• Like
  • Save
Ir discussion-paper-2011
Upcoming SlideShare
Loading in...5
×
 

Ir discussion-paper-2011

on

  • 1,802 views

 

Statistics

Views

Total Views
1,802
Views on SlideShare
1,794
Embed Views
8

Actions

Likes
0
Downloads
3
Comments
0

1 Embed 8

http://www.goodpaper.sg 8

Accessibility

Upload Details

Uploaded via as Adobe PDF

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

    Ir discussion-paper-2011 Ir discussion-paper-2011 Document Transcript

    • TOWARDS INTEGRATED REPORTINGCommunicating Value in the 21st Century
    • ABOUT THIS DISCUSSION PAPER Contents The International Integrated Reporting Committee (IIRC) has About this Discussion Paper 1 brought together world leaders from the corporate, investment, Summary 2 accounting, securities, regulatory, academic, civil society and What is Integrated Reporting? standard-setting sectors to develop a new approach to reporting. Why do We Need Integrated Reporting? An International Framework This approach, Integrated Reporting, will meet the needs of the Future Direction Your Comments Requested 21st century. It builds on the foundations of financial, management The World has Changed – Reporting Must Too 4 commentary, governance and remuneration, and sustainability Towards Integrated Reporting 6 reporting in a way that reflects their interdependence. Integrated Reporting Defined The IIRC aims to forge a global consensus on the direction in which Building on Developments to Date reporting needs to evolve, creating a framework for reporting An International Integrated Reporting Framework 8 How is Integrated Reporting Different? that is better able to accommodate complexity, and, in so doing, Business Model and Value Creation brings together the different strands of reporting into a coherent, The Building Blocks integrated whole. Guiding Principles Content Elements This Discussion Paper considers the rationale behind the move Towards Integrated Reporting – Innovation in Action towards Integrated Reporting, offers initial proposals for the What will Integrated Reporting Mean for Me? 20 Benefits, Challenges and Responses development of an International Integrated Reporting Framework Reporting Organization Perspective and outlines the next steps towards its creation and adoption, Investor Perspective including the publication of an Exposure Draft in 2012. Its Policy-maker, Regulator and Standard-setter Perspective Other Perspectives purpose is to prompt input from all those with a stake in Future Direction 25 improved reporting, including both producers and users of reports. Summary of Consultation Questions 26 Your answers to the Consultation Questions in this Discussion Paper, and any Acknowledgements and Endnotes 28 other comments you would like to make, will be important to us in refining these proposals. They should be submitted to dpresponses@theiirc.org or online at www.theiirc.org. Please identify in your response the organization to which you belong and where it is located. All comments received will be consideredMANAGEMENT COMMENTARY a matter of public record and will be posted on www.theiirc.org. Comments should be submitted by Wednesday 14th December 2011.GOVERNANCE AND REMUNERATION REPORTING You can register at www.theiirc.org to be notified when additional information is published, when regional roundtables or webinars are held or for information about the IIRC Pilot Programme.www.theiirc.orgFINANCIAL STATEMENTSSUSTAINABILITY REPORTING Copyright © September 2011 by the International Integrated Reporting Committee. All rights reserved. Permission is granted to make copies of this work to achieve maximum exposure and feedback provided that each copy bears the following credit line: Copyright © September 2011 by the International Integrated Reporting Committee. All rights reserved. Used with permission of the International Integrated Reporting Committee. Permission is granted to make copies of this work to achieve maximum exposure and feedback. Towards Integrated Reporting 1
    • SUMMARYThe development of Integrated Reporting is designed to enhance and consolidateexisting reporting practices...to move towards a reporting framework that providesthe information needed to assess organizational value in the 21st century.What is Integrated Reporting? reflecting this growing complexity. Such a framework needs to The initial focus is on reporting by larger companies and on Future Direction bring together the diverse but currently disconnected strands of the needs of their investors. The Framework will help to elicitIntegrated Reporting brings together material information The development of Integrated Reporting is designed to enhance reporting into a coherent, integrated whole, and demonstrate consistent reporting by organizations, provide broad parametersabout an organization’s strategy, governance, performance and consolidate existing reporting practices and, through an organization’s ability to create value now and in the future. for policy-makers and regulators and provide a focus forand prospects in a way that reflects the commercial, social collaboration, consultation and experimentation, to move harmonizing reporting standards.and environmental context within which it operates. It provides towards a reporting framework that provides the informationa clear and concise representation of how an organization International differences in reporting needed to assess organizational value in the 21st century.demonstrates stewardship and how it creates and sustains value. Reporting requirements have evolved separately, and differently, The building blocks The next steps that the IIRC will take in this direction are listed below.An Integrated Report should be an organization’s primary in various jurisdictions. This has significantly increased the Five Guiding Principles underpin the preparation of anreporting vehicle. compliance burden for the growing number of organizations Integrated Report. • Undertake a Pilot Programme to encourage experimentation that report in more than one jurisdiction and makes it difficult to and innovation among companies and investors. • Strategic focus compare the performance of organizations across jurisdictions. • Develop an International Integrated Reporting FrameworkWhy do We Need Integrated Reporting? • Connectivity of information Exposure Draft, reflecting responses received to thisSince the current business reporting model was designed, • Future orientation Discussion Paper and the experience gained from the firstthere have been major changes in the way business is The benefits of Integrated Reporting • Responsiveness and stakeholder inclusiveness year of the Pilot Programme.conducted, how business creates value and the context in Research has shown that reporting influences behaviour. Integrated Reporting results in a broader explanation of • Conciseness, reliability and materiality • Work with others to support the development of emergingwhich business operates. These changes are interdependentand reflect trends such as: performance than traditional reporting. It makes visible an measurement and reporting practices relevant to These Principles should be applied in determining the content organization’s use of and dependence on different resources Integrated Reporting. of an Integrated Report, based on the key Content Elements• globalization, and relationships or “capitals” (financial, manufactured, human, • Raise awareness among investors and other stakeholders summarized below. The presentation of the Elements should• growing policy activity around the world in response to intellectual, natural and social), and the organization’s access make the interconnections between them apparent. and encourage organizations to adopt and contribute to financial, governance and other crises, to and impact on them. Reporting this information is critical to: the evolution of Integrated Reporting. • Organizational overview and business model• heightened expectations of corporate transparency and • a meaningful assessment of the long-term viability of the • Explore opportunities for harmonizing reporting accountability, • Operating context, including risks and opportunities requirements within and across jurisdictions. organization’s business model and strategy;• actual and prospective resource scarcity, • Strategic objectives and strategies to achieve those • Develop institutional arrangements for the ongoing • meeting the information needs of investors and other objectives governance of Integrated Reporting.• population growth, and stakeholders; and • Governance and remuneration• environmental concerns. • ultimately, the effective allocation of scarce resources. • Performance Your Comments RequestedAgainst this background, the type of information that is needed An International Framework • Future outlook Please join us in this unique effort to develop an overarchingto assess the past and current performance of organizationsand their future resilience is much wider than is provided for International Integrated Reporting Framework by providing The IIRC is developing an International Integrated Reporting feedback on this Discussion Paper. Your answers to theby the existing business reporting model. While there has Framework that will facilitate the development of reportingbeen an increase in the information provided, key disclosure Consultation Questions in this Discussion Paper, and any other over the coming decades. The core objective of the Framework comments you would like to make, should be submitted togaps remain. is to guide organizations on communicating the broad set of Who is the IIRC? dpresponses@theiirc.org or online at www.theiirc.org. For theReports are already long and are getting longer. But, because information needed by investors and other stakeholders to purpose of analysis, you are asked to identify the organization The International Integrated Reporting Committee (IIRC) isreporting has evolved in separate, disconnected strands, critical assess the organization’s long-term prospects in a clear, concise, to which you belong and where it is located. All comments an international cross-section of leaders from the corporate,interdependencies between strategy, governance, operations connected and comparable format. This will enable those received will be considered a matter of public record and will investment, accounting, securities, regulatory, academic, civiland financial and non-financial performance are not made clear. organizations, their investors and others to make better short- be posted on www.theiirc.org. society and standard-setting sectors. See page 28 for a listTo provide for the growing demand for a broad information and long-term decisions. of members.set from markets, regulators and civil society, a framework is Comments should be submitted by Wednesday 14thneeded that can support the future development of reporting, December 2011.2 www.theiirc.org Towards Integrated Reporting 3
    • THE WORLD HAS CHANGED – Key points in this section • The world has changed. Reporting needs to keep pace.REPORTING MUST TOO • While reporting has expanded and evolved, it has also become increasingly complex. Critical interdependencies are not brought to light and disclosure gaps remain. • It is not enough to keep on adding more information. The connections need to be made clear and the clutter needs to be removed. Only the most material information should be included in the Integrated Report. • Coordinated, international action is needed now. • The IIRC has brought together key organizations in response.While the architecture necessary to support changing information needs is developing,many currently perceive a reporting landscape of confusion, clutter and fragmentation.The world has changed due to globalization and resulting Reporting needs to keep pace. The traditional reporting For many organizations, reporting is seen as a legal compliance In the context of financial reporting, international convergenceinterdependencies in economies and supply chains, advances model was developed for an industrial world. Although it process, rather than as a process for communicating what matters. has been recognized as important, and progress has beenin technology, rapid population growth and increasing global continues to play a valuable role with respect to stewardship of Furthermore, different strands of reporting have tended to evolve made towards international standards, for example, throughconsumption. This has had a significant impact on the quality, financial capital, it nonetheless focuses on a relatively narrow separately, with additional requirements and information requests the current work on the convergence of International Financialavailability and price of resources, including water, food and account of historical financial performance and of the value- being bolted on to the existing model, rather than being integrated Reporting Standards (IFRS) and U.S. Generally Acceptedenergy. It also puts increasing pressure on ecosystems that are creation process. into it. The pressure to keep adding more continues to grow. Accounting Principles (U.S. GAAP). Nevertheless, many otheressential to the economy and society. aspects of reporting continue to be governed by national As business has become more complex and gaps in traditional This has created a complex and overlapping set of disconnected or regional laws, regulations and stock exchange listingThis has political, social and commercial implications. Businesses reporting have become prominent, new reporting requirements disclosures. As a result, critical interdependencies that exist are requirements, and by a mixture of mandatory and voluntaryare being forced to react to these changes in order to remain have been added through a patchwork of laws, regulations, not made clear, for example, between: standards, codes and guidance.successful and, in many cases, are developing new business standards, codes, guidance and stock exchange listing • strategy and risk,models that recognize the need to innovate and do more with less. requirements. This has led to an increase in the information The IIRC has brought together key organizations in provided through: • financial and non-financial performance, response. The IIRC was established in 2010 in recognition ofThe need for a broader information set is clearly demonstrated • governance and performance, and the need to move towards an International Integrated Reportingby the small percentage of market value now explained by • longer and more complex financial reports and • the organization’s own performance and that of others in Framework that is fit-for-purpose for the 21st century.physical and financial assets – down to only 19% in 2009 from management commentaries;283% in 1975. The remainder represents intangible factors, some its value chain. The IIRC seeks to build upon, enhance and support the work that • increased reporting on governance and remuneration; andof which are explained within financial statements, but many of Coordinated, international action is needed now. has been done to date, and is ongoing, to achieve a reporting • standalone sustainability reporting which has also evolved 3which are not.1 The information available to management, investors and framework that: rapidly over the past decade. other stakeholders, and the way in which it is presented, • communicates the organization’s strategy, business model, These developments, led by policy-makers, companies and have a fundamental impact on decision-making. The time hasComponents of S&P 500 market value performance and plans against the background of the other reporting organizations, investors and civil society, are come to step back and rethink what information is needed to100 context in which it operates; 83 68 32 20 19 welcome reactions designed to elicit the information needed in provide a clear, concise picture of performance, impacts and a changing world. However, while the architecture necessary • provides a coherent framework within which market and interdependencies. Such a picture must: to support changing information needs is developing, many regulatory driven reporting requirements can be integrated;80 80 81 currently perceive a reporting landscape of confusion, clutter • drive innovation, • is internationally agreed, so as to encourage convergence and fragmentation. Much of the information now provided is • be focused on communication and not just compliance, and of approach and hence more ready understanding of 68 disconnected and key disclosure gaps remain. • support resource allocation decisions that are consistent with information presented;60 As a result, although there is evidence that investors recognize sustained value creation and with long-term economic stability. • reflects the use of and effect on all of the resources and the materiality of non-financial factors, they do not feel that relationships or “capitals” (human, natural and social as In an increasingly global marketplace, comparability is well as financial, manufactured and intellectual) on which the information they have available is adequate for decision- important. Reporting requirements have evolved separately,40 making.4 For example, while there is management recognition the organization and society depend for prosperity; and and differently, in various jurisdictions. This has increased the that sustainability issues should be fully integrated into the reporting and administrative burden for the growing number • reflects and communicates the interdependencies between 32 strategy and operations of a company (with 96% of CEOs from the success of the organization and the value it creates for of organizations that report in more than one jurisdiction. It the world’s largest companies expressing this opinion5), only has also resulted in diverging disclosure practices that inhibit investors, employees, customers and, more broadly, society.20 17 21% of listed companies report any sustainability information investors and others from understanding and comparing the based on Bloomberg research.6 information they need for decision-making. It is not enough to keep on adding more information 1975 1985 1995 2005 2009 – the connections need to be made clear and the Physical and financial assets clutter needs to be removed. Corporate reports are Other factors already long and, in many cases, they are getting longer. Length and excessive detail can obscure critical information rather thanThe percentage of market value represented by physical and financial assets versus aid understanding.7 Only the most material information should Q1. (a) Do you believe that action is needed to help improve how organizations representintangible factors, some of which are explained within financial statements, but manyof which are not.1 be included in the Integrated Report. their value-creation process? Why/why not? (b) Do you agree that this action should be international in scope? Why/why not?4 www.theiirc.org Towards Integrated Reporting 5
