Chief Advisor, Integrated Reporting, Eskom Holdings SOC Ltd
Eskom has been on the integrated reporting journey with the IIRC since the very beginning, as one of the South African companies participating in the IIRC’s original Pilot Programme.
Our 2011 so-called integrated report was based on local guidance available at the time, but was in fact a combined report. Our 2012 report was our first true attempt at an integrated report, based on guidance by the IIRC at the time, prior to the release of the International <IR> Framework in December 2013.
In our 2012 report, we said, “Integrated reporting is a new international initiative that has emerged in response to the shortcomings of traditional reporting, which emphasises financial results without taking account of the broader context in which companies operate. Integrated reporting allows for reporting in an interdependent manner. Eskom formed an integrated reporting steering committee to ensure alignment with other reporting processes.”
In 2013, we incorporated our business model for the first time. This has been enhanced over the years, with another refresh due as Eskom moves towards separation of its three major lines of business – generation, transmission and distribution – over the coming years.
I joined the team responsible for preparing Eskom’s integrated report in 2014, coming from a financial reporting background. I realized immediately that I had found what I never knew I had been looking for. The idea of integrated reporting was tremendously appealing, focusing as it did on the entire business and its future sustainability and value creation through the responsible use of the capitals, rather than being backward-looking and dedicated only to financial performance. The fact that the <IR> Framework provided guidance, and didn’t require boilerplate disclosure like financial reporting does, was also very attractive.
Over the years, we have improved the structure of the report, to ensure that information on a particular topic can be accessed in one place, or easily accessed through the use of cross-referencing. The structure of the report is also adapted when certain content elements become more relevant. For instance, when Eskom had significant governance challenges, we elevated governance to the front of the report, whereas before, it was to be found at the back. We also use the integrated report to educate users, or to provide additional information on certain topics, through the use of information blocks.
I was fortunate to attend the IIRC Pilot Programme conference held in Madrid in 2014, which cemented my passion for integrated reporting. Since then, I have attended the conference in Amsterdam in 2017, and in London in 2019. Due to the virtual nature of this year’s conference, I will again be able to participate, something which would otherwise have been impossible with the travel restrictions imposed in South Africa.
The conferences have been a tremendous opportunity to learn about all aspects of integrated reporting and related topics, as well as network with like-minded individuals. I always return from a conference with a renewed commitment to integrated reporting, and to improving our report.
Steven von Berg joined our team in 2019. He says, “Integrated reporting has taught me to value the flow of information within an organization. Large, well-established and complex organizations like Eskom are particularly susceptible to silo thinking and information asymmetry, negatively affecting the quality of decisions made. The <IR> Framework has allowed both users and preparers of Eskom’s reports to benefit from more efficient, material and coherent reporting. I firmly believe that these reports have provided not only Eskom’s external stakeholders, but also management and the Board, with clearer insight into Eskom’s performance and the issues affecting the organization and its stakeholders. This greater clarity leads to more effective decision-making and improves the outlook and the ability of the organization to create value.”
Martin Buys, general manager responsible for financial and management reporting, adds, “Integrated reporting allows an entity to tell its story in such a way that readers have better insight and understanding of the entity. It paints a picture of not only current performance, but more importantly of the future, an area which is lacking in traditional financial reporting.”
As Steven indicated, integrated reporting continues to challenge us to improve our reporting to stakeholders, by focusing on what is material. Nevertheless, our single biggest challenge remains conciseness – every year, it is at the top of our list of areas to improve. Something of which we are very proud is that our report is seen as balanced, as we don’t shy away from discussing problem areas. Looking ahead, we would like to start incorporating the Sustainable Development Goals in our report, and enhance reporting on how different aspects of our organization affect value creation, preservation and erosion.
I firmly believe that integrated reporting is here to stay, and we relish the challenge to keep learning from and contributing to the integrated reporting community, and thereby continuously improving our integrated report.