DFA 2116

Integrated Reporting,
Integrated Thinking and
Value Creation

Presented by : M Ramen
IR: Ethical , Social and Environmental
Issues
The introduction of integrated reporting appears to
have created a new set of priorities for the directors,
expressed through the reporting.
Ethical, social and environmental information
appears throughout in a significantly greater
number of integrated reports.
The reports are imbued with stakeholder
accountability rhetoric.
Within a couple of years companies have shifted
from an approach to reporting aimed primarily at
shareholders to one that explained the directors’
commitments in stakeholder accountability and
stakeholder engagement
 IR and Ethical Issues
The results of various researches confirm that assurance
of integrated reports serves as a response to the
absence or incompetence of companies characterized
by weaker ethical behaviors, less effective boards,
poorer auditing and reporting standards.
Ethics in relation to integrated reporting refers to
business ethics
Business ethics is the moral principles, policies, and
values that govern the way companies and individuals
engage in business activity.
It goes beyond legal requirements to establish a code of
conduct that drives employee behavior at all levels and
helps build trust between a business and its customers.
 IR and Ethical Issues
Business ethics ensure that a certain basic level of trust
exists between the entity and various stakeholders in
the market or industry
It guarantees fair and equal treatment to different
stakeholders
Business ethics goes beyond just a moral code of right
and wrong; it attempts to reconcile what companies
must do legally versus maintaining a competitive
advantage over other businesses.
Firms display business ethics in several ways based on
the principles of business ethics.
 IR and Ethical Issues
It is essential to understand the underlying principles that
drive desired ethical behavior and how a lack of these
moral principles contributes to the downfall of companies.
The basic ethical principles include:
 Leadership: The conscious effort to adopt, integrate, and
emulate the other principles to guide decisions and behavior
in all aspects of professional career and business growth
 Integrity: Incorporates other principles—honesty,
trustworthiness, and reliability.
 Respect for others: To foster ethical behavior and
environments in the workplace, respecting others is a critical
component. Everyone deserves dignity, privacy, equality,
opportunity, compassion, and empathy.
 IR and Ethical Issues
Honesty: Truth in all matters is key to fostering an
ethical climate. Partial truths, omissions, and under or
overstating don't help a business improve its
performance. Bad news should be communicated and
received in the same manner as good news so that
solutions can be developed
Respect for laws: Ethical leadership should include
enforcing all local, state, and federal laws. If there is a legal
grey area, leaders should err on the side of legality rather
than exploiting a gap.
Responsibility: Promote ownership within an
organization, allow employees to be responsible for their
work, and be accountable for yours
 IR and Ethical Issues
 Transparency: Stakeholders are people with an interest in
a business, such as shareholders, employees, the community a
firm operates in, and the family members of the employees.
Without revealing trade secrets, companies should ensure
information about their financials, price changes, hiring and
firing practices, wages and salaries, and promotions are
available to those interested in the business's success.
 Compassion: Employees, the community surrounding a
business, business partners, and customers should all be
treated with concern for their well-being.
 Fairness: Everyone should have the same opportunities and
be treated the same. If a practice or behavior would make you
feel uncomfortable or place personal or corporate benefit in
front of equality, common courtesy, and respect, it is likely not
fair.
 IR and Ethical Issues
Loyalty: Leadership should demonstrate confidentially
and commitment to their employees and the company.
Inspiring loyalty in employees and management ensures
that they are committed to best practices.
Environmental concern: In a world where
resources are limited, ecosystems have been damaged by
past practices, and the climate is changing, it is of utmost
importance to be aware of and concerned about the
environmental impacts a business has. All employees
should be encouraged to discover and report solutions for
practices that can add to damages already done.
 IR and Ethical Issues
Importance of Business Ethics
There are several reasons business ethics
are essential for success in modern business.
Most importantly, defined ethics programs establish a
code of conduct that drives employee behavior—from
executives to middle management to the newest and
youngest employees.
When all employees make ethical decisions, the
company establishes a reputation for ethical behavior.
Its reputation grows, and it begins to experience the
benefits a moral establishment such as :
 IR and Ethical Issues
• Brand recognition and growth
• Increased ability to negotiate
• Increased trust in products and services
• Customer retention and growth
• Attracts talent
• Attracts investors