    • TOWARDS INTEGRATED REPORTING Key points in this section • Integrated Reporting combines the different strands of reporting (financial, management commentary, governance and remuneration, and sustainability reporting) into a coherent whole that explains an organization’s ability to create and sustain value. • The main output of Integrated Reporting is an Integrated Report: a single report that the IIRC anticipates will become an organization’s primary report. • Integrated Reporting can reduce the reporting burden on organizations while improving investors’, andIntegrated Reporting brings together the material information about an organization’s other stakeholders’, insight and understanding.strategy, governance, performance and prospects in a way that reflects the commercial, • Integrated Reporting reflects and builds upon existing developments in reporting.social and environmental context within which it operates. It provides a clear andconcise representation of how an organization creates value, now and in the future.Integrated Reporting Defined contributes to success over time. It will increasingly be through Building on Developments to Date • The publication during 2010 and 2011 of: this process of “integrated thinking” that organizations are – the IFRS Practice Statement, “ManagementIntegrated Reporting brings together the material information Integrated Reporting reflects and builds upon existing able to create and sustain value. The effective communication Commentary”, an international framework for narrativeabout an organization’s strategy, governance, performance developments in reporting, including the following. of this process can help investors, and other stakeholders, reporting to provide a context for interpreting anand prospects in a way that reflects the commercial, social to understand not only an organization’s past and current • The ongoing international convergence of accounting organization’s financial position, financial performanceand environmental context within which it operates. It provides performance, but also its future resilience. standards through the collaborative efforts of the and cash flows;a clear and concise representation of how an organization International Accounting Standards Board (IASB) and thedemonstrates stewardship and how it creates value, now and The main output of Integrated Reporting is an Integrated – the Integrated Reporting Committee of South Africa’s U.S.-based Financial Accounting Standards Board (FASB)in the future. Integrated Reporting combines the most material Report: a single report that the IIRC anticipates will become an Discussion Paper, “Framework for Integrated Reporting to improve both IFRS and U.S. GAAP, and to eliminate theelements of information currently reported in separate reporting organization’s primary report, replacing rather than adding and the Integrated Report”; differences between them.strands (financial, management commentary, governance and to existing requirements. Such a report enables evolving – the Global Reporting Initiative’s “G3.1” Sustainabilityremuneration, and sustainability) in a coherent whole, and reporting requirements, both market-driven and regulatory, to • The work of The Prince’s Accounting for Sustainability Reporting Guidelines, and its current project to developimportantly: be organized into a coherent narrative. An Integrated Report Project, the Global Reporting Initiative, the World Business a fourth generation of Guidelines over the coming two provides a clear reference point for other communications, Council for Sustainable Development, the World Resources• shows the connectivity between them; and years; and including any specific compliance information, such as investor Institute, the World Intellectual Capital Initiative, the Carbon• explains how they affect the ability of an organization to Disclosure Project, the Climate Disclosure Standards Board, – the International Auditing and Assurance Standards presentations, detailed financial information, operational data create and sustain value in the short, medium and long term. the European Federation of Financial Analysts, the United Board’s Discussion Paper, “The Evolving Nature and sustainability information. Much of this information might Nations (UN) Conference on Trade and Development, of Financial Reporting: Disclosure and Its AuditIntegrated Reporting reflects what can be called “integrated move to an online environment, reducing clutter in the primary the UN Global Compact, the International Corporate Implications”.thinking” – application of the collective mind of those charged report, which will focus only on the matters that the organization considers most material to long-term success. Governance Network, the Collaborative Venture on Valuing The IIRC aims to forge a global consensus on the direction inwith governance (the board of directors or equivalent), and the Non-Financial Performance, and many others to develop which reporting needs to evolve, creating a framework forability of management, to monitor, manage and communicate principles, methodologies, guidelines and standards for the reporting that is better able to accommodate complexity and,the full complexity of the value-creation process, and how this accounting and reporting of non-financial information. in so doing, brings together the different strands of reporting into a coherent, integrated whole. All of the organizations referred to above are part of, or collaborating closely with, theThe evolution of corporate reporting IIRC to achieve this aim.1960 1980 2000 2020 Financial Statements Financial Statements Financial Statements Management Integrated Sustainability Commentary Reporting Reporting Management Commentary Environmental Management Reporting Commentary Governance Financial Governance Sustainability and Statements and Reporting Remuneration Remuneration Governance and Remuneration Q2. Do you agree with the above definition of Integrated Reporting? Why/why not?6 www.theiirc.org Towards Integrated Reporting 7
    • AN INTERNATIONAL INTEGRATEDREPORTING FRAMEWORKThe Framework will provide high-level guidance to organizations that prepare IntegratedReports, helping to provide consistency of content and approach in a way that demonstrates How is Integrated Reporting Different?the extent to which integrated thinking is occurring within the organization. Thinking Isolated Integrated Because traditional reporting occurs in silos, it encourages thinking in silos. Integrated Reporting, Key points in this section on the other hand, reflects, and supports, integrated thinking – monitoring, managing and • The IIRC is developing a Framework to support the future development of reporting. communicating the full complexity of the value creation process and how this contributes to success over time. Integrated Reporting demonstrates the extent to which integrated thinking is occurring • The Framework will help ensure consistent reporting by organizations, will provide broad parameters within the organization. for policy-makers and regulators, and will be a focus for harmonizing reporting standards. • The initial focus is on reporting by larger companies and on the needs of their investors. Stewardship Financial capital All forms of capital • An organization’s business model and its ability to create and sustain value in the short, medium and An Integrated Report displays an organization’s stewardship not only of financial capital, but also long term are central themes of the Framework, which includes Guiding Principles and Content Elements. of the other “capitals” (manufactured, human, intellectual, natural and social), their interdependence • Integrated Reporting results in a broader explanation of performance than traditional reporting. and how they contribute to success. This broader perspective requires consideration of resource • It makes visible how the organization uses different capitals (financial, manufactured, human, intellectual, usage and risks and opportunities along the organization’s full value chain. natural and social), its impact on them, and their interdependence. Focus Past, financial Past and future, connected, strategic Annual reporting at present is largely focused on past financial performance and financial risks. Other reports and communications may cover other resources and relationships, but they are seldom presented in a connected way, or linked to the organization’s strategic objectives and its ability to create and sustain value in the future.The aim of the International Integrated Reporting Framework is to The initial focus is on reporting by larger companies. However, Timeframe Short term Short, medium and long termsupport the development of reporting over the coming decades, the IIRC expects that the concepts underlying Integratedcentred on how an organization creates and sustains value. Reporting will be equally applicable to small- and medium-sized Much of the media and regulatory attention in response to the global financial crisis has focused enterprises, the public sector and not-for-profit organizations. on “short-termism” as one contributory factor. Although short-term considerations are important inThis section outlines initial proposals for the development of the many ways, placing them in context is also essential. Integrated Reporting specifically factors inFramework, setting out concepts, principles and key elements Integrated Reports will meet the needs of a broad range of short-, medium- and long-term considerations.around which it can be built. These proposals offer a starting stakeholders. Initially, however, the IIRC intends to focus thepoint for discussion, rather than a complete Framework. An development of the Framework on the needs of investors Trust Narrow disclosures Greater transparencyExposure Draft of the Framework is planned for release in 2012. (providers of debt and equity), consistent with the current dutiesDuring the comment period for this Discussion Paper, interim of those charged with governance in many jurisdictions. Financial reporting focuses primarily on a narrow series of mandated disclosures. Although anguidance material will be made available on the IIRC website. increasing number of organizations are improving their transparency, for example, through The following pages include: voluntary sustainability reporting, in absolute terms that number is still low. By emphasizingThis material will be built upon as further experience is obtainedthrough the IIRC Pilot Programme (see page 24). • a summary of the key differences between Integrated transparency, for example, covering a broader range of issues and disclosing the positive Reporting and traditional reporting; with the negative, Integrated Reporting helps to build trust.The Framework will provide high-level guidance to organizationsthat prepare Integrated Reports, helping to provide consistency • a discussion of the central importance of an organization’s Adaptive Rule bound Responsive to individual circumstancesof content and approach in a way that demonstrates the extent business model and of value creation;to which integrated thinking is occurring within the organization. Today’s reporting is often said to be too compliance orientated, reducing the scope for • guiding principles for developing an Integrated Report; andIt will also provide policy-makers and regulators with broad organizations to exercise an appropriate amount of judgement. While a certain level of • content elements that describe the core information to be compliance orientation is necessary to ensure consistency and enable comparison, Integratedparameters within which consistent regulatory reporting regimes included in an Integrated Report.can be developed across different jurisdictions. The Framework Reporting offers a principles-based approach that drives greater focus on factors that are materialwill be a focal point for the harmonization of current standards. to particular sectors and organizations. It permits an organization to disclose its unique situation in clear and understandable language. Concise Long and complex Concise and material Long and complex reports are often impenetrable for many readers. A key objective for Integrated Q3. Do you support the development of an International Integrated Reporting Reporting is to de-clutter the primary report so that it covers, concisely, only the most material Framework? Why/ why not? information. Q4. (a) Do you agree that the initial focus of Integrated Reporting should be on reporting Technology enabled Paper based Technology enabled by larger companies and on the needs of their investors? Why/why not? While the internet and XBRL are introducing elements of technological innovation, many corporate (b) Do you agree that the concepts underlying Integrated Reporting will be reports are still presented as if they were entirely paper based. Integrated Reporting takes advantage of new and emerging technologies to link information within the primary report equally applicable to small and medium enterprises, the public sector and and to facilitate access to further detail online where that is appropriate. not-for-profit organizations?8 www.theiirc.org Towards Integrated Reporting 9
    • An International Integrated Reporting Framework (continued)Business Model and Value CreationCentral to Integrated Reporting is the organization’s business By describing, and measuring where it is practicable, the Resources and relationships or “capitals”model. There is no single, generally accepted definition of the material components of value creation and, importantly, the All organizations depend on a variety of resources • ability to understand and implement an organization’sterm “business model”. However, it is often seen as the process relationships between them, Integrated Reporting results in a and relationships for their success. The extent to which strategies, andby which an organization seeks to create and sustain value. broader explanation of performance than traditional reporting. organizations are running them down or building them up • loyalties and motivations for improving processes, In particular, it makes visible all the relevant capitals on which has an important impact on the availability of the resourcesAn organization determines its business model through choices goods and services, including their ability to lead performance (past, present and future) depends, how the and the strength of the relationships that support the long-that typically recognize that value is not created by or within and to collaborate. organization uses those capitals, and its impact on them, as term viability of those organizations. These resources andthe organization alone, but is: illustrated by the diagram below. This information is critical relationships can be conceived as different forms of “capital”. Intellectual capital: Intangibles that provide competitive• influenced by external factors (including economic to the effective allocation of scarce resources. It will provide advantage, including: conditions, societal issues and technological change) that a meaningful presentation of the organization’s prospects for The purpose of the following categorization and descriptions, long term resilience and success, and facilitate the informational based on various sources and established models,8 is to help • intellectual property, such as patents, copyrights, present risks and opportunities, which create the context needs of, and assessments by, investors and other stakeholders. readers understand the concepts underlying this Discussion software and organizational systems, procedures within which the organization operates, Paper; it is not intended to be the only way the capitals can and protocols, and• co-created through relationships with others (including Importantly, a reporting framework centred around an be categorized or described. The extent to which different • the intangibles that are associated with the brand employees, partners, networks, suppliers and customers), and organization’s business model provides a better basis for organizations use or impact each of these capitals varies: not all and reputation that an organization has developed.• dependent on the availability, affordability, quality and management to explain what really matters, bringing reporting capitals are equally relevant or applicable to all organizations. management of various resources, or “capitals” (financial, closer to the way the business is run. Natural capital: Natural capital is an input to the manufactured, human, intellectual, natural and social). Financial capital: The pool of funds that is: production of goods or the provision of services. An organization’s activities also impact, positively or negatively,Integrated Reporting therefore aims to provide insights about: • available to the organization for use in the production on natural capital. It includes: of goods or the provision of services, and• significant external factors that affect an organization, • water, land, minerals and forests, and • obtained through financing, such as debt, equity or• the resources and relationships used and affected by grants, or generated through operations or investments. • biodiversity and eco-system health. the organization, and Manufactured capital: Manufactured physical objects Social capital: The institutions and relationships established• how the organization’s business model interacts with (as distinct from natural physical objects) that are available within and between each community, group of stakeholders external factors and resources and relationships to to the organization for use in the production of goods or the and other networks to enhance individual and collective well- create and sustain value over time. provision of services, including: being. Social capital includes: • buildings, • common values and behaviours, • equipment, and • key relationships, and the trust and loyalty that an • infrastructure (such as roads, ports, bridges and waste organization has developed and strives to build Financial Financial and protect with customers, suppliers and business and water treatment plants). External factors partners, and Human capital: People’s skills and experience, and their Manufactured Manufactured • an organization’s social licence to operate. motivations to innovate, including their: • alignment with and support of the organization’s Human Human governance framework and ethical values such as its recognition of human rights, Business model How the organization creates and sustains value in the short, medium and long term Intellectual Intellectual Natural Natural External factors Social Social Q5. Are: (a) the organization’s business model, and (b) its ability to create and sustain value in the short, medium and long term, appropriate as central themes for the future direction of reporting? Why/why not? Q6. Do you find the concept of multiple capitals helpful in explaining how an organization creates and sustains value? Why/why not?10 www.theiirc.org Towards Integrated Reporting 11
