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A year on from the introduction of a formal mandate, the majority of South African businesses are still missing out on the efficiency benefits of integrated reporting. But Karl Campbell, MD, South Africa, at CarbonSystems, is convinced cloud-based technology will answer the integrated reporting question.
In February Professor Mervyn King, chair of the Global Reporting Initiative and author of the King Code on Corporate Governance, noted that only half of listed companies in South Africa had so far mastered integrated reporting.
After a year of grappling with the expanded accounting practice, however, businesses across South Africa have realised that the demands of the new reporting regime far exceed the capacity of their existing accounting systems and associated business processes.
Let’s break down the problems they are encountering. Many companies don’t have accurate or complete non-financial data; either because they are simply not recording it, or not doing so systematically and reliably enough.
Meanwhile, those that have tried to achieve integrated reporting using a combination of existing accounting systems, spreadsheets and manual recording have found that the practice is fraught with risk, being labour intensive and susceptible to inaccuracy, which can produce results inimical to the very kind of success they are after.
Finally, the new integrated reporting regime requires new business processes and new software systems for reliable and consistent automated data capture, as well as broader reporting capabilities to cope with the official new demands. This means investment, time to bed in, training – things that take time to get up and running.
The good news is that a new breed of software applications exists now which can automate a whole slew of data capture and reporting requirements companies need to for integrated reporting.
Dedicated holistic energy, environmental, and CSR management and reporting applications offer sophisticated data capture, analysis and reporting functionality that meet financial grade audit standards and can be a real help here.
Better still, such capabilities are available via the Internet, more specifically – the cloud. Cloud-based integrated reporting solution is rapidly gaining traction both in South Africa and internationally.
Here, organisations as diverse as banking group Investec and retail group Combined Motor Holdings (CMH) have implemented such solutions to bring their corporate reporting swiftly and efficiently in line with IIRC requirements. CMH is already experiencing savings of R5-million a year – a figure it expects to increase.
What’s even better about this kind of solution is that it only takes a modest investment to get started. That also makes it much easier for organisations to think “outside the box” about the benefits of making the new measurements count.
In terms of energy efficiency, global brands from Walmart, Target, Cisco, Campbell’s Soup, Hilton, Ford, Chrysler, General Mills and TXU Energy collectively have reported saving equivalent to hundreds of millions of Rands through initiatives such as using renewable energy, energy efficiency and recycling schemes.
The bottom line is this. In its most basic form, integrated reporting is now an official expectation. South African businesses just have no option but to deal with it. That’s the inescapable compliance fact. But there’s a clear additional benefit if this requirement is approached the right way, and using cloud lightens the load.