• Fostering an environment of ethical behavior and

decision-making takes time and effort.It always starts at
the top.
• Most companies need to create a code of conduct/ethics,
guiding principles, reporting procedures, and training
programs to enforce ethical behaviour.
 IR and CSR
CSR and integrated reporting are not just
trends, they the future.
As businesses grow more interconnected and
the world faces unprecedented challenges,
the way corporations report and act on their
responsibilities will be a significant marker of
their success.
Organizations are to look beyond traditional
reporting and fully embraced the integrated
model.
CSR in the integrated report is to highlight the
commitments of the entity to social
responsibilities.
 IR and CSR
 Corporate social responsibility (CSR) is a self-regulating business model that
helps a company be socially accountable to itself, its stakeholders, and the
public.

 By practicing corporate social responsibility companies are aware of how they

impact aspects of society, including economic, social, and environmental.

 Engaging in CSR means a company operates in ways that enhance society and
the environment instead of contributing negatively to them.

 A socially responsible company is accountable to itself and its shareholders.

CSR is commonly a strategy employed by large corporations. The more visible
and successful a corporation is, the more responsibility it has to set standards
of social responsibility to the stakeholders ,industry and the society at large.

 Different types of CSR may be included in <IR>

 IR and CSR
Environmental responsibility: Corporate
social responsibility is rooted in preserving the
environment. A company can pursue environmental
stewardship by reducing pollution and emissions in
manufacturing, recycling materials, replenishing natural
resources like trees, or creating product lines consistent
with CSR.
Ethical responsibility: Corporate social
responsibility includes acting fairly and ethically.
Instances of ethical responsibility include fair treatment
of all customers regardless of age, race, culture, or
sexual orientation, favorable pay and benefits for
employees, suppliers use across demographics, full
disclosures, and transparency for investors.
 IR and CSR
• Philanthropic responsibility: CSR requires a
company to contribute to society, whether a company
donates profit to charities, enters into transactions only
with suppliers or vendors that align with the company
philanthropically, supports employee philanthropic
endeavors, or sponsors fund raising events.
• Financial responsibility: A company might make
plans to be more environmentally, ethically, and
philanthropically focused, however, it must back these
plans through financial investments in programs,
donations, or product research including research and
development for products that encourage sustainability,
creating a diverse workforce, or implementing DEI,
social awareness, or environmental initiatives.
 IR and the Environment
Integrated reporting can also improve the current
practice of environmental and social reporting.
 Investors currently demand to know how good a
company manages the environment and social issues.
The current reporting lack of integrated thinking, so the
presentation of these issues only limited to monetary
numbers .
The company needs to disclose risks associated with
environmental and social issues and the long-term
strategy to mitigate the risks
Integrated reporting framework can facilitate that
information
 IR and the Environment
Integrated reporting is also aligned with Sustainable
development Goals (SDG) by providing the company's
activities related to major(17) areas of SDG
Integrated reporting is also aligned with many reporting
standards concerning environmental and social
reporting, like Global Reporting Initiative (GRI) or
Sustainability Accounting Standards (SAS).
Integrated reporting elements might be elaborated with
reporting elements from GRI or SAS so that it can
present more robust and comprehensive information
about environmental and social issues.
 IR and the Environment
Integrated reporting is also aligned with Sustainable
development Goals (SDG) by providing the company's
activities related to major(17) areas of SDG
Integrated reporting is also aligned with many reporting
standards concerning environmental and social
reporting, like Global Reporting Initiative (GRI) or
Sustainability Accounting Standards (SAS).
Integrated reporting elements might be elaborated with
reporting elements from GRI or SAS so that it can
present more robust and comprehensive information
about environmental and social issues.
 IR and the Environment

Question 1
In the context of Integrated Reporting, describe how does
an organization’s governance structure support its ability
to create value in the short, medium and long term?
Thank You For Your Kind
Attention