    • An International Integrated Reporting Framework (continued)The Building Blocks Guiding Principles The following guiding principles underpin the preparation of an Integrated Report, informing the content of the report and how information is presented.Guiding Principles – Five guiding principles underpin the Content Elements – The principles should be applied in Strategic focus: An Integrated Report provides insight into the This involves analyzing:preparation of an Integrated Report (see page 13). determining the content of an Integrated Report, based on the organization’s strategic objectives, and how those objectives • how sustainable the organization’s business model is; key elements summarized below. The presentation of the elements relate to its ability to create and sustain value over time and the• Strategic focus • the relationship between past and future performance; and should make the interconnections between them apparent resources and relationships on which the organization depends.• Connectivity of information (see page 14 – 15). • the factors that may change that relationship, for example, An Integrated Report communicates what is important to the• Future orientation whether the organization will be able to access the • Organizational overview and business model organization from a strategic perspective. It outlines: resources it needs at a price it can afford.• Responsiveness and stakeholder inclusiveness • Operating context, including risks and opportunities • the organization’s strategic objectives;• Conciseness, reliability and materiality An Integrated Report may include targets, forecasts, projections, • Strategic objectives and strategies to achieve • the strategies it has in place, or plans to implement, in order estimates and sensitivity analyses. those objectives to achieve them; and • how they relate to other components of its business model. Responsiveness and stakeholder inclusiveness: An Integrated • Governance and remuneration Report provides insight into the organization’s relationships with • Performance This may include, for example, highlighting significant new its key stakeholders and how and to what extent the organization • Future outlook opportunities, risks and dependencies that flow from the understands, takes into account and responds to their needs. organization’s market position, strategies and business model. Integrated Reporting emphasizes the importance of relationships It also clearly articulates how the organization uses resources and with the organization’s stakeholders. relationships. This includes reporting on financial, manufactured, Stakeholders provide useful insights about matters that are human, intellectual, natural and social capital to the extent each important to them, including economic, environmental and social contributes materially to the organization’s ability to create and issues. This assists the organization to: Co sustain value. nn • identify material issues; ec us tiv Connectivity of information: An Integrated Report shows ity foc of the connections between the different components of the • develop and evaluate strategies; and gic inf ate or organization’s business model, external factors that affect the • manage activities, including strategic and accountable Str ma tio organization, and the various resources and relationships on responses to material issues. n Operating context, which the organization and its performance depend. An Integrated Report enhances transparency and accountability, including risks and Connectivity is central to ensuring that an Integrated Report: which are essential in building trust and resilience, by disclosing: opportunities • illuminates the changing nature of business decision-making, • the nature and quality of the organization’s relationships and the critical linkages in business thinking and activity; and with key stakeholders, such as customers, suppliers, • helps to break down established silos in the way employees and local communities; and information is reported, and the traditional focus primarily • how their issues are understood, taken into account and Future outlook Strategic objectives on financial matters. responded to. Con Examples of connectivity include: Conciseness, reliability and materiality: An Integrated Report cisen Organizational provides concise, reliable information that is material to assessing • information about how changes in the market environment overview and the organization’s ability to create and sustain value in the short, ess, impact strategy; ation business model medium and long term. • links between the different elements in the organization’s market relia rient analysis and its assessment and explanation of risk; and Senior management and those charged with governance must bility exercise judgement in: re o • how strategies link to key performance indicators (KPIs), key risk indicators (KRIs) and remuneration. • distinguishing between information that is material and and Futu should therefore be included in the Integrated Report, mate Importantly, an Integrated Report clearly presents the linkage and other information that may be relatively static or only between financial performance and the organization’s use of, relevant to some report users; conciseness is enhanced rialit Performance Governance and and impact on, the significant resources and relationships upon remuneration when the latter is included separately on the organization’s which it depends. y website or in other forms of communication; and Future orientation: An Integrated Report includes • deciding whether information is sufficiently reliable to be management’s expectations about the future, as well as other included in an Integrated Report. Responsiveness and stakeholder inclusiveness information to help report users understand and assess the While reliable information needs to be complete, neutral and organization’s prospects and the uncertainties it faces. free from error, it is recognized that this is seldom, if ever, Future orientation includes: achievable in every respect, so the objective is to maximize • how the organization balances short- and long-term these qualities to the extent practicable, for example, by ensuring Q7. Do the Guiding Principles identified in the Discussion Paper provide a sound foundation for preparing interests; that any negative issues are as faithfully reported as positive an Integrated Report – are they collectively appropriate; is each individually appropriate; and are there ones. Reliability also encompasses the need for information to be • where the organization expects it will go over time; other Guiding Principles that should be added? Why/why not? comparable between organizations and consistent for the same • how it plans to get there; and organization over time. Reliability is enhanced by mechanisms • what the critical enablers, challenges and barriers may be such as robust stakeholder engagement and independent, along the way. external assurance.12 www.theiirc.org Towards Integrated Reporting 13
    • An International Integrated Reporting Framework (continued)Content ElementsAn Integrated Report includes the following Content Elements, answering the respective question posed for each. These elementsare fundamentally linked to each other and are presented in the Integrated Report in a way that makes the interconnections between Governance and remuneration: What is the organization’s governance structure, and how doesthem apparent, rather than as isolated, standalone sections. Explanations of material changes since prior reporting periods are governance support the strategic objectives of the organization and relate to the organization’s approachparticularly important. to remuneration? An Integrated Report provides insight about the organization, including its culture, ethical values organization’s oversight and tone at the top. It includes: and relationships with key stakeholders; and • an explanation of the organization’s leadership • how the remuneration of executives and Organizational overview and business model: What does the organization do and how does it create and strategic decision-making processes, those charged with governance is linked and sustain value in the short, medium and long term? including the skill set of those charged with to performance in the short, medium and governance; long term, including how it is linked to the The Integrated Report provides essential context • its business model, value drivers and critical organization’s use of and impact on the by identifying: stakeholder dependencies; and • what actions those charged with governance have resources and relationships on which • its attitude to risk. taken to influence the strategic direction of the • the organization’s mission, principal activities, it depends. markets, products and services; Performance: How has the organization performed against its strategic objectives and related strategies? Operating context, including risks and opportunities: What are the circumstances under which the An Integrated Report includes qualitative and Performance information includes a description of the organization operates, including the key resources and relationships on which it depends and the key risks quantitative information, including: organization’s view of its major external economic, and opportunities that it faces? environmental and social impacts and risks up and • KPIs and KRIs regarding the organization’s down the value chain, along with material quantitative To provide context, an Integrated Report identifies: to its impact on, and the continued availability, performance against its strategic objectives information to the extent practicable. quality and affordability of, relevant resources. and related strategies; • the commercial, social and environmental While other reports and communications (such as context within which the organization operates, This Content Element builds on the high-level • the organization’s impacts (both positive and negative) on the resources and relationships financial statements, a sustainability report or detailed including significant laws and regulations overview of the organization and includes: website disclosures) may be referenced or linked that affect the organization’s ability to create on which it depends; • a more in-depth description of material issues; for those report users who want additional detail on and sustain value in the short, medium and • the significant external factors impacting various aspects of performance, the performance long term; • the organization’s process for determining which performance; and discussion in an Integrated Report is considerably issues it considers material; and • how the organization fared against its targets. • the resources and relationships that are key more concise and connected. The linkages between to the organization’s success, including key • how the material issues affect the organization’s past and current performance and between current ability to create and sustain value over time Information regarding financial performance is stakeholders, their legitimate needs, interests integrated with information regarding performance performance and future outlook should be made clear. and expectations, and their importance to the (e.g., how the organization integrates key emerging or escalating risks and opportunities with respect to the other capitals. The discussion also organization; and encompasses how innovation affects the ability of the into its strategies). • the organization’s key risks and opportunities, organization to create and sustain value. including those that relate to its relationships and Future outlook: What opportunities, challenges and uncertainties is the organization likely to encounter Strategic objectives and strategies to achieve those objectives: Where does the organization want to go in achieving its strategic objectives and what are the resulting implications for its strategies and future and how is it going to get there? performance? An Integrated Report describes the organization’s It identifies: Future outlook builds on other Content Elements to • potential repercussions of where the strategic objectives and its strategies to achieve highlight anticipated changes over time. It provides organization expects it will go in the short, • risk management arrangements related to key those objectives. It sets out how the organization will information, built on sound and transparent analysis, medium and long term, resources and relationships; measure achievement and target outcomes for the about: • the actions needed to get there, and short, medium and long term. • the linkage between strategies and other Content Elements; and • how the organization is currently equipped to • the associated uncertainties. This discussion builds on the description of the respond to the operating context that it is likely • what makes the organization unique and able The Integrated Report should identify any real organizational overview and operating context to to face in the future, to realize value in the future, such as the extent risks that could have extreme consequences, even provide report users with an understanding of what • how the organization balances short- and to which sustainability considerations have though the probability of their occurrence might be drives and protects the value of the organization. long-term interests, been embedded into its strategy to give it a considered quite small. competitive advantage. Q8. Do the Content Elements identified in the Discussion Paper provide a sound foundation for preparing an Integrated Report – are they collectively appropriate; is each individually appropriate; and are there other Content Elements that should be added? Why/why not?14 www.theiirc.org Towards Integrated Reporting 15
    • Towards Integrated Reporting – Innovation in Action Many organizations are taking innovative approaches to to provide definitive guidance; rather, they are presented here aspects of reporting that are often consistent with the concept to illustrate reporting innovation in the particular circumstances of Integrated Reporting. Few organizations, if any, however, of an organization that might be regarded as “good practice” could claim to have achieved the ideal of Integrated Reporting. at present.As an integrated energy and chemicals further Sasol aims to meet stakeholders’ expectations The IIRC Pilot Programme will provide company and to exceed targeted rates of return in a sustainable manner. Presented on pages 16 – 19 is a small selection of examples of opportunity for experimentation to inform the development of the As an integrated energy and chemicals company Sasol aims to meet stakeholders’ expectations and to exce current innovation. These might not be “perfect” illustrations of all Framework, and the IIRC also encourages contributions by other aspects of the Framework in this document and are not intended our integrated business model organizations of innovative examples of good practice. our integratedand Summarized Sasol Annual Review business model Innovation Research AkzoNobel Report 2010 pp 52 – 53 http://www.akzonobel.com/news/reports/2010/annual_report_2010.aspx As an integratedFinancialchemicals company Sasol– 5 to meet stakeholders’ expectations energy and Information pp 4 aims Exploration and production http://www.sasol.com/sasol_internet/downloads/sasol_review_2010_1288356157307.pdf and new-produc In downstream chemical process technology, we have developed and to exceed targeted rates of return in a sustainable manner. Besides the research and development several proprietary processes for recovering and processing a range formulation and testing work we do at Sasolburg throug Sasol obtains its raw materials through its coal-mining activities, of solvents, waxes and phenolics for the world market, as well Technology’s fuel research group, we conduct further fu These pages provide a concise overview of the business, the period and provide a range of financial and gas exploration, and purchases from the open market.our integrated business model oil and These pages provide an easy to follow description and future value such as innovation and research, asthe Sasolas steps Laboratory (SAFL) as 1-pentene, 1-hexene, 1-heptene, 1-octene and higher alpha research at well Advanced Fuels Exploration and productionarket overview including how it creates value, key market and business non-financial performance indicators, seeking to demonstrate Some raw materials are sold directly to external markets. graphical representation of the company’s business model, its coal-mining to respond to the Sasol obtains its raw materials through olefins, the last of which we convert intochanging business environment with some of Cape Town, and the activities, Safol™ H(C12,13) alcohols. Innovation We have developed and patented several base-metal catalysts collaboration with the University Research Application Centre (SFAC). SFAC enables us to conduct characteristics, external factors that affect value creation and financial value generated through responses to global linking together key inputs, activities and oil and gasoutcomes, drivers from the open market. exploration, and purchases of Exploration and production Some raw materials are sold directly to external markets. quantification in financial and non-financial terms.Besides the research and development and new-product for our FT synthesis processes. In downstream chemical process technology, we have developed and fuel research and tests in line with internatio engine the role of innovation. They describe key developments during market drivers. several proprietary processes for recovering and processing a range formulation and testing work we do at Sasolburg through Sa Sasol obtains its raw materials through its coal-mining activities, We have also been innovative in coal explorationwaxes and phenolics for the world market, as well of solvents, and mining, where Technology’s fuel research group, we conduct further fundamess are served through a variety of outlets ranging from big box oil and gas exploration, and purchases from the open market. Some raw materials are sold directly to external markets. as 1-pentene, 1-hexene, 1-heptene, 1-octene and higher alpha Sasol Mining (sometimes in partnership with technology suppliers) Safol™ H(C12,13) alcohols. olefins, the last of which we convert into We have developed and patented several base-metal catalysts research at the Sasol Advanced Fuels Laboratory (SAFL), in collaboration with the University of Cape Town, and the Saso Application Centre (SFAC). SFAC enables us to conduct sea- has developed high-extraction mining methods, advancedor chains such as The Home Depot, Walmart, B&Q and Leroy DDC (Dulux Decorator Centers) Paint Can Recycling – o for our FT synthesis processes. engine and fuel research and tests in line with international t directional drilling techniques, roof-boltinghave also been continuous-exploration and mining, where systems, innovative in coal Merlin (serving mainly homeowners) to independent dealers professional paint waste management systems We miner systems and a virtual-reality training system for continuous- with technology suppliers) Sasol Mining (sometimes in partnership (serving both homeowners and professionals) and company- o has developed high-extraction mining methods, advanced miner operators, among other cost-saving innovations. o the owned stores focused on serving professionals. directional drilling techniques, roof-bolting systems, continuous- miner systems and a virtual-reality training system for continuous- superior properties for the professional painter. miner operators, among other cost-saving innovations.elf Global market drivers and developments Concise overview of external context Clear description of business model seeking to link inputs and outputs o Eco-premium portfolio ts, o Recent initiatives:well as Sasol Mining suppliesPetroleum the Through Sasol Petroleum Through Sasol o Sasol Mining supplies most of the most ofs 2010 and home sales International (SPI) and Sasol Gas, feedstock coal we need for our Sasol Our GTL diesel has a higher quality than diesels derived from Markets professional paint International (SPI) and Sasol Gas, feedstock coal we natural gas throughSasol we obtain need for our Our GTL diesel has a higher quality than diesels derived from(70+ versus Markets crude oil. GTL diesel has a high cetane number tion petrochemical plants. Sasol markets products directly interior decoration we obtain natural gas through the cross-border pipeline linking petrochemical plants. Through Sasol Petroleum Sasol Mining suppliesoil. GTL diesel has a high cetane number (70+ versusthan five parts crude most of the the conventional 45 – 55), low sulphur (less to the consumer, as well as to the Pande and Temane fields in per million), low aromatics (less than 1%) and excellent the cross-border pipeline linking feedstocktocoal the needoffor oursustainable manner. low sulphur (less thanGTLve parts Sasol commercial and industrial cust markets products dir professional trimpaint International (SPI) andAs an integrated energy and chemicals company Sasol aims to meet stakeholders’ expectations Mozambique to our Secunda Sasol Gas, and exceed we conventional 45 – 55), cold-flow characteristics. Our fi diesel, therefore, is ideal targeted rates return in a Sasol Decorative paints market overview Key developments 2010 petrochemical per million), low aromatics (less than 1%)premium grade fuel and as a blend stock to theand downstream activities. as thereby integrating itswell consumer, as upstream the Pande and Temane fields in complex. We use this gas as our we obtain natural gas through plants. as a low-emissions, and excellent sole hydrocarbon feedstock at for upgrading conventional diesels. Our Decorative Paints business