KPMG has published its 2020 Survey of integrated reports in Japan, with 579 organizations publishing self-declared integrated reports in 2020.
KPMG’s analysis reveals that, in the wake of the Covid-19 pandemic and climate crisis, the number of businesses identifying material issues via their integrated reports has increased. More businesses are starting to recognize the importance of disclosure on tangible and intangible assets to aid transparency and stakeholder accountability has moved to the forefront of businesses’ decision making.
In the survey, KPMG offers key recommendations for businesses looking to produce their annual report as an integrated report.
The first is to not only disclose information to meet legal requirements, but also communicate in a succinct manner how the business will achieve their purpose. In light of the Covid-19 pandemic, this will build trust and understanding with stakeholders and lead to sustainable growth.
The second recommendation is for businesses to organize and refine the content based on material issues to ensure their integrated reports are more accessible to readers and capture the whole value creation story.
The third recommendation focuses on the specific value creation story of a business. It is critical that organizations offer a clear picture of their unique path to value creation, rooted in their distinctive purpose, in their corporate reports. This is key for stakeholders both within and outside the organization to understand the purpose and value that the organization creates.
Writing in the foreword IIRC Ambassador, Susanne Stormer, wrote, “I am impressed by the determination and speed with which Japanese businesses have embraced integrated reporting. It represented a change in how companies understand and account for the value they create over the short, medium and long term – for the enterprise and for society. It’s a mindset that shapes how to manage a business for long-term success. A sustainable business.”
Michael Bray, Director of In-Country Engagement at the IIRC added, “I encourage Japanese companies to be brave to go beyond statute-required compliance disclosure to explain what value their organization brings to all of its stakeholders and society.”