The rise of disintegrated reporting

The EU’s new Corporate Sustainability Reporting Directive (CSRD) certainly doesn’t talk the language of integrated reporting (IR). In fact, it separates a company’s ‘sustainability statements’ from its ‘financial statements’.

And make no mistake: the CSRD is currently the biggest game in town, at least for European companies.

The CSRD may talk ‘dis-integrated reporting’, but the Directive also puts safeguards in place which – if respected – should preserve the essentials of IR.

Under the CSRD, companies will still have to report on their value chain, for example. They’ll still have to disclose their approach to managing social and environmental risks.

And the CSRD actually advocates a “connected” narrative – it says a company’s report should connect “governance, strategy and risk management”.

So, in future, IR may not be called IR. But it will survive. That’s not just because of the CSRD’s safeguards. It’s because society increasingly expects it. Soon, a company’s effect on climate change may be just as important, or (whisper it…) even more important, than the returns it makes to shareholders.