are served through a variety of outlets ranging from big box Mozambique to our Secunda Key figures in € millions Employees by region at year-end the cross-border pipeline linking business model Sasolburg and as a supplementary our integrated cold-flow characteristics. Our GTL diesel, therefore, is ideal commercial and industrial supplies a full range of interior chains such as The Home Depot, Walmart, B&Q and Leroy DDC (Dulux Decorator Centers) Paint Can Recycling – Signed a deal with Walmart to become the retailer’s Innovation Research and exterior decoration and Merlin (serving mainly homeowners) to independent dealers professional paint waste management systems wall paint. complex. We use this gas as our primary paint supplier in the US 2009 2010 2009 2010 feedstock to coal at Secunda. the Pande and Temane fields in Exploration and production as a low-emissions, premium grade fuel and as a blend stock In downstream chemical process technology, we have developed thereby integrating its upst Besides the research and development and new-product e is around s retailer’s (serving both homeowners and professionals) and company- Key figures in € millions sole hydrocarbon feedstock at by Employees region at year-end Dulux Trade won contract to paint the London 2012 Revenue 4,573 4,968 US and Canada 5,100 5,100 several proprietary processes for recovering and processing a range formulation and testing work we do at Sasolburg through Sasol protection products for both the owned stores focused on serving professionals. superior properties for the professional painter. Olympic Games site EBITDA 487 548 Latin America 1,700 1,800 Mozambique to our Secunda Sasol obtains its raw materials through its coal-mining activities, oil and gas exploration, and purchases from the open market. of solvents, waxes and phenolics for the world market, as well for upgrading conventional diesels. as 1-pentene, 1-hexene, 1-heptene, 1-octene and higher alpha and downstream activities Technology’s fuel research group, we conduct further fundamental research at the Sasol Advanced Fuels Laboratory (SAFL), in professional and do-it-yourself Global market drivers and developments Leading coatings supplier for the Commonwealth EBITDA margin (in %) EBIT 10.6 298 11.0 343 China Other Asian countries 1,200 2,000 1,500 2,200 Some raw materials are sold directly to external markets. olefins, the last of which we convert into Safol™ H(C12,13) alcohols. collaboration with the University of Cape Town, and the Sasol Fuels Key raw materials Price driversSasolburg and as a supplementary Eco-premium portfolio We have developed and patented several base-metal catalysts Application Centre (SFAC). SFAC enables us to conduct sea-level (DIY) markets, including paints, Games in India EBIT margin (in %) 6.5 6.9 The Netherlands 1,000 1,100 complex. We use this gas as our o for our FT synthesis processes. engine and fuel research and tests in line with international trends. Our proprietary Fischer-Tropsch Recent initiatives: lacquers and varnishes, as well as 2009 2010 2009 2010 Signed a landmark agreement with the Forest Operating income 133 275 Germany 1,600 1,300 and home sales We have also been innovative in coal exploration and mining, where products for surface preparation interior decoration professional paint feedstock to coal at Secunda. Stewardship Council Moving average ROI (in %) 4.7 5.2 Sweden UK 600 2,200 600 2,200 sole hydrocarbon feedstock at Sasol Mining (sometimes in partnership with technology suppliers) has developed high-extraction mining methods, advanced o Let’s Color campaign continued to gather momentumndon 2012 Drivers (pre-deco products). Other European countries 5,400 5,100 directional drilling techniques, roof-bolting systems, continuous- for buying decision professional trimpaint material prices more than 600 cities Presence in China increased to Revenue breakdown by business unit Other regions Total 1,100 21,900 1,100 22,000 Sasolburg and as a supplementary miner systems and a virtual-reality training system for continuous- miner operators, among other cost-saving innovations.acquers) for Retailers sizeandthe global market for decorative paints is around in % feedstock to coal at Secunda. Revenue 4,573 4,968 US and Canada 5,100 5,100 Market business characteristics wall paint. The of o €30 billion. Key raw materials Price drivers C Product: Eco-premium solutions o EBITDA 487 548 Latin America 1,700 1,800 % of revenue Through Sasol Petroleum Sasol Mining supplies most of the Our proprietary Fischer-Tropsch Architectural coatings Drivers for buying decision material prices International (SPI) and Sasol Gas, feedstock coal we need for our Sasol Our GTL diesel has a higher quality than diesels derived from Markets nwealth Interior and exterior wall paints and trim paints (lacquers) for Retailers 29 we obtain natural gas through crude oil. GTL diesel has a high cetane number (70+ versus petrochemical plants. consumers and professionals. A 22 the cross-border pipeline linking the conventional 45 – 55), low sulphur (less than five parts Sasol markets products directly EBITDA margin (in %) positions 10.6 11.0 China 1,200 1,500 B 15 15 the Pande and Temane fields in to the consumer, as well as to Market leadership per million), low aromatics (less than 1%) and excellent Woodcare and specialty products commercial and industrial customers, technology Market leadership positions Mozambique to our Secunda cold-flow characteristics. Our GTL diesel, therefore, is ideal Our proprietary Fischer-Tropsch 2007 2008 2009 2010 complex. We use this gas as our as a low-emissions, premium grade fuel and as a blend stock thereby integrating its upstream and decoration Trade customers Europe Geo-mix revenue by destination EBIT Europe 298 343 Other Asian countries 2,000 2,200 sole hydrocarbon feedstock at for upgrading conventional diesels. and downstream activities. 1st Continental Europe Trade customers Key value chains with carbon Sasolburg and as a supplementary other critical building materials. Northern and Eastern Europe A Decorative Paints Europe 52 footprint assessment feedstock to coal at Secunda.orest UK, Ireland and South Africa B Decorative Paints Americas 31 Pre-deco products Fillers, wall treatments, sealants and putties for consumers and professionals. Innovations EBIT margin (in Continental Europe 1st Americas %) 6.5 6.9 The Netherlands C Decorative Paints Asia 17 1,000 1,100 o 20% 108 Our proprietary Fischer-Tropsch 1st Canada 7% Northern and Eastern Europe 42% 17% Consumer market Operating income 133 275 Germany 1,600 1,300 2nd United States North America Emerging Europe Building adhesives Asia Pacific 32 Latin America Mature Europe paint with energy-saving properties 2009 2010 used in the building and renovation industry Asia UK, Ireland and South Africa the air to create a safer home environment Moving average ROI (in %) 1st South East Asia and Pacific 4.7 5.2 Sweden 600 Total reportable rate of injuries 600 momentum Greenhouse gas (GHG) emissions Our global emissions of GHG, which have been independently verified, Water New energy parquet layers, interior decorators and painters 3% 2nd India and South Asia per million hours Rest of the world increased from 71,3 million tons (Mt) in 2009 to 75,8 Mt in 2010, consumers China and North Asia Americas UK 2,200 2,200 specialized retailers. 11% Support professional painters with tailor-made 5.7 4.9 4.7 Coal is an important part of the world’s energy mix, and Sasol will continue to mainly due to the inclusion of Oryx GTL emissions data. However, our Various technological advancements in effluent Sasol New Energy Holdings (SNE) was created to focus on new technology Latin America 4.0 Innovations technologies that can be integrated with our core technologies Customers products and services produce transportation fuels from coal and gas. However, we are committed recycling, cooling, pre-treatment of water emissions intensity improved to 3,05 (measured as carbon dioxiden 600 citiesConsumer market technology Our end-users can broadly be segmented into homeown- 1st Canada to reduce our GHG footprint. As part of our commitment to reduce ers (either DIY or BIY – buy it yourself), professional paint- ers serving homeowners and commercial contractors. They programs for painters Other European countries 2007 5,4002008 2009 2010 5,100 to substantially reducing our carbon emissions by, among others, developing more efficient production processes and investigating carbon capture and equivalent per ton of production) in 2010. This compares with 3,24 in 2009 and 3,02 (restated) in 2008. The improved overall GHG intensity for steam generation and solids handling are paving the way for significantly improved production of carbon dioxide in our operations and integrate new 2nd United States storage (CSS) solutions. We have set several targets to reduce our greenhouse is a result of the inclusion of Oryx GTL, and Sasol Polymers and Sasol zero liquid effluent discharge designs, which technology into our FT processes, SNE will look into renewable | | Latin America Other regions | 1,100 | 1,100 and lower-carbon energy options such as solar, biofuels and biomass, technology 52 AkzoNobel Decorative Paints Business performance AkzoNobel Report 2010 AkzoNobel Report 2010 Business performance AkzoNobel Decorative Paints 53 gas emissions intensity by 15% (on the 2005 baseline) in all our operations by Synfuels significantly increasing production volumes, which offset are being developed irrespective of water as well as nuclear, hydro and natural gas. paint with energy-saving properties 2020, and we have spent R100 million (US$11,1 million) in Greenhouse gas (GHG) emissions 2009 on energy availability or New energy pricing. Revenue breakdown by business unit the emissions increase. The targets 71,3 million tons (Mt)for beento 75,8 operations we have set in 2009 our Mt in 2010, ed, Our global emissions of GHG, which have all independently verifi Water Total 21,900 22,000 increased from efficiency-related projects, which should achieve a reduction of an important part of the world’s energy mix, and Sasol will continue desire to be a the inclusion of Oryx GTL emissions butHowever, our Coal is around reflect not only our to mainly due to responsible company, data. also Various technological advancements in effluent Sasol New Energy Holdings (SNE) was created to focus on new produce transportation fuels from coal and gas. However, we are committed emissions intensity improved to 3,05 (measured as carbon dioxide recycling, cooling, pre-treatment of water technologies that can be integrated with our core technologies Asia 760 000 tons of GHG emissions a year. to substantially reducing our carbon emissions by, among others, developing strong businessof production) in 2010. This compares with 3,24 in our awareness that a equivalent per ton case exists for sustainable Key developments 2010 to reduce our GHG footprint. As part of our commitment to reduce in % for steam generation and solids handling are more efficient production processes and investigating carbon capture and paving the way for significantly improved production of carbon dioxide in our operations and integrate new development. 2009 and 3,02 (restated) in 2008. The improved overall GHG intensity the air to create a safer home environment storage (CSS) solutions. We have set several targets to reduce our greenhouse is a result of the inclusion of Oryx GTL, and Sasol Polymers and Sasol zero liquid effluent discharge designs, which technology into our FT processes, SNE will look into renewable 1st South East Asia and Pacific gas emissions intensity by 15% (on the 2005 baseline) in all our operations by 2020, and we have spent R100 million (US$11,1 million) in 2009 on energy Synfuels significantly increasing production volumes, which offset the emissions increase. The targets we have set for all our operations are being developed irrespective of water availability or pricing. and lower-carbon energy options such as solar, biofuels and biomass, as well as nuclear, hydro and natural gas. efficiency-related projects, which should achieve a reduction of around reflect not only our desire to be a responsible company, but also 2nd India and South Asia 760 000 tons of GHG emissions a year. our awareness that a strong business case exists for sustainable development. China and North Asia 4 annual review 2010 • our business • our integrated bus Support professional painters with tailor-made C Greenhouse gas (GHG) emissions solutions Product: Eco-premium Our global emissions of GHG, which have been independently verified, 4 Water New energy 5 annual review 2010 • our business • our integrated business model Key figures in € millions Employees by region at year-end million tons (Mt) in 2009 to 75,8 Mt in 2010, increased from 71,3 products and services Coal is an important revenueworld’s energy mix, and Sasol will continue to % of part of the mainly due to the inclusion of Oryx GTL emissions data. However, our Various technological advancements in effluent Sasol New Energy Holdings (SNE) was created to focus on new homeown- Signed a deal with Walmart to become the retailer’s 2009 2010 2010 Greenhouse gas (GHG) emissions Our global emissions of GHG, which have been independently verified,can be integrated with our core technologies Wat technologies that produce transportation fuels from coal and gas. However, we are committed emissions2009 intensity improved to 3,05 (measured as carbon dioxide recycling, cooling, pre-treatment of water increased from 71,3 million tons (Mt) in 2009 to 75,8 Mt in 2010, GHG footprint. As part of our commitment to reduce ional paint- primary paint supplier in the US programs for painters to substantially reducing our carbon emissions by, among others, developing to reduce our equivalent per ton of production) in 2010. This compares with 3,24 in world’s energy mix, and Sasol will continue to for steam generation and solids handling are emissions data. However, our 29 Coal is an important part of the mainly due to the inclusion of Oryx GTL production of carbon dioxide in our operations and integrate newVariou ctors. They Dulux Trade won contract to paint the London 2012 more efficient production processes and investigating 4,968 capture and Revenue 4,573 carbon US and Canada 2009 and 3,02 (restated) in 2008. The produce transportation intensity coal and gas. However, we are committed paving the way for significantly improved 5,100 5,100 improved overall GHG fuels from emissions intensity improved to 3,05 (measured as carbon dioxide our FT processes, SNE will look into renewable recyc A EBITDA 487 22 storage (CSS) solutions. We have set several targets to reduce our greenhouse 548 Latin America is a result of the inclusion 1,800 GTL, and Sasol Polymers andour carbon emissions by, among others, developing zero liquid effluent discharge designs, which 1,700 of Oryx to substantially reducing Sasol technology into for st Olympic Games site equivalent per ton of production) in 2010. This compareslower-carbon energy options such as solar, biofuels and biomass, and with 3,24 in B gas emissions intensity15 15% (on the 2005 baseline) in all our operations by by 15 10.6 Synfuels significantly increasing production efficient production processes and investigating carbon capture and more volumes, which offset are being developed irrespective of water 2009 and 3,02 (restated) in 2008. The improved overallwell asintensity hydro and natural gas. as GHG nuclear, pavinbel Report 2010 2020, and we have spent R100 million (US$11,1 million) in 2009China EBITDA margin (in %) 11.0 on energy 1,200 1,500 the emissions increase. The targets westorage (CSS)all our operations set several targets to reduce our greenhouse availability or pricing. inclusion of Oryx GTL, and Sasol Polymers and Sasol have set for solutions. We have Leading coatings supplier for the Commonwealth is a result of the zero l efficiency-related projects, which should achieve a reduction of around Asian countries ect not only our desire2,200 a responsible company, but also 15% (on the 2005 baseline) in all our operations by EBIT 298 343 Other refl 2,000 to be gas emissions intensity by are be Games in India Synfuels significantly increasing production volumes, which offset 760 000EBIT margin (in %) tons of GHG 2007 emissions a year. 2008 6.5 20096.9 The Netherlands our awareness that a strong business case exists we have spent R100 million (US$11,1 million) in 2009 on energy 2010 1,000 1,100 2020, and for sustainable availa the emissions increase. The targets we have set for all our operations Signed a landmark agreement with the Forest Operating income 133 275 Germany development. 1,600 1,300 efficiency-related projects, which should achieve a reduction of around reflect not only our desire to be a responsible company, but also Stewardship Council Moving average ROI (in %) 4.7 5.2 Sweden 600 600 760 000 tons of GHG emissions a year. our awareness that a strong business case exists for sustainable UK 2,200 2,200 development. Let’s Color campaign continued to gather momentum A Decorative Paints Europe 52 Key value chains with carbon Other European countries 5,400 5,100 4 annual review 2010 • our business • our integrated Presence in China increased to more than 600 cities footprint assessment Other regions 1,100 1,100 B Decorative Paints Americas 31Revenue breakdown by business unit Total 21,900 22,000 4 in % Succinct summary of key developments C Decorative Paints Asia 17 between revenue generation and Link Discussion of material issues that arise as a result of business activities, Identification of strategic responses to changing response to market drivers highlighted including targets and costs business environment 108 7% C Product: Eco-premium solutions 17% Emerging Europe % of revenue Asia Pacific 32 16 www.theiirc.org 29 Towards Integrated Reporting 17 2009 2010 A 22 B 15 15
