The financial impact of the COVID-19 pandemic spelled disaster for many organisations, with many High Street retailers, already struggling against their lower-cost online competitors, closing their doors for good. Stock markets plunged to their lowest during the first quarter of 2020 and, although we are now beginning to see the first signs of economic recovery, investor confidence has taken a huge knock.
Over the last decade, the sustainability and reporting agendas have increasingly raised questions around traditional notions of business value, seeking to incorporate areas such as environmental and social impacts.
The International Integrated Reporting Council (IIRC) Integrated Reporting framework highlights three areas relating to the activities of people — human, intellectual, and social & relationship capital.
The consequence of years of under-investment in health infrastructure was highlighted in a recent commentary from the IIRC looking at integrated reporting in a post-pandemic world. It raised important questions around people activities and their affects:
Human capital — Has your organisation considered their obligations to broader societal health and hygiene, and whether their products and technologies serve to address, or to add to, the problem?
Social and relationship capital — Does your organisation offer solutions for the mental health of people of different age groups and in different working contexts? How well do you support organisational and societal preparedness for disaster events?
Intellectual capital — Is your company contributing to enhanced trust in science? Are you enabling the re-skilling of employees, shaping attractive working environments and building the capacity of future talent?
In the post-COVID-19 world, which has brought the population and societal aspects of our existence sharply into focus, organisations are likely to take a different view of their relationships, activities and affects, both positive and negative. Focusing on the links between pre-financial and financial information will be essential.
In times of crisis, investors will want access to reliable and comprehensive information around the sustainability of their investment. Organisations must consider the most appropriate and honest way to report this.
A company’s relationships are interconnected. Communicating in a coherent way that meets their different needs is key to creating and sustaining value.
CGMA 'Integrated Thinking', 2014
