Introduction to connected reporting

Sustainability issues such as climate change and the over-consumption of the Earth's finite natural resources ' increasingly living off the Earth's capital rather than its income ' are challenges that are likely to lead to major changes in the way we live and work, in our economic model and in the level and type of government regulation.

In the face of this "sustainability revolution", it is increasingly important for organizations to understand how such issues will impact on their continuity and long-term success, and to be able to communicate clearly both the impacts and the company's response to investors and other stakeholders. It is only through the integration of environmental and social factors into business and management reporting that the fundamental connection between strategic direction, financial performance and sustainability impacts will be made clear.

What is connected reporting?

Connected reporting aims to provide a new approach to corporate reporting and to address the growing dissatisfaction, amongst both preparers and users, with the incompleteness, length and complexity of many organizations' Annual Report and Accounts.

A connected report should be focused on the needs of long-term investors and executive management. Reported information should identify and explain the connection between the organization's strategic objectives, the industry, market and social context within which the business operates, the associated risks and opportunities it faces, the key resources and relationships on which it depends, and the governance, reward and remuneration structures in place. Further, it should explain the connection between delivery of the business's strategy and its financial and non-financial performance.

The result is a more concise, rounded and balanced picture of an organization's overall performance, which reflects the organization's strategy and the way it is managed.