Philips Pioneers Integrated Annual Report

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Executive Summary

This report helps firms considering sustainability reporting options with a case study of the implementation of an integrated report. Since 2008, Philips has published an integrated Annual Report that links its business strategy with environmental and social trends; combining financial performance disclosures with sustainability performance data. Philips developed the report independently because the firm wished to convey the extent to which sustainability issues are embedded within business strategy. The firm found that integrated reports attract a larger audience than annual financial reports, and has also linked it to improved employee engagement. Early adopters of integrated reporting face challenges aligning reporting streams, and must recognise that this emerging field has no globally accepted standards to guide reporting scope or accounting policy. Philips has shaped its own reporting framework, which it plans to develop further by increasing the standard of sustainability assurance to match financial audit and further incorporating environmental, social and governance (ESG) KPIs requested by financial analysts.

TABLE OF CONTENTS

PHILIPS ANNUAL REPORT INTEGRATES FINANCIAL AND SUSTAINABILITY DATA
Philips Annual Report Reviews Financial And Sustainability Performance
Integrated Annual Report Materially Improved Engagement
Lack Of Reporting Standards Adds To The Management Challenge
Philips Plans To Increase Interactivity And The Rigour Of Reporting

TABLE OF FIGURES

Figure 1. Philips Incorporates Sustainability Strategy & Performance Throughout Report

COMPANIES MENTIONED

European Federation of Financial Analysts Societies, Global Reporting Initiative, International Integrated Reporting Committee, Kenexa, KPMG, South African Integrated Reporting Committee