    • Towards Integrated Reporting – Innovation in Action (continued)BHP Billiton 2010 Annual Report pp 152 – 153 http://www.bhpbilliton.com/home/investors/reports/Documents/bhpBillitonAnnualReport2010.pdf Anglo American Annual Report 2010 pp 14 – 15 http://www.angloamerican.com/investors/reports/2011rep 14 Anglo American plc — Annual Report 2010 15These pages show the linkage between key financial and performance, and includes quantification of remuneration They pages give a snapshot of performance. They are OPERATING AND FINANCIAL REVIEW: Key performance indicators and non-financial. They explain how KPIs are calculated andnon-financial drivers of strategy, remuneration policy and practices and the alignment between remuneration and structured so that the reader can easily see the link between include quantification of past results and targets for the future.6 Remuneration Report is reinforced through discussionremuneration practice. Thiscontinued company performance. key strategic objectives and performance, both financialof the linkages between remuneration and both risk and MEASURING OUR PERFORMANCE We measure performance again 6 Remuneration Report continued6.2.2 Strategic alignment elements of our strategy throug KEY INDICATORSthe Remuneration Committee recognises that we operate in a global environment and that our performance depends on the quality 6.2.2 Strategic alignmentof our people. Remuneration is recognises that we operate in a global environment and that our performancethe committee keeps the remuneration policy the Remuneration Committee used to reinforce the Group’s strategic objectives, and depends on the qualityunder regular people. Remuneration isit is appropriateGroup’s strategic objectives, and the committee keeps the remuneration policy of our review to ensure used to reinforce the for the needs of the Group. and improvement measures. under regular review to ensure it is appropriate for the needs of the Group.the diagramdiagram below illustrateshowBHP Billiton’s remuneration policy is linked to the is linked toof our strategy and how theof our strategy and how the the below illustrates how BHP Billiton’s remuneration policy six key drivers the six key driversremuneration structures for executives (including the members of the support and reinforcesupport and reinforce these linkages. remuneration structures for executives (including the members of the GMC) serve to GMC) serve to these linkages. Explanation and quantification of STRATEGIC ELEMENTS KPI TARGETS Explicit link made between strategic RESULTS AND TARGETS NON-FINANCIAL FINANCIAL alignment between remuneration and aims and KPI targets Investing NON-FINANCIAL PEOPLE LICENCE WORLD-CLASS FINANCIAL PROJECT PIPELINE FINANCIALOPTIONS GROWTH strategic objectives, both 14 financial and Anglo American plc — Annual Report 2010 15 Anglo American plc — Annual Report 2010 OPERATING AND FINANCIAL REVIEW: Key performance indicators TO OPERATE ASSETS STRENGTH AND non-financial In world class assets in the Total shareholder return (TSR) Capital projects and investment Page 16 Return on capital employed Drivers of strategy DISCIPLINE most attractive commodities Share price growth plus dividends reinvested over Optimise the pipeline of projects and ensure that (ROCE) PEOPLE The foundation LICENCE We depend on MaintainingWORLD-CLASS Balancing FINANCIAL Focus on PROJECT Looking beyond PIPELINE GROWTH OPTIONS the performance period. A performance period of three new capital is only committed to projects that 2010 of our business TO OPERATE key safety and high-quality ASSETS financial flexibility STRENGTH AND delivering an the project Drivers of strategy is our people. environmental assets and with the cost enhanced resource pipeline to years is used and TSR is calculated annually deliver the best value to the Group on a risk 24.8% Talented and imperatives and managing them in of finance in DISCIPLINE endowment to pursue new adjusted net present value basis motivated people on our ability the most effective effective capital underpin future growth options. The foundation We depend on Maintaining Balancing Focus on Looking beyond 2009 MEASURING OUR PERFORMANCE are our most to operate within and efficient way. management generations of our business precious resource.� is our people. keyCode of and our safety Business Conduct. environmental assets and high-quality programs. financial flexibility of growth. with the cost delivering an enhanced resource the project pipeline to Return on capital employed (ROCE) Total operating profit before impairments for the year We measure performance against the four strategic Underlying earnings per share Underlying earnings are net profit attributable to 14.4% Talented and imperatives and managing them in of finance in endowment to pursue new 14 divided by the average total capital less other elements ofAnglo Americanadjusted forReport 2010 of Group-wide targets our strategy through 15 equity shareholders, plc — Annual the effect KEY INDICATORS motivated people on our ability the most effective effective capital underpin future growth options. investments and adjusted for impairments OPERATING AND FINANCIAL REVIEW: Key performance indicators special items and remeasurements and any and improvement measures. remuneration policy We provide are our most rewards competitive Remuneration Remuneration frameworks reward to operate within achievement of demanding financial frameworks reward and efficient way. Consistent with our long-term strategic management measures are linked focus, performance generations related tax and non-controlling interests Supported by preciousattract, motivate to strong Code of our performance performance targets, driving superior programs. growth. ThisRisk alignment to long-term 6.2.3 rewards growth. of 6.2.4 Performance alignment 14 Anglo American plc — Annual Report 2010 15 Anglo American plc — Annual Report 2010 and retain highly in the areas results across the Group. executives for delivering sustainable resource.� executives skilled Business Conduct. of health, safety, the global financial crisis has heightened the focus on risk returns and avoiding excessive risks. While the Board recognises that market forces necessarily Organising OPERATING AND FINANCIAL REVIEW: Key performance indicators 6 Remuneration Report continued willing to work environment management within organisations, and in particular on influence remuneration practices, it strongly believes that MEASURING OUR PERFORMANCE We measure performance against (AO) four st Asset optimisation the around the world. and community remuneration frameworks that work to ensure executives take the fundamental driver behind our remuneration structure is 6.2.2 Strategic alignment development. a long-term approach to decision-making – minimising activities forces necessarily performance. Accordingly, while target remuneration 6.2.3 Risk alignment 6.2.4 Performance alignment business Efficiently and effectively Asset optimisation (AO) Supply chain Page 20 MEASURING OUR PERFORMANCE Sustainable operating profit benefit OperatingWe measure performancebenefitsthethe strategic profit and capital spend against to four 2009 $749 million the Remuneration Committee recognises that we operate in a global environment and that our performance depends on the quality the global financial crisis has heightened the focus on risk While the Board recognises that market that focus only onorganisations, and in results at the expense of longer it strongly believes that management within short-term particular on is structured to attract and retain executives, the amount elements of our strategy through Group-wide Overview of our people. Remuneration is used to reinforce the Group’s strategic objectives, and the committee keeps the remuneration policy influence remuneration practices, KEY INDICATORS remuneration policy We provide Remuneration Remuneration frameworks reward under regular review to ensure it is appropriate for the needs of the Group. a long-term approach to decision-makingour long-term strategic Consistent with – minimising remuneration frameworks that work to ensure executives take STRATEGIC ELEMENTS the fundamental driver behind our remuneration structure is term business growth and success. activities business performance. Accordingly, while target remuneration actually received is dependent on the of remuneration KPI TARGETS from optimised performance of the asset RESULTSof our strategy through Group-wide targets elements AND TARGETS Group resulting from centralised procurement 2010 $1,548 million KEY INDICATORS the diagram below illustrates how BHP Billiton’s remuneration policy is linked to the six key drivers of our strategy and how the • The LTIP operates over athat focus onlygrowthperformance measures structured to attract and retain executives, the amount long-term horizon. results at the expense of longer achievement of superior business and individual performance and improvement measures.billion by 2011(1) on short-term is competitive • GMCrewards frameworks reward • STI outcomes for to support andof demanding financial achievement remuneration • 15% of STI for (including the members of the GMC) serve the GMC are weighted base salaries structures for executives reinforce these linkages. focus, Committee has considered are ways in whichis dependent on the the Remuneration and success. the linked base of the core businesses from coreand improvement measures. businesses Supported by term business of remuneration actually received Target $1 risk management is reflected throughout BHP Billiton’s sustained shareholder value. Investing sustained shareholder value. and on generating are aligned with GMC members is towards achievement of challenging Performance Shares are the Remunerationa tested over Committee has considered the ways in which achievement of superior business and individual performance to attract, motivate comparable strong performance measured against performance targets, driving superior financial KPIs linking remuneration to the and on generating reward five-year performance period. for long-term satisfied that it reinforces rewards to growth. This risk management is reflected throughout BHP Billiton’s reward results across the Group. • The LTIP links a significant desired behaviours. this is largely achievedis satisfied that it reinforces structure for allexecutives, andfor delivering sustainable executives, and through the structure all is and retain highly roles in global inhealth, safety, the areas NON-FINANCIAL performance of BHP Billiton’s assets and FINANCIAL executives Short-term performance indicators and outcomes Short-term performance indicators and outcomes Operating and financial review the componentStI and LtI rewards, the desiredapproach to of remuneration foris largely achieved through themeasures is set fortheseIn world class assets in the Group’s behaviours. this which comprise An individual scorecard of each executive Total shareholder return (TSR) Operating Capital projects and investment Page 16 Return on capital employed Underlying earnings per share Capital projects and investment skilled executivesof companies ofenvironment health, safety, PEOPLE LICENCE WORLD-CLASScapital management programs: FINANCIAL PROJECT PIPELINE GROWTH OPTIONS a significant portion and avoiding excessive risks. of pay for executives to the deliveryreturns StI and LtI rewards, at the commencement of each financial year. individual scorecard of measures is the GMC. An scorecards Group’s approach toStI rewards is deferred for a two-year which believes will drive and non-financial measures At the attractive commodities set for each executive comprise BHP Billiton’s performance. that the STRATEGIC ELEMENTS KPI TARGETS RESULTS AND TARGETS at the commencement of each financial year. these price growth plus dividends reinvested over most Share scorecards Optimise the pipeline of projects and ensure that (ROCE) A summary of the Group’s capital a similar size and community TO OPERATE ASSETS STRENGTH AND include the key financial – Profit AfterDISCIPLINE Tax (adjusted for foreign Drivers of strategy of superior returns. the equity component of willing toand complexity. work environment development exchange, price and exceptional items) beyond a significant Board period, and portion underremuneration for the conclusion of the financial year, each individual’s achievement performance of the LtIP is measured over a GMC. Investing the performance period. A performance period of sustainably capital isworld classcommitted toshareholder return (TSR) Safely, three new onlyWork related fatal injury projects that Total water use 2010 employed Underlying earnings per share Capital projects and investment Page 24 2010 projects related fatal injurybe found Work and investments can The foundation We depend on Maintaining Balancing Focus on Looking – Executives only derivefive-year period. the actual rewards received by members of value from against their measures is assessed by the Remuneration the key financial and non-financial measures that the around the world. for Base salaries of our business and community measures. key safety and high-quality financial flexibility delivering an and Earnings Before Interestresource Tax – to enhanced and the project include In assets in the Total Capital projects and investment Page 16 Return on capital their LTIP awards where BHPtherefore reflect the of StI rewards share the GMC Billiton Group’s performance and STRATEGIC value to the Share price growth plus most ELEMENTS KPI TARGETS RESULTS AND frequencyto 19 (FIFR) TARGETS is our people. environmental assets and with the cost pipeline Committee and Board and their cash StI reward is determined. the equity component is deferredmatched with an allocation of Deferred Shares orbelieves will drive BHP Billiton’s performance. At the and TSR is calculated annually responsibly deliver the bestattractive commodities Group on period.dividends reinvested over three Optimise the pipeline of projectsprojects thatthat water use includes only water used for this is for a two-year years is used and frequency rate (FIFR) the performance a risk and ensure Total (ROCE) A summary of the Group’s capital on pages 18 rate Boardwill 24.8% $4.13 Talented and imperatives and managing them in of finance in endowment to pursue new other executives the most effective 50% weighting. 25% to effective capital price over an extended period. Options A performance period of new capital is only committed to 2010 projects and investments can be found development. • The Group’s motivated people on our ability underpin future growth options. performs strongly relative to comparator period, addition, StI and LtI outcomes are not driven by a LtIP is measured over a (unless they leave the Group of the financial year, each individual’s achievement In and performance under the (or a combination of the two), to which the individual conclusion 2010 adjusted net present value basis FIFR is calculated as the number of fatal injuries to basis primary activities are market are our most to operate within and efficient way. management generations years is used and TSR is calculated annually deliver the best value to the Group on a risk 24.8% on pages 18 to 19 – Capital management (cost and schedule) $4.13 2009 20 fatalities, 0.010 FIFR Enacted through remuneration structures performance Conduct. precious our Code of programs. of growth. companies in growing formulaic approach. the Remuneration Committee applies its TSR. not have access for two years competitive within resource.� Business 10% to 15% weighting. five-year period.LtIP, and determiningrewards received byspecific circumstances). a qualitative judgement to actual StI rewards and to the may determine that rewards not under members of against their measures is assessed by the Remuneration Investing adjusted net present value Total shareholder return (TSR) each geography, in the areas of – Full vesting under the LTIP only occurs vesting under the the GMCoutperforms reflect the committee determines the relationship between StI rewards and the performance where BHP Billiton’s TSRprovided in circumstances where the Group’s performance over theshareyears indicates the success of and Board and their cash StI reward is determined. be therefore of the Group and past five employeesReturncontractors (ROCE)200,000 Underlying earnings per shareattributable to or on capital employed per hours worked 2009 2009 14.4% 2009 Please refer to the Remuneration Total shareholder return (TSR) 2010 14 fatalities, 0.008 FIFR health, safety, Committee In world class assets in per Total operating profit before impairments for the year (TSR) earnings are net profitthe effectCorporate socialand investment Total shareholder return Underlying $2.14 2009 Page 16 pages 98 to 109 Return on capital employed the Remuneration report on Remuneration frameworksperformance against our long-term strategic • ‘On target’ reward Consistent with the KPIs Return or Options employed (ROCE) on capital Underlying earnings the sharethe average total capital less other Capital projects investment Please refer to fatal incidentsearnings p Underlying 14.4% and equitable it to be inappropriate or would provide unintended outcomes. price over an extended period. remuneration policy Target Zero We provide Remuneration our remuneration strategy in aligning executive rewards with divided by equity shareholders, adjusted for of environment reward competitive rewards frameworks achievement of demanding financial focus, performance measures are linked the index TSR by morethe Remuneration Committee does not apply any discretion to than 30% over this is matched with an allocation of Deferred Shares shareholder interests (as shown in the graphs below). Further delivers a cash STI reward of 80% of base frequency rate performance period of three Optimise the pipeline of projectsprojects thatthat Underlying earnings are net profit attributable to plus dividends reinvested over most attractive commodities investments and adjusted forgrowth Share price impairments as defined and ensure (ROCE) $2.14 Supported by across the Group. special items and remeasurements and any • GMC base salaries and retain highly of in the areas • 15% strong performance performance targets,• STI outcomes forgrowth.the GMC areaweighted In addition, The LTIP operates over a driven byoverGroup’s Attributablecan be found inaEarnings and communityfor to attract, motivate STI driving superior results across the Group. executives for to long-term This rewards delivering sustainable five-year period. • StI and LtI outcomes are not long-termthe past five years Profit and Basicsection 3 allow vesting when performance hurdles have not been satisfied. per Share a horizon. details of the Total operating profit before impairments for the year (or combination of the two), to which the individual will Lost time injuryperformance period. A(LTIFR) and non-controlling interests Social investment committed toby the London related tax report on pages 98 to 109 • Further rewards willing development skilled executives of health, safety, salary. The maximum cash award of 160% returns and avoiding excessive risks. the new capital is only 2010 2010 GMC members is is rarely awarded, and is only available of challenging Shareholding Requirement the Remuneration Committee applies descriptions of these terms).access for two years (unless they leave the Group average total capital less other divided by the equity shareholders, adjusted foryearseffectinjuries (LTIs) per 200,000 the time of TSR is calculated annually The number of lost is used and Benchmarking Group includes donations, gifts in Governance are aligned with to work environment towards achievement • The Minimum formulaic approach. Performance Shares are testedAnnual Report (including of this over a not have deliver the best value to the Group on a risk Lost time injury are available impacts STI community around the world. and was increased in July 2010 to STI reward for GMC members measured against where all non-financial KPIs linking remuneration tobase salaryvsfor the judgementperformance period. Earnings perfor GMC members financial and financial Average 300% of under specific circumstances). investments and adjusted for impairments Organising special items andand effectivelyworked.optimisation (AO)an occupationalSupply chainwhich Efficiently remeasurements and any hours Asset An LTI is injury kind and staff 20 24.8% $4.13 adjusted Page present value optimisation (AO) community net time forAsset basis administering development. comparable to executives outcomes for targets are fully achieved. annual gross the a qualitativefive-year to determining StI rewards and to Profit Attributable to Shareholders (excluding exceptional items) CEO and Average STI reward vs Basic Share Supply chain frequency rate (LTIFR) roles in for performance global all executives. STI for health, GMC members is safety, towards achievement ofperformance ofShares are tested over a vesting under the LtIP, and may determine that rewards not the relationship between StI rewards and the performance related tax and non-controlling interests of theto perform his/her duties forprocurement Sustainable operating profit benefit renders the person unable asset Operating profit and capital spend benefits to the 2009 $749 million programmes and volunteering in company timemillion 2009 $445 million Performance BHP Billiton’s assets and 2009 300 100 2009 0.76 16 100 • GMC base salaries • 15% of • STI outcomes for the GMC are weighted • The LTIP operates over a long-term horizon. 200% for other GMC members to ensure from optimised performance Group resulting from centralised be providedThe LTIP links90awhere the committee determines 14 • in circumstances significant component 2010 $1,548 million 2010 $713 Basic EPS – excluding exceptional items (US cents per share) • Cash STI rewards are matchedperformanceaward by an period. 