Business is all about earning money: revenues less expenses. The bigger the difference between them the better the business is doing. To calculate costs the direct use of labour, materials, energy, transport etc. is examined. That is logical, but it is only part of the story: often, business operations also have an indirect impact, for example, on the working and living conditions of employees, and the amount of available raw materials in the world. With Integrated Reporting both the direct and indirect impact of business activities are made clear. And that is really necessary, also from a commercial point of view…
We have said it before: Integrated Reporting is a real necessity. Whoever is responsible for both financial and non-financial business activities must be transparent. That’s crucial, because transparency helps to get investors on board. Sustainability is therefore stimulated and of course that is good for society and the planet. But how do you tackle that at the strategic level?
Less risks, more insight
The British Crown Prince, Charles has frequently shown himself to be in favour of Integrated Reporting. With his organization, A4S (Accounting for Sustainability) he works for the ‘embedding’ of Integrated Thinking in strategic decision making processes. According to A4S the importance of that is twofold. On the one hand, sustainable enterprise decreases the risks of future commodity shortages, price fluctuations and strict legislation. On the other hand an eye to sustainability helps to identify the activities, risks and opportunities for your company from a helicopter view.
10 Key elements
For the integration of Integrated Thinking in business operations the EFQM Excellence Model offers a solution. A4S has listed 10 key elements that are in line with the EFQM Model:
Commitment Board of Directors: sustainability must be embraced at top level. Without this support there can be no success.
Insight into critical success factors: generally there are only a limited number of people and means available. An assessment can help to identify what the most important challenges to sustainability are.
Integration of critical success factors into the strategy: sustainability should not be a separate project of its own; rather it should be integrated into the strategy.
Integration of sustainability at all levels: sustainability is for all employees jointly.
Translation of sustainable ambitions into concrete objectives: translating a global vision into daily practice is often difficult. With concrete objectives per department/business unit you prevent ambitions dying prematurely.
Stimulate sustainable decision making: no change without knowledge. For example, a buyer cannot make a sustainable decision if the consequences of a choice are not known. Providing information is a must.
Train your employees: a culture change will not happen automatically. To truly integrate sustainable thinking, training is required. Not just to increase knowledge and skills, but also to get rid of any resistance.
Integrate sustainable objectives in the reward structure: sustainable thinking demands a lot from an organization. Rewarding objectives achieved should not be neglected. That pays itself back in a powerful ‘motivation boost’.
Appoint ambassadors: every process needs initiators. Select employees who approach sustainability ambitions with passion and genuine commitment. Make them important: they can be a source of inspiration for the rest of the organization.
Choose Integrated Reporting as a rule: say goodbye to the old way of thinking, choose Integrated Reporting. In that way, sustainable achievements are visible, and that is good for everyone, from employee to shareholder.
Sustainable thinking is not as difficult as it seems. It is mostly a mind shift, a new way of thinking. Looking for inspiration? Discover how commercial global idealists work, or contact us for a personal consultation.