Latest reports ‘have evolved for the better’
• Companies show how they create a positive impact
Most of this year’s Integrated Reporting Award winners would agree that their integrated reports have evolved over time — for the better.
Each year, Nedbank builds on the previous year’s integrated report and continuously looks for new ways to enhance its disclosure in line with the principles and requirements of the integrated reporting framework and emerging disclosure requirements, best practice from other companies that excel in key components of integrated reporting, as well as the key discussions the bank has with its shareholders and other stakeholders on their evolving information needs, explains Nedbank Group CFO, Mike Davis.
In its 2021 integrated report Nedbank embraced the shift towards digital by designing its report with enhanced digital functionality and readability in mind. It has also made good progress on integrating governance and executive remuneration, demonstrating clear linkages to performance, strategy and the outlook. In addition, it has introduced commitments to the environmental and social aspects of ESG as corporate performance targets for longterm incentive awards.
Its latest integrated report includes progress on key sustainability measures such as the bank’s energy policy commitments, the sustainabledevelopment actions and investments it has made in support of purpose-led business and its contribution to the United Nations (UN) Sustainable Development Goals (SDGs), employee and client net promoter scores, as well as transformation and diversity metrics, says Davis.
“Our integrated report demonstrates how the Nedbank Group is delivering on its purpose which is ‘to use our financial expertise to do good’. We have incorporated our purpose as a strong thread throughout the report, communicating on how we are creating positive impacts for stakeholders and linking it up with the UN’s SDGs.”
Implats group executive for financial control, Ben Jager, says that in earlier years it was challenging for preparers in general to report concisely on the capitals, the trade-offs and the outcomes resulting from the use of these capitals. Understandable, he says, given that many integrated reports are geared towards reporting operational performance and the group structure rather than the capitals.
Implats’ integrated report has evolved over time, he says. “Connectivity between the various content elements has
improved, specifically the focus on strategy, the business model, risk, governance and stakeholder reporting in the context of the group’s purpose of creating a better future.”
More recently, he adds, in line with the implementation of the group’s emerging sustainability framework, which is informed by and linked to SDGs, there have been positive developments related to disclosures around sustainability and ESG metrics and their impact on valuecreation, including risks and opportunities, strategy, internal key performance indicators, governance and risk.
Jager believes this development is likely to expand in future when the International Sustainability Standards Board exposure drafts on sustainability become effective and local entities more widely adopt voluntary JSE sustainability and disclosure guidance.
For the first time this year Implats included a climate change report. Jager says the business recognises that climate change is a global challenge requiring businesses to reduce their carbon emissions across the value chain, while ensuring transparent communication and engagement with stakeholders. The group has made a commitment to reach carbon neutrality by 2050.
“The climate change report gives us an opportunity to disclose our carbon emissions and also to communicate the plans and projects we are implementing on the journey to reach carbon neutrality as well as our interim targets.”
Implats’ operating regions are increasingly exposed to extreme weather events brought on by climate change, he says. “At the same time, the auto catalyst market — which is related to internal combustion engines — for the platinum group metals we produce, faces uncertainty due to the adoption of the electrified drive trains.
“We communicate our understanding of these physical and transition risks in our climate change report, as well as any opportunities associated with these changes. In addition, where applicable, the financial impacts of climate change adaptations and mitigations are disclosed in the report.”
At AfroCentric Investment Corporation, the finance team has traditionally put the integrated report together. However, a growing recognition that the integrated report is the future of corporate reporting — and that more comprehensive and meaningful information about all aspects of an organisation’s performance, rather than only purely financial information, delivers benefits for both internal and external stakeholders — resulted in the firm recruiting an integrated reporting specialist in 2017.
“This meant we then had someone with an in-depth knowledge of the trends in the market and the integrated reporting framework which could be applied to our business,” says Bongiwe Ncube, GM: Group Financial Reporting at the AfroCentric Group.
He says that over the years the business has monitored the Integrated Reporting Awards and analysed the judges’ report to improve its own reporting. It has also engaged with Deloitte to go through its report and identify areas for improvement.
The biggest challenge in compiling AfroCentric’s integrated report, he says, was the time factor involved in collecting all the information to provide a complete picture of the company’s performance. “Providing a balanced and frank assessment can be a balancing act; you need to showcase success but not be afraid of being frank about areas of concern in terms of performance.”