2009 are aligned with challenging against all at risk of the Group over the past five years indicates the success of base of the core businesses capital employed (ROCE) Return on Underlying earningsTarget $1 billion by 2011 per share Profit attributable – excluding exceptional items (US$B) 90 from core businesses • The Remuneration executives and shareholders interests one full shift orTotal operating profit before injury was for the year and is shownearnings are net profit profit before tax more the day after the impairments as percentage of attributable to 14.4% Target $1 billion by 2011 companies of of rolesenvironment performance of BHP Billiton’s assets and management for of BHP Billiton equity, which is deferred programs: capital • Thepay forlinks a significant component comparable measured against financial KPIs linking remuneration to the five-year (1) (2) Average STI reward (as of % of maximum award) 2010 0.57 250 Average STI reward (as % of maximum award) components in global health, safety, remain aligned. it to be inappropriate or executives tounintended outcomes. of pay for would provide the delivery $2.14 LTIP 80 80 Committee has companies of environment capital management programs: of executives to the delivery 12 our remuneration strategy in aligning executive rewards with Underlying a similar size remuneration. and complexity. community and a similar size an overriding and community development two years providing an appropriate(adjusted for foreign exchange, price and exceptional items) of superior returns. focus – Profit After Taxderive value from • Executives are prohibited from of superior returns. not apply any discretion to – Profit After Tax (adjusted for foreign – Executives only and Earnings Before Interest and Tax –time frame,awards where BHP Billiton the Remuneration Committee does 70 200 70 Organising 60 shareholder interests (as shown in the graphs below). Further Operating incurred, whether a scheduled workday or not other divided by the average total capital less equity shareholders, adjusted for the effect ofEnergy consumption Target Zero incidents – The at risk Base salaries for measures. on the longer-term their LTIP even in 10 60 investments and adjusted for impairments only water used forEnterprise developmentrate (FIFR) any 2009 102.1 million GJ total Safely, sustainably Work related fatal injury Total water use Page 24 Work related fatal injury Corporate social investment and complexity. development otherdiscretion The Group’s executives • to – Capital management (cost exchange, price and exceptional any unvested equity and any regard to annual STI rewards. strongly relativeTSR.comparator hedging items) 25% to 50% weighting. allow vesting when performance hurdles have not been satisfied. 50 details of the Group’s Attributable Profit and Basic Earnings – Executives only derive value from special items and remeasurements and Financial statements and responsibly frequency rate (FIFR) Total water use includes frequency the ultimate goal of zero performs to 2009 $82.5 million, 1.9% of (3)(4) components are market and schedule) 8 50 150 Enacted through remuneration structures competitive within incentive of reduce performance companies in growing its FIFR is calculated as the number of fatal injuries to primary activities Supply chain Energy consumptionper 200,000 hours worked Corporate social investment Number Asset optimisation (AO) relatedof companies supported and 2010 energymillion GJ totalchain 2009 20 fatalities, 0.010 FIFR used profit before tax Base salaries for serve the dual each measures. safety, in the areas 10% to 15% weighting. and EarningsTSR by more than 30%Interest and Tax Before over – Full vesting under the LTIP only occurs shares that are – as part of the held 40 40 per Share over the past five years can be found in section 3 Efficiently and effectively Asset optimisation (AO) employees or contractors Page 20 tax and non-controlling interestsFIFR Supply Minimum Shareholding Requirement. LTIP awards where BHP Billiton their geography, 6 2010 14 fatalities, 0.008 100.7 2010 $111 million, outcomes health, harm remains where BHP Billiton’s TSR outperforms 100 • ‘On target’ performance against the KPIs of this Annual Report (including descriptions of these terms). and equitable Operating profit and capital spend injury frequencyto the 200,000 are measureddefined bydonations, gifts in Improvements inofenergy efficiency number of jobs sustained by fatal incidents companies Target A 15% intensity reduction purpose of: environment the index 30 30 Target Zero energy used 1.3% of profit before tax other executives – incentivising across the Group. to reflect and community • The Group’s • Further rewards development salary. The maximum cash award of 160%to 50% weighting. 25% • Thefive-year period. Requirement delivers a cash STI reward of 80% of base a Minimum Shareholding 4 performs strongly relative to comparator 20 20 Sustainable operating profit benefit Lost time benefits rate (LTIFR) The number lost time injuries (LTIs) per Social investment as Benchmarking Group includes the London 2009 $749 million Lost time injury 2009 $445 million below-target STI is rarely awarded, and is only available 50 Enterprise development Group resulting from centralised the person unableoccupational injury duties for kind and staffand volunteering in company supported by Anglo American(LTIFR) Organising from a 2004 baselineis an frequency rate enterprise by 2014 are market rewarding are available impacts targets are fully achieved. Capital management (cost and schedule) – was increased in July 2010 to 300% of 2 from optimised performance of the asset procurement his/her which hours worked. An LTI time for administering community 2010 $1,548 0.76 million 2010 $713 million supported: Enacted through remuneration structures where all non-financial and financial 10 and performance to executives outcomes for for performance or all executives. safety annual gross base salary for the CEO and 10 companies in growing its TSR.2006 2007 2008 2009 2010 0 Average STI reward for GMC members 2009 Businesses Average STI reward for GMC members renders to perform programmes time 2009 GHG emissions 3,720 fromEfficiently and effectively one full shift or morescheduled workday or not(AO) and is shown as percentage of profit beforedevelopment initiatives 0.57 incidents – (1) 2009 19 MtTarget Page 20 Jobs sustained: (2) 200% for other GMC members to ensure competitive within 0 base of the core businesses core businesses 0 0 executives for against all at risk of BHP Billiton equity, which10%for is deferred to 15% weighting. • Cash STI rewards are matched by an award the day after the injury was tax environmental of Supply chain $1 billion by 2011 Target 2010 20 Mt CO equivalent $1 billion by 2011 Asset optimisation (AO) • The Remuneration executives and shareholders interests vs Profit Attributable to 2009 2010 under the LTIP only occurs Shareholders (excluding exceptional items) vs Basic Earnings per Share 2010 CO equivalent in the areas has (4) – Full vesting 2006 2007 2008 Ore Reserves and Mineral Resources components of incurred, whether a optimisation Asset Supply chain 2 Committee remain aligned. exceptional Target Zero 12,982 Greenhouse gas (GHG) emissions Enterprise development remuneration. two years providing an appropriate focus each geography, performance. to an overriding Profit attributable to shareholders (excluding exceptional items) Basic Earnings per Share 2 on the longer-term time frame, even in • Executives are prohibited from Sustainable operating profit benefit of companies supported and Operating profit and capital spend benefits to the by 2014 The at risk 2010 Businesses supported: health, safety, where BHP Billiton’s TSR outperforms the ultimate goal of zero Target A 10% intensity reduction 2009 $749 million 2009 $445 million Average STI reward for GMC members Average STI reward for GMC members performance; components discretion reduce incentive regard to annual STI rewards. hedging any unvested equity and any 16 100 300 100 Energy consumption Number 9,392 and equitable • ‘On target’ performance against the KPIs Reduction Improvementsemissionsperformance of the of by Anglo American enterprise in CO2 inoptimised are measured of production isby companies from energy efficiency per unit harm remains shares that are held as part of the serve the dual number jobs sustained Basic EPS – excluding exceptional items (US cents per share) and environment purpose of: outcomes Minimum Shareholding Requirement. the index TSR by more than 30% over from a 2004 baseline asset supported Group resulting from centralised procurement water use Jobs sustained: 2010 $1,548 million 2010 $713 million Operating to reflect Profit attributable – excluding exceptional items (US$B) – incentivising 90 90 Total 17,200 – promoting delivers a cash STI reward of 80% of base 14 measured from a 2004 baseline base of the core businesses development initiatives from core businesses below-target across the Group. Target $1 billion by 2011(1) Target $1 billion by 20 Average STI reward (as of % of maximum award) and rewarding 2009 125.3 million m (4) 3 safety or Target Businesses supported: and community a five-year period. 80 250 Greenhouse gas (GHG) emissions Average STI reward (as % of maximum award) retention and executives for environmental 2010 115.2 million m 3 3,500 rewarding exceptional performance. salary. The maximum cash award of 160% 12 80 Reduction in CO2 emissions per unit of production is Target Under revision Jobs sustained: Work related fatal injury Total water use Page 24 Work related fatal injury Energy consumption Safely, sustainably Corporate social investment performance; • Further rewards development and • The Minimum Shareholding Requirement measured from a 2004 baseline 18,000 loyalty. is rarely awarded, and is only available TotalOperating includes only water used for – promoting 70 70 are available impacts STI retention and rewarding frequency rate (FIFR) water use was increased in July 2010 to 300% of frequency rate (FIFR) and responsibly 2009(3)(4) 102.1 million GJ total 200 2009 $82.5 million, 1.9% of loyalty. where all non-financial and financial 10 Employing to executives outcomes for 60 FIFR is calculated as the number of fatal injuries to Employing primary activitiespeople 60 Safely, sustainably annual gross base salary for the CEO and Voluntary labour related fatal injury Work turnover 2009use 20 fatalities, 0.010 FIFR Total water32 Page 24used energy diversity Work related fatal injury profit before tax consumption Energy Other information targets are fully achieved. 50 employees or contractors per 200,000 hours worked The best and responsibly frequency rate (FIFR) Voluntary HIV counselling Page Voluntary labour turnover Voluntary HIV counselling Total water use includes only water0.008 FIFR 82% 2010 used for and testing (VCT) Gender frequency rate (FIFR) $111 million, (3)(4) 102.1 million GJ for performance all executives. 8 150 50 200% for other GMC members to ensure Number of permanent employee resignations as a percentage of total permanent employees and testing (VCT) Percentage of employees in southern Africa 2010 14 fatalities, 2009 6.8% 2010 5.3% 2009 100.7 million managers 2009 19% female GJ total 12% females, 2010 2009 against all at risk • Cash STI rewards are matched by an award The best people Corporate social investment FIFR is calculated as the number of fatal injuries HIV tests withVoluntary HIV counselling VoluntaryGender diversityturnover labour undertaking voluntary annual to primary activities 2010 94% Target Zero fatal incidents Target 95% VCT in high disease 2010 14 females, 32 2009 Page energy used managers Voluntary labour turnover used 20 fatalities, 0.010 FIFR of profit before tax 1.3% energy • The Remuneration 40 executives and shareholders interests 40 compulsory counselling support employees or contractors per 200,000 as worked and testing (VCT) hours 21% female 2010 14 fatalities, 0.008 FIFR 2010 100.7 million G components of of BHP Billiton equity, which is deferred for 6 100 Lost time injury frequency rate (LTIFR) Social investment Number ofemployed by the Group employee resignations permanent as defined by the London Percentage of women and female managers Corporate social investment Target A 15% intensity reduction Zero fatal incidents6.8% burden countries (100% is 2009 Committee has remain aligned. the long term goal) Target energy used Benchmarking Group includes donations, gifts in employees(LTIFR) a percentage of total permanent Percentage oftime injury in southern Africa employees by the London 30 remuneration. two years providing an appropriate focus 4 The number of lost time injuries (LTIs) per 200,000 30 Lost time injury frequency rate Lost Social investment as defined by 2014 2010 5.3% Target Enterprise development A 15% intensity an overriding • Executives are prohibited from 20 hours worked. An LTI is an occupational injury which kind and staff time for administering community time injuries (LTIs) per 200,000 undertaking voluntary annual HIV tests with The at risk on the longer-term time frame, even in 20 50 The number of lost Benchmarking Grouprate (LTIFR) frequency includes donations, gifts in 2009 Lost time injury Businesses supported: by 2014 discretion to hedging any unvested equity and any renders the person unable to perform his/her duties for programmes and volunteering in hours worked. An LTI is an occupational injury which compulsory counselling support community Gender diversity company time kind and staff time0.76 for administering frequency rate (LTIFR) 3,720 regard to annual STI rewards. 2009 GHG emissions $1 bn of sustainable operating profit benefit from core businesses by the end of 2011. The 2009 figure was revised since the publication of the 2009 Annual Report after amendments in accounting methodologies. 2 (1) (3) components reduce incentive 152 | BHP BILLItON ANNUAL REPORt 2010 10 10 BHP BILLItON ANNUAL REPORt 2010 | 153 (2) $1 bn of operating profit and capital spend benefits from core businesses by the end of 2011. It includes operations that have since become independently managed. 6.2.3 Risk alignment are held as0part of the 6.2.4 Performance 0alignment or more the day after the injury was Includes businesses since divested. and is shown as percentage of of renders the person unable to perform his/her duties for programmes and volunteering in company time (4) serve the dual shares that one full shift Percentage profit before tax women and female managers 2010 0.57 2009(4) 19 Mt CO2 equivalent 2009 0.76 GHG emissions Jobs sustained:(4) outcomes 0 0 one full shift or more the day after the injury was and is shown as percentage of profit before tax 2010 0.57 2009 19 Mt CO2 equiv purpose of: to reflect 2006 Minimum Shareholding Requirement. the global financial crisis has heightened the focus on risk 2007 2008 2009 2010 2006 2007 the 2009 recognises thatwhether a scheduled workday or not While 2008 Board2010 incurred, market forces necessarily employed by the Group incurred, whether a scheduled workday or not Target Zero incidents – 2010 20 Mt CO2 equivalent Target Zero incidents – 12,982 2010 20 Mt CO equ – incentivising management within organisations, and in particular on influence remuneration practices, it strongly believes that Enterprise development Enterprise development 2 below-target Profit attributable to shareholders (excluding exceptional items) Basic Earnings per Share the ultimate goal of zero Target A 10% intensity reduction the ultimate goal Businesses supported: intensity 2010 of zero Target A 10% and rewarding Average STI reward for GMC members Average STI reward for GMC members Energy consumption Number of companies supportedEnergy consumption and Number of companies supported and safety or remuneration frameworks that work to ensure executives take the fundamental driver Improvements in energy efficiency are measured behind our remuneration structure is harm remains by 2014 harm remains 9,392 by 2014 152 | BHP BILLItON ANNUAL REPORt 2010 executives for number of jobs sustained by companies Improvements in energy efficiency are measured number of jobs sustained by companies environmental a long-term approach to decision-making – minimising activities business performance. Accordingly,baseline from a 2004 while target remuneration supported by Anglo American enterprise baselinefrom a 2004 supported by Anglo American enterprise Jobs sustained: that focus only on short-term results at the expenseQuantified demonstration of alignment executives, the amount Total water use Total water use exceptional performance. of longer is structured to attract and retain development initiatives 17,200 2009(4) 125.3 million m3 development initiatives of sustainableGreenhousebenefit(GHG) emissions the end of 2011. performance; between remuneration and actually received is dependent on the of remuneration company $1 bn operating profit gas from core businesses by 2009(4) 125.3 million m3 The 2009 figure was revised since the publication of the (1) (3) term business growth and success. Greenhouse gas (GHG) emissions $1 bn of operating profit and capital spendemissions per unit of production is of 2011. Target Businesseshave since115.2 million m It includes operations that supported: independ 2010 Reduction in CO2 benefits from core businesses by the end become (2) and 2010 115.2 million m 3 3,500 performance achievement of superiorReduction in COindividual performance business and 2 emissions per unit of production is Includes businesses since divested. Under revision Target (4) the Remuneration Committee has considered the ways in which measured from a 2004 baseline – promoting and on generating sustained shareholder value. Target Under revision Jobs sustained: risk management is reflected throughout BHP Billiton’s reward measured from a 2004 baseline retention and 18,000 rewarding structure for all executives, and is satisfied that it reinforces Short-term performance indicators and outcomes Employing loyalty. the desired behaviours. this is largely achieved through the Group’s approach to StI and LtI rewards, which comprise Employingindividual scorecard of measures is set for each executive An The best people Voluntary labour turnover Voluntary HIV counselling Page 32 Voluntary labour turnover Voluntary HIV counsel a significant portion of remuneration for the GMC. at the commencement of each financial year. these scorecards Number of permanent employee resignations as and testing (VCT) 2009 6.8% and testing (VCT) The best people the key financial and non-financial measures that the include Voluntary labour turnover Voluntary HIV counselling a percentage of total permanent employees 32 Page Percentage of employees in southern Africa Voluntary labour turnover Voluntary HIV counselling 2010 5.3% Gender diversity 2009 82% the equity component of StI rewards is deferred for a two-year Number of permanent employee resignations as Board believes will drive BHP Billiton’s performance. At the and testing (VCT) Gender diversity undertaking voluntary annual HIV tests with 2009 6.8% compulsory counselling support and testing (VCT) Quantification of past and12% females, 94%2009 present2010 period, and performance under the LtIP is measured over a a percentage ofindividual’s achievement total permanent employees Percentage of employees in southern Africa women and female managers Target 95% VCT in hig conclusion of the financial year, each Percentage of 2010 5.3% 2009 82% performance data and future targets 19% female managers countrie burden five-year period. the actual rewards received by members of against their measures is assessed by the Remuneration undertaking voluntary annual HIV tests with the Group employed by 2010 94% 2010 14 females, the long term g the GMC therefore reflect the Group’s performance and share Explanation isan extended period. discussion Committee and Board and their diversity reward is determined. Gender cash StI compulsory counselling support Target 95% VCT in high disease 21% female managers price over reinforced through this is matched with anPercentage of women and femaleor Options allocation of Deferred Shares managers burden countries (100% is of link with risk StI and LtI outcomes are not driven by a employed by the Group In addition, and performance (or a combination of the two), to which the individual will the long term goal) not have access for two years (unless they leave the Group Includes an array of non-financial $1 bn of sustainable operating profit benefit from core businesses by the end of 2011. The 2009 figure was revised since the publication of the 2009 Annual Report after amendment (1) (3) formulaic approach. the Remuneration Committee applies $1 bn of operating profit and capital spend benefits from core businesses by the end of 2011. It includes operations that have since become independently managed. (2) a qualitative judgement to determining StI rewards and to under specific circumstances). as well as financial KPIs Includes businesses since divested. (4) vesting under the LtIP, and may determine that rewards not BHP BILLItON ANNUAL REPORt 2010 | 153 the relationship between StI rewards and the performance be provided in circumstances where the committee determines of the Group over the past bn of operating profit and capital spend benefits from core businessesendthe2011.of 2011. five years indicates the success of $1 bn of sustainable operating profit benefit from core businesses by the of The 2009 figure was revised since the publication of the 2009 Annual Report after amendments in accounting methodologies. (1) (3) $1 by end It includes operations that have since become independently managed. (2) it to be inappropriate or would provide unintended outcomes. our remuneration strategy in aligning executive rewards with Includes businesses since divested. (4)18 www.theiirc.org the Remuneration Committee does not apply any discretion to shareholder interests (as shown in the graphs below). Further Towards Integrated Reporting 19 allow vesting when performance hurdles have not been satisfied. details of the Group’s Attributable Profit and Basic Earnings152 | BHP BILLItON ANNUAL REPORt 2010 per Share over the past five years can be found in section 3 of this Annual Report (including descriptions of these terms).
