Integrated Report: What is it and why translate it?

An Integrated Report is a form of non-financial reporting that plays an important role for any company. Let’s look at why it’s a good idea to translate it.

It’s now widely accepted that the world of economics and finance is closely connected to society and the environment, so the rise of the Integrated Report should come as no surprise. It is a new reporting tool that combines financial data with other kinds of information to provide a holistic overview of the value generated by companies for stakeholders.

The great challenges of our time, such as the climate, financial and health crises, teach us that the best way to tackle these complex issues is to adopt a mindset that takes into account the interdependent relationships between different factors.

This is exactly what companies are being asked to do by a range of voices, not least the financial community and international organizations.

Companies are now expected to integrate non-financial aspects, also known as ESG criteria (Environmental, Social, Governance), into their business strategies – and there is now pressure for companies to clearly and transparently set out the impact of their activities.

These expectations formed the basis of Directive 2014/95/EU, followed in Italy by Legislative Decree 254/2016, which made it an obligation for large companies to choose a suitable form of Non-Financial Reporting (NFR) to report on the economic, social and environmental impact of their activities on all stakeholders, starting with investors and consumers.

A range of reporting formats are available that enable companies to trace their sustainability footprint, measured against the three Ps (People, Planet and Profit): the Environmental Report, the Social Report and the Sustainability Report

However, an Integrated Report is undoubtedly a superior version of all of these. Based on a holistic approach that considers the value generated by a company in its entirety, acknowledging the systemic interrelations at play, an Integrated Report is a way of keeping all stakeholders updated (including employees, clients, suppliers, commercial partners, local communities, legislators, regulatory bodies and political decision-makers).

But what exactly is an Integrated Report? Let’s take a look together.

What is an Integrated Report?

An Integrated Report is a specific tool with a dual purpose. Besides guiding the company’s strategic development, within the process of communication between business and stakeholders (investors first and foremost), it also becomes an excellent means of communication regarding the way in which the company generates value in the short, medium and long term.

What sets this type of reporting apart from the rest is its ability to provide a comprehensive snapshot of the internal and external dynamics of the company, using a materiality matrix to showcase the way in which internally and externally relevant factors are treated in regard to the business development strategy. It generates value for all stakeholders.

To produce this type of report, companies can choose what standard or framework they wish to use. GRI (Global Reporting Initiative), A4S (Accounting for Sustainability), IFRS (International Financial Reporting Standard), GAAP (Globally Accepted Accounting Standard)… the list goes on.

One of the most comprehensive and widely used is the <IR> Framework from the IIRC (International Integrated Reporting Council), which is based on the theory of the six capitals, i.e. the stores of value produced by the company. They are:

• financial capital;
• manufactured capital;
• intellectual capital;
• human capital;
• social and relationship capital;
• natural capital.

According to the IIRC, “the success of any organization depends on the interconnected use of the six forms of capital”. An Integrated Report illustrates the capitals used by the company both internally and externally as part of their business model, as well as explaining how these interact within the production of value.

A well-executed Integrated Report will set out the company’s strategic focus and plans for the future, the ways in which the various information is interconnected, the company’s relationships with stakeholders and the material areas that have an impact on value generation – and it must convey all this information in a reliable, concise, coherent and comprehensive manner.

Given the complexity and size of the process of self-assessment required of a company to provide a comprehensive view of its activities, it’s unsurprising that an Integrated Report also represents a precious tool for strategic planning.

As a representation of the company’s activities, results and impacts over the course of the year, and as an illustration of its business model, risks, opportunities and future prospects, the Integrated Report is a fundamentally important document when it comes to tracking and improving the ways in which capital is allocated and used to achieve objectives.

It’s a document that has so many different purposes, but translating it into different languages can take it to a whole other level.

Why translate an Integrated Report?

Translating an Integrated Report into different languages is a smart decision for any type of company.

For companies operating in multiple markets, translating the Integrated Report is necessary to overcome language and cultural barriers and to provide information to overseas stakeholders.

The effort made by a company to make the document available to overseas stakeholders in their language is certainly seen as a positive and helps to strengthen these bonds.

However, translating the Integrated Report can also benefit companies who operate only in their country of origin.

Investors are the stakeholders who are most interested in this type of reporting, particularly since ESG criteria became mandatory requirements in investment decision-making.

Translating an Integrated Report can therefore be a way of raising the profile of your company among foreign investors, thus increasing your opportunities to obtain additional funding.

Producing and translating an Integrated Report is a significant undertaking – we know that from personal experience, here at Way2Global.

Despite being a small company and therefore not being legally required to do so, this year we decided to produce our first Integrated Report to share with our stakeholders the results we’ve achieved over the course of our first three years. As a Benefit Corporation, we’re required to publish an impact assessment every year – so we decided to integrate this into our Integrated Report.

As a translation agency, we know how hard it can be to translate such a complex document. However, thanks to our 30 years’ experience and customized workflows for every client, we’re able to offer a quality service that adheres to often tight time constraints.

Need to translate an Integrated Report or another financial document? Get in touch!