair, Inc. and Linde AG.  Linde plc is the world’s largest industrial gas company by revenue and market share. It is domiciled in Ireland and listed on the NYSE and the DAX.

Linde plc’s sustainability reporting must be cognizant of requirements and expectations from the EU CSR Directive (Irish Rule), the NYSE and DAX, and a range of the major ESG reporting frameworks including that of Integrated Reporting. Join us to learn about their approach to reporting and how things look in their newly-combined company.

Our Guest:

Riva Krut, Vice President and Chief Sustainable Development Officer at Linde plc

In this program, Indiana CPA Society shared its 2019 Integrated Report, why they began using this type of reporting, and how they developed their capacity to undertake Integrated Reporting over the past few years. You'll also hear how IR has helped them to connect their business model, performance, and strategy, and the difference this approach is making to their organization. You’ll gain insight into how your company can similarly use Integrated Reporting and what it takes to develop a culture of integrated thinking.  A short review of the report is followed by a discussion with program participants.  Here's their latest report.

Our Guest:

Jenny Norris, CPA, CGMA, CAE, is Vice President of Finance for the Indiana Certified Public Accountants Society (INCPAS). She has two decades of experience in financial management and accounting. She earned a B.S. in Accounting from the University of Indianapolis.

A great overview of The Emergence of Integrated Reporting, a paper by the Integrated Reporting Working Group at The Conference Board. Speakers are John Wilcox, Chairman of Morrow Sodali, and Bob Laux, U.S. Lead for the International Integrated Reporting Council.

Thanks to Yafit Cohn, Vice President, Chief Sustainability Officer and Group General Counsel at The Travelers Companies, Inc. for this guided tour of the company's new integrated reporting site!

Here's the intro to our discussion with Intel on how and why they incorporated a presentation using a multi-capital model into their latest 10-K. 

Our guests were Katie Stipic and Erika Kelley from the Intel External Reporting team.

Assurance is a critical support activity that increases confidence in corporate reporting. As companies integrate new types of non-financial information into their annual reports, approaches to assurance will need to adapt. 

Our guests for this program were Kristen Sullivan (Deloitte) and John DeRose (EY) in a discussion moderated by Desiré Carroll (AICPA). They discuss how accounting firms have begun to take on this challenge, what's happening now and the possible future paths for assurance of integrated reports.  A list of supplemental resources is below the video.

AICPA Resources:
For Assurance Practitioners:

• AICPA Statement on Standards for Attestation Engagements 18 (SSAE 18)(Attestation Standards: Clarification and Recodification see AT-C Sections 105, 205 and 210)
• Guide: Attestation Engagements on Sustainability Information (Including Greenhouse Gas Emissions Information)
• Webcast: Sustainability Assurance Engagements (4-hour webcast being held on July 8, 2019 and September 4, 2019)
• Coming soon: Self-study Sustainability Assurance CPE Course (available from July 2019 on this site: https://www.aicpastore.com)
• Sustainability Assurance Brochure to share with clients

For Companies:

• Sustainability Assurance Brochure providing insight into:
• • Assurance service options and features
  • The benefits of assurance services
  • Various other resources can be found here:
• www.aicpa.org/sustainability

Guests Naomi Greer and Andrea Rudert share an overview of The Clorox Company's latest integrated report including an interactive web version and research the company has done on the influence of their report.

As always, this presentation was followed by >40 minutes of questions and discussion among our community.

Part of the discussion was about assurance. Participants shared a number of useful resources: 

 here are the links from the chat discussion about assurance:

• IAASB has a project on assurance on extended external reporting assurance and is one such example of EER: http://www.ifac.org/publications-resources/consultation-paper-extended-external-reporting-assurance ;
• Another paper of interest:  https://www.researchgate.net/publication/313108936_Empirical_evidence_of_the_disclosure_and_assurance_of_Integrated_Reporting_-_A_content_analysis_of_the_IIRC_Examples_Database
• The standards that assurance practitioners are using to assure the non-financial information are the AICPA’s Clarified Attestation Standards found at this link: https://www.aicpa.org/content/dam/aicpa/research/standards/auditattest/downloadabledocuments/ssae-no-18.pdf. The specific sections within this document that are being used are:AT-C 105 Concepts Common to All Attestation Engagements and Either AT-C 205 Examination Engagements (for examination engagements) or AT-C 210 Review Engagements (for review engagements)
• Additional guidance that assurance practitioners are using to help them apply the above standards to non-financial information can be found in this guide: Attestation Engagements on Sustainability Information Guide: https://www.aicpastore.com/AuditAttest/PRDOVR~PC-AAGSUST/PC-AAGSUST.jsp

We are planning future sessions on assurance and the multi-capital model. Please join us!

