Financial performance was once the sole yardstick for corporations as they planned growth strategies and managed operations, but leading global businesses have begun to focus on performance across a larger spectrum of financial and non-financial areas in order to gain and hold competitive advantage. Organizations are shifting towards sustainable business models and seeking the most effective means to measure and manage all aspects of corporate performance.
Monitoring and analyzing how corporate peers and competitors are approaching these shifts can uncover best practices and provide essential data for benchmarking. Novo Nordisk, a Danish multinational pharmaceutical company and the largest producer of insulin in the world, has long been considered a leader in sustainability – but what sets it apart from its peers? Although there are multiple facets of Novo Nordisk’s sustainability efforts, what really stands out is its dedication to integrated reporting as well as its approach to engraining sustainability into its strategic decision-making.
Integrated reporting is the practice of reporting financial, economic and social performance together rather than addressing them separately. Sustainability is becoming increasingly important for organizations across industries and environmentalism is emerging as a key component of business competitiveness.
Executive decision-makers are starting to reconsider how to create and measure value as consumer power is directed increasingly toward purpose-driven businesses and investors turn their financing power towards more climate-friendly investments. These developments coincide with heightened expectations for corporate transparency, which demands that organizations be more open with consumers and regulatory bodies about the impact their business activities have.
Forward-thinking companies such as BASF and Puma are exploring how they can develop long-term value by taking stock of economic, social and ecological impacts. Integrated reporting provides an avenue through which companies can not only increase transparency but take stock of environmental and social impacts, generating important data that can help improve operations, increase accountability and improve decision-making. There are clear indications of the benefits of more effective non-financial corporate reporting and correlations have been made between environmental, social and governance (ESG) strategies and improved commercial performance.
This article was originally published on ShiftCentral, now part of LAC Group.