Integrated thinking in action: Purpose
Organizations worldwide are increasingly adopting integrated thinking and integrated reporting to help them plan, manage and report on their business in a holistic way. By viewing the entity through a more connected, multi-capital lens, organizations can tell their value creation stories in a way that responds to stakeholder demands for greater transparency and accountability, and more insightful information.
We have listened to integrated thinking journeys around the globe and learned how businesses have adopted a more holistic, cross-functional approach to creating and preserving value over time.
In this blog series, we look at illustrative examples of how companies have applied the six Integrated Thinking Principles, including challenges they faced, solutions implemented, and benefits realized. The first of these principles is purpose.
An organization’s purpose answers the foundational questions, why do we exist and what is our unique contribution to the needs of society and the environment?
In application, organizations might consider the following questions related to purpose:
- ls our organizational purpose motivational for our internal stakeholders?
- How does it guide the way our organization conducts its business?
- ls it as relevant across the organization as it is for those charged with governance?
- ls it also relevant among business partners and stakeholders?
- ls there consistency between our organization’s decision-making, resource allocation and purpose and is this routinely reviewed by those charged with governance?
To explore these questions, we’ll look at examples from companies implementing purpose as a core part of their business strategy.
Snam grounds its strategy in its purpose
Snam is one of the world’s leading energy infrastructure operators and one of the largest Italian listed companies in terms of market capitalization. Snam operates in Europe’s major markets, including the United Kingdom, Greece, France and United Arab Emirates through agreements with the leading industry players and direct equity investments in the share capital of various companies.
Integrated thinking is now embedded within the organization, after becoming a fundamental element of Snam’s 2019-2023 strategic plan. The plan aimed to deliver sustainable growth through a value creation model that fosters the continuous improvement of the core business, a solid financial structure, the commitment to energy transition and the development of an internationalization strategy.
The strategy was underpinned by the purpose of the organization: ‘Energy to inspire the world’. In turn, the purpose was articulated by four values, which integrate ESG aspects within the business:
- Making connections to create opportunities
- Promoting safety
- Supporting the world which is changing
- Giving shape to the future
These four values drive the company’s business activities.
“In 2012 we started to rethink our identity, we started to work on our organizational culture. This is an ongoing process, nonetheless we now have integrated ESG factors across all functions of our business. The main enablers of this process have been our purpose and our values, which allow us to carry out our business activities, storage, transportation, regasification and Green Business, by taking into account the holistic value that is created.”
– Lorenza Barsanti / Sustainability Manager, Snam
Read the full Snam case study to learn more about how Snam applies integrated thinking. Visit Snam’s website to see how they’ve updated their strategic plan for 2021-2025.
NN Group redefines its purpose through integrated thinking
NN Group is an international financial services organization based in the Netherlands and active in 20 countries, with a strong presence in Europe and Japan. With its 15,000 employees, NN provides retirement services, pensions, insurance, investments and banking to approximately 18 million customers. It is NN’s ambition to be an industry leader, known for its customer engagement, talented people and contribution to society.
When developing the new strategy in 2019/2020, NN’s Management Board looked at some underlying questions, like what is the purpose of the organization, and what would NN like to achieve over the long term. In December 2019, a committee was set up to advise and support the Management Board in developing a new purpose statement. Many people participated in this process, and NN’s redefined purpose — ‘We help people care for what matters most to them’ — now better reflects their aspiration to be an organization that creates long-term value, not just wealth, for all their stakeholders.
A year later, the committee was formalized as the group-wide Purpose Council with the objective to oversee how NN are upholding their purpose and progressing on their non-financial targets. NN’s purpose was placed at the top of its strategic framework to lead people in all decision making. It is strongly linked to NN’s ambition for the future: to be an industry leader with talented people, and a reputation for excellent customer service and a positive contribution to society;
“Our purpose is a key component of our strategic decision making, as it reflects the kind of company we want to be. It also aspires to engage, connect and motivate our colleagues and future colleagues. Furthermore, a well-lived purpose will build trust with our stakeholders.”
– Babs Dijkshoorn / former Sustainability Manager, NN Group
As a result of embedding integrated thinking, NN Group can better understand the environment in which it operates and respond to its stakeholders’ needs in a constructive way. They believe that if they take good care of their customers, their people and the communities in which they operate, this allows them to deliver solid long-term returns for shareholders.
Read the full NN Group case study to learn more about how NN Group applies integrated thinking. Visit NN Group’s website to see their purpose and strategy. View the strategy section of the NN Group’s 2020 annual report.
Integrated thinking and integrated reporting are mutually reinforcing. The Integrated Thinking Principles consider holistically the resources and relationships an organization uses or affects and the dependencies and trade-offs between them as value is created, thereby helping to break-down internal silos. The Integrated Reporting Framework drives high quality corporate reporting and connectivity between financial statements and sustainability-related financial disclosures, bringing together in one place the information that investors need to assess a company’s ability to create value over time. Visit our resource library to learn more, and stay tuned for the remainder of this blog series to see more examples of how other organizations have applied the Integrated Thinking Principles.
Next up: Governance.
 As part of its 2019 – 2023 strategic plan, Snam defined “Green Business” as “promoting a low-carbon, circular economy by integrating operations with new businesses that support the decarbonisation processes, such as biomethane, hydrogen, the use of gas for sustainable mobility (CNG, LNG), and new technologies capable of incorporating renewable energy from the environment.” (page 40, Snam 2020 Annual Report)
The IFRS Foundation, the ISSB, the authors and publishers are not affiliated with the companies referred to in this report. This report is for information only and in no way constitutes any type of advice.