    • WHAT WILL INTEGRATED Key points in this section The main benefits and challenges of Integrated Reporting are presented here from theREPORTING MEAN FOR ME? following perspectives: • reporting organizations; • investors; • policy-makers, regulators and standard-setters; and“Integrated Reporting and transparency is not only the right thing to do, but it has brought • other stakeholders.with it a broad range of business benefits, ranging from richer access to capital markets and identification of cost savings to an increase in employee engagement.” Lord Sharman of Redlynch, Chairman, AvivaBenefits and ChallengesThe implications of Integrated Reporting will vary for different participants in the reporting supply chain depicted in the diagram Reporting Organization Perspectivebelow. This section of the Discussion Paper outlines the main benefits and challenges with respect to Integrated Reporting for Benefits Directors’ duties – The fiduciary and other duties ofreporting organizations, investors, policy-makers, regulators and standard-setters, and other stakeholders. The benefits of Integrated those charged with governance are not consistent across allReporting set out in this section are equally relevant to other key stakeholders such as customers, suppliers and governments who are Although Integrated Reporting is an emerging practice, a jurisdictions. Consequently, the focus of an Integratedincreasingly demanding demonstration of a more integrated picture of performance as a prerequisite for doing business. number of benefits have been identified in research to date, Report may differ, in particular in relation to the users as summarized below:9 to whom the Integrated Report is addressed. Policy-makers, Regulators and Standard-setters Assurance Providers • reported information better aligned with investor needs; Directors’ liability – Because the scope of Integrated • more accurate non-financial information available for Reporting will cover new and evolving subjects, with a greater data vendors; focus on the future, concerns about the liability of those charged • higher levels of trust with key stakeholders; with governance will need to be addressed. This might be through the adoption of globally accepted and harmonized • better resource allocation decisions, including cost reductions; “safe harbours” or a broad business judgement rule. Reporting Organizations Reporting Investors • enhanced risk management; • better identification of opportunities; Commercial confidentiality – Organizations will need to provide a more strategic focus and, in some cases, information • greater engagement with investors and other stakeholders, not currently subject to mandatory disclosure requirements in Other Users including current and prospective employees which their Integrated Reports. They will, therefore, need to balance improves attraction and retention of skills; the benefits mentioned above with the desire to avoid disclosing • lower reputational risk; competitive information. • lower cost of, and better access to, capital because of Capacity building – Building knowledge and experience improved disclosure; and Alternative pathways to Integrated Reporting across the reporting system will be essential to long-term success. • development of a common language and greater The IIRC Pilot Programme (see page 24 for more details) will While the IIRC anticipates that an Integrated Report will • Publishing a concise, standalone, Integrated Report as collaboration across different functions within help to build this capacity, with the learning captured and ultimately become the primary report for all organizations, the only addition to a statutorily required annual report the organization. disseminated by the IIRC for all to access. An online forum individual organizations will follow different routes over or regulatory filing. This may be particularly attractive will also be created to encourage knowledge sharing. different timeframes towards that end. All organizations will for organizations not currently producing a separate Challenges be bound by existing regulatory reporting requirements until sustainability report that their stakeholders have come Information systems – Organizations will need to Regulation – Many components of Integrated Reporting are these are changed, but this will affect them in different ways to expect. establish or strengthen information systems for capturing the subject of existing local regulations which vary between depending on the jurisdiction(s) and industry(ies) in which • Modifying the sustainability report or, to the extent and aggregating information. jurisdictions. Progress towards Integrated Reporting is, therefore, they operate. Alternative routes that organizations may follow permitted given the organization’s regulatory likely to evolve at different speeds in different countries. Organizations that are interested in experimenting include the following. environment, the management commentary by tailoring International consensus on the direction taken will be important, with Integrated Reporting over the next two years • Combining the sustainability report with the management it in accordance with the Guiding Principles and Content in particular for organizations operating across jurisdictions. are invited to join the IIRC Pilot Programme – see commentary or the full annual report. While a combined Elements of Integrated Reporting. page 24 for more details. report is not an Integrated Report, it can be a logical • Adopting Integrated Reporting internally to underpin first step for some organizations as they explore management information. This will provide business opportunities to integrate the content of the two reports benefits while liaising with regulators either to introduce into a more concise form and build understanding of Integrated Reporting for all organizations or to introduce how performance in one area drives value in another. “safe harbours” for those who choose to innovate and experiment. Q9. From your perspective as a reporting organization: (a) Do you agree with the main benefits as presented in the Discussion Paper? Why/why not? (b) Do you agree with the main challenges as presented in the Discussion Paper? Why/why not?20 www.theiirc.org Towards Integrated Reporting 21
    • What Will Integrated Reporting Mean for Me? (continued) Investor Perspective Policy-maker, Regulator and Standard-setter PerspectiveBenefits an organization’s long-term value. Benefits • Stewardship of common resources – Because of the • Improved analysis – Analysts, both sell-side and buy- broader perspective required by Integrated Reporting, both• Fiduciary duty – The provision of a more integrated • More effective capital allocation – The more in terms of the resources and relationships that it takes into information set will help those who invest on behalf of side, will have access to an organization’s most significant meaningful communication brought about through information in one concise and integrated form, with the account and the longer timeframe over which value creation others, such as pension funds, to discharge their fiduciary Integrated Reporting will support more effective capital is considered, it leaves organizations better placed to act, and duty by taking into account the full range of issues that opportunity to “drill down” to more detailed information allocation across the economy generally and, to the extent where necessary. This can streamline the analytical process be more accountable, as stewards of the community’s common affect organizational, and therefore financial, success that Integrated Reporting supports capital flowing to those resources, in particular human, natural and social capital. and investment returns. and help analysts to incorporate a wider set of KPIs and organizations that are responding most effectively to future other factors into their analysis. challenges, can encourage the investment necessary to • Access to information – Integrated Reporting,• Future orientation and outlook – Integrated by providing decision-relevant information, can support Reporting puts greater emphasis on information about • More effective decisions, better investment respond to issues such as energy security, food scarcity and returns and more effective capital allocation – climate change. effective action by policy-makers and regulators as users the future. This will assist investors in assessing the of that information. organization’s ability to generate future cash flows. Collectively, the above benefits will result in more effective • Harmonization of approaches and reduced “red investment decisions, better long-term investment returns tape” – Reporting is shaped by a patchwork of laws, Challenges• Risks and opportunities – Integrated Reports disclose and more effective capital allocation. key risks and opportunities as management views them. regulations, standards, codes, guidance and stock • Revising legislation, regulation and This will enable investors to assess the short-, medium- and Challenges exchange listing requirements, described in a recent standards – Mechanisms for revising legislation, long-term impact of these risks and opportunities across their report as “a jigsaw in pieces”.10 Integrated Reporting • Revised analytical techniques – Analytical tools that regulation and standards require leadership, political investment portfolio. offers a platform for policy-makers, regulators and incorporate a wide range of financial and non-financial factors will, coordination, time, resources, consultation and due standard-setters, working together, to:• Comparability – Integrated Reporting provides a are evolving. The IIRC Pilot Programme will work with investors process. This is particularly so where proposed changes platform to help enhance sector-specific reporting models – integrate reporting requirements within a jurisdiction; involve more than one subject area (e.g., environmental to develop disclosures relevant for investment analysis. and to bring together information from different forms of – harmonize advances in reporting that have been law and securities law), and more than one jurisdiction. • Investment supply chain – Many of the current reporting. This assists improved sectoral and geographical achieved in different jurisdictions; and • Liability and business confidentiality – The scope of compensation and incentive structures along the investment analysis and comparison of issues such as business ethics, – approach new reporting issues on a consistent basis Integrated Reporting will cover new and evolving subjects supply chain drive a focus on the short term. A wide range management of conflicts of interests, and bribery and corruption as they emerge across jurisdictions. and will have a more strategic focus. The resulting concerns of steps are being taken by regulatory and non-regulatory where they are relevant and material to the organization. of management, those charged with governance and actors to rebalance this focus. Integrated Reporting can • Economic and market stability – The recent global• Connected information – Integrated Reporting makes support these efforts by taking into account the whole financial crisis has made it clear that risks can develop, be assurance providers about liability, fiduciary duties and clearer the linkages between the organization’s strategy, spectrum of factors that impact an organization’s success harboured and be transmitted through market participants business confidentiality will need to be addressed. governance and financial performance and the social, and, therefore, its long-term investment returns. and practices that fall outside the traditionally prudentially environmental and economic context within which it regulated institutions. One important tool in addressing Investors interested in developing integrated operates. It also better aligns externally reported information these risks is greater transparency of market participants, disclosures relevant for investment analysis are with information that management uses for decision which Integrated Reporting can facilitate. This, linked with invited to join the IIRC Pilot Programme – see page making. This enables investors to assess more effectively the the better internal decision making and behaviours that 24 for more details. combined impact of the diverse factors that materially affect Integrated Reporting encourages, as well as the longer- term perspectives that it enables, may well deliver lower volatility in markets. Moreover, it permits policy-makers and regulators to identify such risks as they emerge so that they can be dealt with in a timely way, thus adding to greater economic and market stability. Q9. From your perspective as an investor: (a) Do you agree with the main benefits as presented in the Discussion Paper? Why/why not? Q9. From your perspective as a policy-maker, regulator or standard-setter: (b) Do you agree with the main challenges as presented in the Discussion Paper? (a) Do you agree with the main benefits as presented in the Discussion Paper? Why/why not? Why/why not? (c) Do you agree that Integrated Reporting will drive the disclosure of information (b) Do you agree with the main challenges as presented in the Discussion Paper? that is useful for integrated analysis? Why/why not? Why/why not?22 www.theiirc.org Towards Integrated Reporting 23
    • What Will Integrated Reporting Mean for Me? (continued) FUTURE DIRECTION Key points in this section Other Perspectives • The development of Integrated Reporting will require a change in established thinking about decision making and reporting. • Actions that the IIRC is planning include:Civil Society to gain a better understanding of how their performance – developing an Exposure Draft of the Framework;• Alignment of sustainable issues – Organizations that links to the objectives of the organization and to identify – working with others on emerging measurement and reporting practices; adopt Integrated Reporting will display their stewardship how they contribute to the ability of the organization to create and sustain value over time. – outreach, encouraging organizations to adopt and contribute to the evolution of Integrated Reporting; not only of financial capital, but also of human, natural, social and other capitals, which is likely to align with the – exploring opportunities for harmonizing reporting requirements within and across jurisdictions; and Assurance providers interests of many civil society interest groups. – consultation regarding the ongoing governance of Integrated Reporting. • Independent assurance – The independent audit of• Stakeholder engagement – Integrated Reporting’s financial statements currently plays a critical role in the emphasis on stakeholder engagement is likely to result in world’s capital markets, and independent assurance of greater consultation with civil society interest groups. sustainability reports is recognized as best practice. It is• Supply chain – Integrated Reporting will provide greater therefore reasonable to expect that when an Integrated visibility of how an organization impacts on the stakeholder Report is an organization’s primary report, investors and groups across its supply chain. other stakeholders will want that report to The development of Integrated Reporting is designed to – additional research conducted by the IIRC and others; and be subject to independent assurance. enhance and consolidate existing reporting practices. Through – ongoing engagement with investors and other key• Focus on specific issues – The integration of collaboration, consultation and experimentation, the IIRC plans to environmental and social issues with financial issues could • New techniques – Some information in an Integrated stakeholders. move towards a reporting framework that provides the information result in a reduction in focus on some issues of concern to Report may be more difficult to assure than information It is anticipated that an Exposure Draft of an International needed to assess organizational value in the 21st century. particular civil society interest groups. The IIRC is engaging disclosed under traditional reporting frameworks. This will Integrated Reporting Framework will be published for with key civil society interest groups and will utilize existing require the development of new techniques, standards There will be a period of transition. comment in 2012. The intention is to ensure that the guidelines, codes, etc. throughout the development of and reporting mechanisms to support assurance on Framework has the scope and flexibility to support the future • Some jurisdictions will introduce Integrated Reporting development of reporting for several decades, recognizing the Framework. Integrated Reports. requirements ahead of others. This is the case in South that it will need to be revised periodically to continue toEmployees Academics Africa for example, where the Johannesburg Stock meet the evolving needs of the market and society.