The surest sign a leading practice will become industry standard is when the industry’s standard-setter adopts the practice for itself. So accountants take note of this tipping point: the American Institute of CPAs (AICPA) launched its first integrated report in 2017.

It wasn’t an easy process, Scott H. Spiegel, the AICPA’s CFO, told the <IR>US Community in its most recent community conversation, on December 12, 2018.

“We haven’t always been comfortable sharing with the outside community,” Spiegel said. So integrated reporting made a lot of people uncomfortable in the AICPA, which has over 431,000 members. Talking publicly about how the organization’s vision and purpose drives its strategic objectives and creates value through its business activities seems simple enough. But it triggers an introspective process that shines a new light on conversations about strategy and performance.

Some issues were easy to talk about, such as the diversity of the board, which the organization is proud of. Other issues, such as enterprise risk, took a leap of faith to put in print. One concern was revealing proprietary information. In addition, publishing the organization’s key performance indicators meant being willing to talk about where it fell short. That’s uncomfortable for any organization

In the end, AICPA leaders saw the positive impact of integrated reporting on their own thinking, so they followed through despite their discomfort. And they’ve committed to continuing with integrated reporting, potentially diving deeper into issues such as natural capital. That the AICPA is committed to its integrated report should tell us all which way the wind is blowing for the industry.

Integrated (adjective)
1. Combining or coordinating separate elements so as to provide a harmonious, interrelated whole.

Jamal Booker began presenting Coca-Cola’s approach to reporting with a disclaimer: “We actually do not do an official integrated report.” He then explained, “But our approach to reporting is very much integrated. Our business is certainly integrated, as well, so the way we report out is actually a report out on our integrated business.” Indeed, in many ways, Coca-Cola’s approach to reporting is more integrated – and more effective – than others.

Booker, Reporting Manager of the Global Public Affairs, Communications and Sustainability function at the Coca-Cola Company, described to the <IR> US Community on November 14, 2018 how Coca-Cola issues two reports: a short Annual Review and a Sustainability Report. They’re published months apart, in part because the data that feeds into the Sustainability Report are not all available in time for the Annual Review. The reports together represent the company’s integrated thinking, serving as chapters one and two of the same reporting story.

That story begins with stakeholder engagement. Communities, NGOs, investors and other stakeholders across the world have told Coca-Cola they need to hear more about how companies are responding to global trends. Not just consumer trends, but also how different social and environmental trends, gender equality and water sustainability, for example, are connected to Coca-Cola’s core business.

Coca-Cola is a global company, but global trends affect different parts of the world in different ways. Sustainable business in Latin America look very different than in South Asia, for example, and, Booker says, group presidents are expected to have their own perspectives on sustainability in their respective businesses. So Coca-Cola’s online sustainability map gives you the chance to drill deeper into the specific region and issue you might be interested in. Visibility at the local level provides a finer-grained look at how the company is managing risks.

This is one way that Coca-Cola uses digital tools more than most in giving its Sustainability Report local granularity. This year’s report also marks an evolution from previous reports, according to Booker, in telling a more consistent story across reports. One important marker of that shift: one design for both reports, with one writer drafting them both. The “stories” underlying Coca-Cola’s reporting can be linked to from either report.

That reflects the kind of integrated thinking the IIRC refers to, when it writes:

“<IR> is a process founded on integrated thinking that results in a periodic integrated report by an organization about value creation over time and related communications regarding aspects of value creation.

“An integrated report is a concise communication about how an organization’s strategy, governance, performance and prospects, in the context of its external environment, lead to the creation of value in the short, medium and long term.”

On the other hand, Coca-Cola’s two reports are not a single report, as the IIRC describes an integrated report. So is Coca-Cola's an “integrated report?” We’ll leave that to you to decide. And when you do, share your perspective with us in the comments below.