More than just the triple bottom line
A new non-financial reporting framework aims to increase business transparency, accountability and reporting on business strategy.
New Zealand Post is the only New Zealand company piloting the Integrated Reporting Framework, in conjunction with the Sustainable Business Council.
New Zealand Post chief financial officer Mark Yeoman said it introduced the framework more than 18 months ago because it acted as a natural extension of the SOE's existing Corporate Social Responsibility initiatives.
He said the framework showed how New Zealand Post planned to protect, measure and grow its non-financial sources of value.
"Traditionally, financial value is covered off in financial reports, but there was no way to track the company's impact on social, intellectual and human value."
Unlike financial measures, the framework examines why these values are important, what strategies are in place to protect them and how their success will be measured.
New Zealand Post was going through a number of structural changes which would result in a number of employees losing their jobs, Yeoman said.
Therefore, one of the initiatives was to help displaced staff with this personal and professional transition. The framework holds New Zealand Post to account for implementing strategies and programmes for staff.
Irrespective of these changes, he said, this framework increases business transparency and how it adds value during times of change.
It shows where the business is heading, what strategies are in place to ease the transition and what the end result would look like, Yeoman said.
"It helps customers understand where we are going and what we are doing."
Although he said the triple bottom line - people, planet, profit - had its place, it was weaker than integrated reporting as it "tries to mimic a financial view on things which are inherently non-financial".
He said the Integrated Reporting Framework was one balance sheet, which incorporated a number of dimensions, including social networks, customer relationships and manufactured sources of value.
"It doesn't make sense to twist these into something which looks like a financial report."
Aside from this, the triple bottom line focused on what the business has already achieved in these areas, rather than what the business plans to achieve in the future, Yeoman said.
Sustainable Business Council chairman Brett Tomkins said this method of reporting created value across a business's entire sphere - including its local community, employees as well as stakeholders.
He said the framework resulted from customers' and investors' desire for more information about business activity, and greater transparency.
Yeoman will be speaking at the Sustainable Business Council's Transparency and accountability through integrated reporting workshop, which takes place in Auckland tomorrow.