This article first appeared on and Towards Sustainable Business and is republished with permission. Carol Adams is a Director of Integrated Horizons.

I have it on good authority that there are those in India who think that integrated reporting is doomed to failure, that companies need to choose between sustainability and integrated reporting and that sustainability reporting is the go.  I have no reason to doubt this for two reasons: 1) India is a big country and there will be many different views; 2) it is a view I’ve heard in other parts of the world too. But it may be wise not to jump to conclusions.

The International Integrated Reporting Council’s (IIRC) August newsletter announces a new multi-stakeholder <IR> lab in India brought about through a collaboration of the IIRC and the Confederation of Indian industry.  It is chaired by Koushik Chatterjee, CFO of Tata Steel and includes CFOs of leading Indian companies, academics and regulators. The “lab” will facilitate knowledge sharing.  This is an influential group of leaders not used to failing.  They plan to hold events and webinars and develop a handbook to support the practical implementation of integrated reporting.

Back to those who hold the view that sustainability reporting will win over integrated reporting…  Integrated and sustainability reporting are not competing.  It is not a case of either/or. It is not the purpose of integrated reporting to measure social and environmental sustainability impacts. Rather, I believe we are witnessing the early stages of widespread promulgation of a different way of thinking about corporate success and reporting (see Adams, forthcoming).

What integrated reporting becomes as time passes is, to a large extent, dependent on those who find fault with it, speaking out and getting involved in the process.   Its potential to create profound change comes from its call to senior executives and Board members to think long-term about their business model and how they create value and to whom, as well as disclosing their forward looking strategy.

The fact that Chief Financial Officers (CFOs) are supporting a form of reporting which considers value and the business model in ways that is not purely monetary is significant – in the past CFOs have often been the last of senior leaders to see the value in anything which can’t be measured in monetary terms.  CFOs focussing on short term financial gains and cost have seen social and environmental sustainability initiatives as an unnecessary cost rather than something which can add value to the business and reduce risks.

Financial reporting has been capturing a decreasing proportion of what is of value.  The emphasis in integrated reporting on thinking long term and its encouragement of broader thinking of the value creation process and the business model is an important one for CFOs to understand.

“At the very core of the concept of Integrated Reporting (IR), is the growing recognition that a number of factors determine the value of an organisation – some of these are financial or tangible in nature and are easy to account for in financial statements. However others, like people, natural resources, intellectual capital, markets, competition, etc., are harder to measure.” Tata Steel’s Integrated Report 2013

Anant Nadkarni recently retired as Vice-President, Group Corporate Sustainability at Tata says: “The priority for us is to develop new systems to capture and present value…  Accountants should join in to contribute, rather than inhibit this development…  In 1868 the founder of Tata said something like, “in a free enterprise, the community is not just another stakeholder, but in fact, it is the very purpose of our enterprise…   According to R M Lala, biographer of Tata, the word Wealth signifies Well-being!”

I would like to see business embrace this notion of wealth as well-being and the notion of ‘value for society’.  It probably won’t happen though unless ‘value for society’ is seen as being aligned to ‘value for investors’ – and this is where integrated reporting has the potential to help.


Adams CA (forthcoming) The International Integrated Reporting Council: a call to action Critical Perspectives on Accounting.  You can view the author’s copy here

Image: Bombay Stock Exchange by Jbarta via Wikipedia.