• Future prospects – Current and prospective employees Exchange has introduced a listing requirement for • Research – As researchers, academics will have a strong companies to prepare, or publicly explain why they • Measurement and reporting practices – Monitor will be able to gain an integrated perspective on the future role to play in the development of the initial Framework prospects of their employer. They will also be better able to have not prepared, an Integrated Report. and, where appropriate, contribute to or potentially lead and in researching emerging topics as Integrated Reporting development of emerging measurement and reporting discern whether their employer’s values are consistent with evolves over time. • In other jurisdictions, organizations will experiment their own. with Integrated Reporting within the existing reporting practices relevant to Integrated Reporting. This may • Education – As educators, academics will have a strong requirements. A number of organizations have already include the development of techniques to enable those• Connecting the organization – Integrated reporting role to play in education and capacity building across areas of business impact and interdependence that are facilitates the breaking down of reporting silos and the released Integrated Reports in this context. The IIRC Pilot the reporting system, which will be essential to Integrated Programme will facilitate further experimentation. currently treated as externalities to be better quantified and introduction of integrated thinking. This allows employees Reporting’s long-term success. integrated into decisions and reporting – whether as risks Developing an effective Framework and supporting mechanisms and opportunities or as part of performance statements. will require a collaborative effort from all those involved in the reporting system. The IIRC is seeking to encourage and facilitate • Outreach – Conduct regional roundtables and other that collaboration. Actions that the IIRC is currently planning engagement and communication activities to raise awareness The IIRC Pilot Programme relate to the following. of Integrated Reporting among investors and other key stakeholders, and to encourage organizations to adopt and The IIRC is conducting a two-year Pilot Programme, commencing in October 2011, to test and further develop the International • Pilot Programme – Run a two-year Pilot Programme, contribute to the evolution of Integrated Reporting. Integrated Reporting Framework. Working as a network of peer-group organizations and investors with whom knowledge can be commencing in October 2011 to test the proposals set out • Harmonization – Explore with national, regional and exchanged and experiences shared, the IIRC Pilot Programme aims to: in this Discussion Paper and provide practical examples global policy-makers, regulators and standard-setters, of Integrated Reporting. Companies, investors and others opportunities for harmonizing reporting requirements within • encourage organizations to innovate in their reporting practices; participating in the IIRC Pilot Programme will provide a key and across jurisdictions, and help to develop a compatible • inform the future evolution of reporting and investor practices; and contribution to the Framework’s development over the next regulatory landscape. • drive convergence in international reporting guidance. two years (see page 24 for more details). • Governance – Develop, through public consultation, • Framework – Develop the International Integrated institutional arrangements for the ongoing governance For more details and to express interest in participating, see www.theiirc.org/pilot Reporting Framework on the basis of: of Integrated Reporting. – responses received to this Discussion Paper; – the insights emerging from the IIRC Pilot Programme; Q9. From your perspective as a key stakeholder: Q10. (a) Do you agree that the actions listed in the Discussion Paper should be the next steps undertaken (a) Do you agree with the main benefits as presented in the Discussion Paper? by the IIRC? Why/why not? Are there other significant actions that should be added? Why/why not? (b) What priority should be afforded to each action? Why? (b) Do you agree with the main challenges as presented in the Discussion Paper? Why/why not? Q11. Do you have any other comments that you would like the IIRC to consider?24 www.theiirc.org Towards Integrated Reporting 25
    • SUMMARY OF CONSULTATION ABOVE ALL, INTEGRATED REPORTINGQUESTIONS IS ABOUT GOOD BUSINESSThe IIRC welcomes comments on all aspects of the Discussion Guiding Principles (page 13) “In Tata Group the core belief is what we do must benefit society and this is why we support the development ofPaper from all stakeholders, whether to express agreement Integrated Reporting. Sustainability must be in your DNA.”or to recommend changes. Your answers to the Consultation Q7. Do the Guiding Principles identified in the DiscussionQuestions, and any other comments you would like to make, Paper provide a sound foundation for preparing an Ishaat Hussain, Finance Director, Tata Sons Limitedshould be submitted to dpresponses@theiirc.org or online at Integrated Report – are they collectively appropriate;www.theiirc.org. For the purpose of analysis, you are asked to is each individually appropriate; and are there other “Managing pension assets means that we have a responsibility towards millions of people to ensure they receiveidentify the organization to which you belong and where it is Guiding Principles that should be added? Why/why not? decent pensions; we therefore need to generate decent returns in a responsible manner over the long term. Integratedlocated. All comments received will be considered a matter of Content Elements (page 14) Reporting helps us get the full picture of a company’s performance and make sound investment decisions.”public record and will be posted on www.theiirc.org. Commentsshould be submitted by Wednesday 14th December 2011. Q8. Do the Content Elements identified in the Discussion Paper Professor Angelien Kemna, Chief Investment Officer, APG and provide a sound foundation for preparing an Integrated Chief Executive Officer, APG Asset ManagementThe World has Changed – Reporting Must Too (page 4) Report – are they collectively appropriate; is eachQ1. (a) Do you believe that action is needed to help improve individually appropriate; and are there other Content “The case for globally consistent financial reporting standards is well understood and accepted. It is appropriate to how organizations represent their value-creation Elements that should be added? Why/why not? apply the same global approach to other aspects of corporate reporting. This initiative represents an important step process? Why/why not? What Will Integrated Reporting Mean for Me? (Reporting on that journey.” (b) Do you agree that this action should be international organizations – page 21, Investors – page 22, Policy- Hans Hoogervorst, Chairman, International Accounting Standards Board in scope? Why/why not? makers, regulators and standard-setters – page 23, Other perspectives – page 24) “It is about time that we stopped printing together financial and sustainability reports without any visible and concreteTowards Integrated Reporting (page 6) Q9. From your perspective: links between them.”Q2. Do you agree with the definition of Integrated Reporting (a) Do you agree with the main benefits as presented Professor Nelson Carvalho, Universidade de São Paolo on page 6? Why/why not? in the Discussion Paper? Why/why not?An International Integrated Reporting Framework (page 8) “If you are a company committed to the long term, and one of your ambitions is to be trusted, you have no choice – (b) Do you agree with the main challenges as presented Integrated Reporting is the way to communicate.”Q3. Do you support the development of an International in the Discussion Paper? Why/why not? Integrated Reporting Framework? Why/why not? Jim Singh, Chief Financial Officer, Nestlé (c) Do you agree that Integrated Reporting will driveQ4. (a) Do you agree that the initial focus of Integrated the disclosure of information that is useful for Reporting should be on reporting by larger companies “The goal of the IIRC is not to increase the reporting burden on companies and other entities. Rather, it is to help them integrated analysis (from the perspective of investors)? and on the needs of their investors? Why/why not? and all their stakeholders make better resource allocation decisions. All of us have a stake in a sustainable society.” Why/why not? (b) Do you agree that the concepts underlying Integrated Göran Tidström, President, International Federation of Accountants Future Direction (page 25) Reporting will be equally applicable to small and medium enterprises, the public sector and not-for-profit Q10. (a) Do you agree that the actions listed in the Discussion “Integrated Reporting builds on the practice of financial reporting, and environmental, social and governance reporting. organizations? Paper should be the next steps undertaken by the It equips companies to manage their operations, brand and reputation strategically and to manage better any risks that IIRC? Why/why not? Are there other significant may compromise the long-term sustainability of the business.”Business Model and Value Creation (page 10) actions that should be added? Professor Mervyn King, Deputy Chairman, IIRC and Chairman, GRIQ5. Are: (a) the organization’s business model; and (b) its (b) What priority should be afforded to each action? ability to create and sustain value in the short, medium Why? and long term, appropriate as central themes for the future direction of reporting? Why/why not? Q11. Do you have any other comments that you would like the IIRC to consider?Q6. Do you find the concept of multiple capitals helpful in explaining how an organization creates and sustains value? Why/why not?26 www.theiirc.org Towards Integrated Reporting 27
    • ACKNOWLEDGEMENTSAND ENDNOTESIIRC members Roberto Pedote, Senior Vice President of Financial Claudia Kruse, Head of Sustainability and John Paluszek, Chair, Global Alliance for Public Robert H. Herz, Former Chairman, Financial Endnotes and Legal Affairs, Natura Governance, APG and Chair, ICGN Integrated Relations and Communication Management Accounting Standards Board (former member ofSir Michael Peat, Principal Private Secretary to TRH 1 Ocean Tomo (2010), “Ocean Tomo’s Russell Picot, Group Chief Accounting Officer, Business Reporting Committee Sallie Pilot, Director of Research & Strategy, the IIRC)The Prince of Wales and The Duchess of Cornwall Intangible Asset Market Value Study”(Chairman) HSBC Bob Laux, Director, Accounting and Reporting, Black Sun Donald Hill, Design Director, Black Sun 2 Management commentary is also known as James H. Quigley, Senior Partner, Deloitte LLP Microsoft Peter Proestakes, Assistant Director, Financial Britt Keay, Account Manager, Black SunProfessor Mervyn King, Chairman, King Committee management discussion and analysis, businesson Corporate Governance and Chairman, Global René Ricol, General Commissioner for Public Jerome Lavigne-Delville, Special Advisor, UN Accounting Standards Board Mitsuru Komiyama, Former Executive Board review and narrative reportingReporting Initiative (Deputy Chairman) Investment (France) Global Compact Office Nick Ridehalgh, Senior Director, KPMG Sydney Member, The Japanese Institute of Certified Public 3 Sustainability reporting is also known as tripleHelen Brand, Chief Executive, ACCA Atsushi Saito, President & CEO, Tokyo Stock Ernst Ligteringen, Chief Executive, Global Tom Rotherham, Associate Director, Hermes Equity Accountants (former member of the Working bottom line reporting, environmental, social Exchange Group, Inc Reporting Initiative Ownership Services (EOS) Group) and governance (ESG) reporting, corporateProfessor Nelson Carvalho, Universidade de SãoPaulo, Brazil and Chairman, 25th Session of Steve Maslin, Partner, Grant Thornton Richard Reid, London Chairman, KPMG (former responsibility reporting and corporate social Rick Samans, Managing Director, WEF and Neil Stevenson, Brand Executive Director, ACCAUNCTAD’s ISAR member of the Working Group) responsibility reporting Chairman, Climate Disclosure Standards Board Dr. Robert Kinloch Massie, Senior Fellow, Initiative Alan Willis, Independent Standards AdvisorPaul Clements-Hunt, Head of Unit, UNEP Finance for Responsible Investment, Kennedy School of Victoria Scott, Research Analyst, Black Sun 4 See, for example, Boston College Carroll Maria Helena Santana, Chairman of the Executive Government, Harvard University School of Management (2008), “The UseInitiative Committee of the International Organization of Secretariat Takayuki Sumita, Chairperson, World Intellectual of Non-Financial Information: What DoAron Cramer, President and CEO, Business for Securities Commissions David Matthews, Partner, KPMG Jessica Fries, Director, The Prince’s Accounting Capital Initiative (WICI) Investors Want?”, Arnold, V., Bedard,Social Responsibility Leslie Seidman, Chairman, Financial Accounting Dr Anthony Miller, Accounting and Corporate for Sustainability Project (A4S) and Director, Sir David Tweedie, Former Chairman of the C., Phillips, J. and Sutton, S. (2009),Robert Eccles, Professor of Management Practice, Standards Board Governance Programme, UNCTAD PricewaterhouseCoopers International Accounting Standards Board “Understanding Professional and Non-Harvard Business School Jim Singh, Chief Financial Officer, Nestlé Dr Jeanne Ng, Director, Group Environmental Lisa French, Director Reporting Framework, Global (former member of the IIRC) Professional Investors’ InformationGerald Edwards, Senior Advisor on Accounting Affairs, CLP Holdings Limited Reporting Initiative Requirements”, Financial Services Council Björn Stigson, President, World Business Council In addition, the IIRC would like to thank the manyand Auditing Policy, Financial Stability Board and The Australian Council of Superannuation for Sustainable Development David Phillips, Partner, PricewaterhouseCoopers Superna Khosla, Head of Communications hundreds of people around the world who have(Observer) Investors (2011), “ESG Reporting Guide Göran Tidström, President, International Federation Janet Ranganathan, Vice President for Science and and Engagement, A4S and Senior Manager contributed to the development of Integrated for Australian Companies – Building TheJohn Elkington, Founding Partner & Executive of Accountants Research, WRI PricewaterhouseCoopers Reporting and this Discussion Paper through Foundation For Meaningful Reporting”,Chairman, Volans Mike Krzus, President, Mike Krzus Consulting participation in meetings, roundtables, seminars, Charles Tilley, Chief Executive, CIMA Professor Roger Simnett, Associate Dean, Haigh, M. and Shapiro, M.A. (2011), online discussion and other eventsDr Wolfgang Engshuber, President, Corporate Research, University of New South Wales Mariko Mishiro, Research Fellow, World “Financial Institutions: taking greenhouse Jim Turley, Chairman and Chief Executive Officer,Centers, Munich Re America and UNPRI Intellectual Capital Initiative (WICI) gases into account” produced by the Climate Ernst & Young Susanne Stormer, Vice President, Global TripleTim Flynn, Chairman, KPMG International Disclosure Standards Board for the Department Doug Webb, 100 Group of Finance Directors Bottom Line Management, Novo Nordisk Charlotte Masiello-Riome, Communications for Environment, Food and Rural Affairs, UKHans Hoogervorst, Chairman of the International Alan Teixeira, Director of Technical Activities, Strategy Advisor, A4S Christy Wood, Chair, International Corporate 5 UN Global Compact-Accenture (2010),Accounting Standards Board (from July 2011) International Accounting Standards Board Michael Nugent, Senior Technical Manager, Governance Network (ICGN) “A New Era of Sustainability, UN GlobalIshaat Hussain, Chief Financial Officer, Tata Graham Terry, Strategy & Thought Leadership, International Federation of Accountants Li Yong, Vice Minister of the Ministry of Finance, Compact-Accenture CEO Study 2010”Michael Izza, ICAEW Chief Executive and Global P.R. China and President of CICPA (from July SAICA Senior Executive, South African Institute Dr. Jeremy Osborn, Project Manager, CIMA 6 Bloomberg (2010), “The Sustainability Edge,Accounting Alliance 2011) of Chartered Accountants Mike Reid, Project Manager, A4S and Manager, Sustainability Report 2010”Professor Angelien Kemna, Chief Investment Dr Steve Waygood, Head of Sustainability Grant Thornton 7 See, for example, Financial Reporting ReviewOfficer, APG and Chief Executive Officer, APG Working Group members Research and Engagement, Aviva Investors Beth A. Schneider, Director, Deloitte & Touche LLP Panel and Accounting Standards BoardAsset Management Paul Druckman, Executive Board Chairman, Yuki Yasui, Deputy Head, UNEP Finance Initiative (2011), “Cutting the Clutter. Combating clutter Bethan Walker, Communications Officer, A4SThomas Kusterer, Chief Financial Officer, EnBW The Prince’s Accounting for Sustainability Project in an annual report” (Co-Chairman) Additional Task Force and Advisory Joris Wiemer, Senior Coordinator – ExternalEnergie Baden-Württemberg AG 8 These sources include White, A.L (2010), Relations, Global Reporting InitiativeHuguette Labelle, Chair, Transparency International Ian Ball, Chief Executive Officer, International Group members “The Five Capitals of Integrated Reporting – Federation of Accountants (Co-Chairman) Victoria Windmill, Project Manager, A4S andMindy Lubber, President of Ceres and Director Marjolein Baghuis, Communications and Network Toward a Holistic Architecture for Corporate Manager, Deloitteof INCR Dr Nelmara Arbex, Deputy Chief Executive, Relations Director, Global Reporting Initiative Disclosure” and Forum for the Future (2009), Global Reporting Initiative Bastian Buck, Manager – Technical Development, Other acknowledgements “The Five Capitals Model – a frameworkCharles A. McDonough, Vice President and for sustainability”Controller, The World Bank Frank Curtiss, Head of Corporate Governance, Global Reporting Initiative Members of the Accounting Bodies Network of Railpen and Board member ICGN Ralf Frank, Managing Director, DVFA The Prince’s Accounting for Sustainability Project 9 See, for example, Eccles, R.G. and Krzus, M.P.Sir Mark Moody-Stuart, Chairman of the (2010), “One Report: Integrated Reporting forFoundation for the Global Compact Peter Dart, Director, WPP Robert Giglietti, Deputy Controller-Financial Robert Bruce, Journalist a Sustainable Strategy” and Hopwood, A.H.,Dennis Nally, Chairman, PricewaterhouseCoopers Jessica Fries, Director, The Prince’s Accounting for Reporting, GE Robert Bunting, Past President, International Unerman, J. and Fries, J. (2010), “AccountingInternational Limited Sustainability Project (Secretary) Gavin Grant, Chairman, Burson-Marsteller UK Federation of Accountants (former member of for Sustainability: Practical Insights”Jeremy Newman, Chief Executive Officer, BDO James Gifford, Executive Director, United Nations Lois Guthrie, Secretary, Climate Disclosure the IIRC) 10 CIMA, PwC and Tomorrow’s CompanyInternational Principles for Responsible Investment Standards Board Lauren Dalley, Group Account Director, Black Sun (2011), “Tomorrow’s Corporate ReportingEdward Nusbaum, Chief Executive Officer, Eric J. Hespenheide, Partner, Deloitte & Touche LLP Jonathon Hanks, Founding Director, Incite Jane Diplock, Former Chairman of the Executive – A critical system at risk”Grant Thornton International Kiyoshi Ichimura, Executive Board Member, The Sustainability Committee of IOSCO (former member of the IIRC)David Nussbaum, WWF-UK Chief Executive, Japanese Institute of Certified Public Accountants Yoichi Mori, Technical Director, The Japanese Alan Fisk, Technical Editor, InternationalWWF International Alan Knight, Independent Standards Advisor Institute of Certified Public Accountants Accounting Standards Board28 www.theiirc.org Towards Integrated Reporting 29
    • Your comments requested Please join us in this unique effort to develop an overarching framework for Integrated Reporting by providing feedback on thisDiscussion Paper. Your answers to the Consultation Questions in thisDiscussion Paper, and any other comments you would like to make, should be submitted to dpresponses@theiirc.org or online at www.theiirc.org. For the purpose of analysis, you are asked to identify the organization to which you belong and where it is located. All comments received will be considered a matter of public record and will be posted on www.theiirc.org. Comments should be submitted by Wednesday 14th December 2011. www.theiirc.org