Integrated Reporting Investing in Responsibility Conference November 2012

1. Integrated Reporting • Investing in Responsibility Conference November 2012

2. Introduction • Jessica Fries • Integrated Reporting Network Leader, PwC • Director of the Board and Vice Chair of Working Committee, International Integrated Reporting Council • Executive Chairman, The Prince’s Accounting for Sustainability Project

3. The International Integrated Reporting Council (IIRC) • Financial and sustainability standard setters (IASB, FASB, GRI …) • Securities and financial regulators(IOSCO, TSE and other stock exchanges, FSB…) • Investors(UN PRI, ICGN, asset owners and asset managers) • Companies(WBCSD, UNGC, BSR, 82 pilot companies and others) • Intergovernmental organisations (World Bank, UNCTAD) • Accounting(IFAC, accounting firms, accounting bodies) • Civil society and academia (A4S, WWF, Transparency International, WRI, Harvard, Uni. Sao Paolo, Uni NSW)

4. Changing landscape: the next 20 years Environment Technology Demographic change Socioeconomic structures Risk & Opportunity Global systemic issues Global business issues Career disintegration Complex supply chains Outsourcing Product lifestyles Offshoring Cost cutting New channels

5. Shortcomings with today’s reporting model

6. Fundamental concepts: How the organization creates and sustains value IIRC prototype, October 2012

7. Increasing length and complexity

8. Importance of the big picture: joining the dotsSame volume, different insight • Close-up pictures • (partial connectivity) without big picture • Pieces of information without connectivity • Big Picture • Number of pieces=40 • Number of pieces=40 • Number of pieces=40

9. Principles and content elements • Building blocks – 2011 • Principles – 2012 prototype • Strategic focus and future orientation • Connectivity of information • Responsiveness and stakeholder inclusiveness • Materiality and conciseness • Reliability • Comparability and consistency IIRC Discussion Paper, September 2011

10. Integrated reporting and the integrated reportAlternative pathways Annual Report CR Report Primary Report Integrated Report Fin. Statements Annual Report CR Report Combination CR-Chapter Limited inclusion Embedding Online Integrated Report Sustainability CR Non-fin. Statements Website Annual and IntegratedReport Fin. Statements Investors Other key stakeholders Compliance MI Integrated Report Integrated Reporting Integration in Annual Report

11. What is clear and what is notHeadline findings – PwC FTSE 350 benchmarking 2012 Include strategic priorities Base reporting on strategic themes 95% 28%

12. What is clear and what is notHeadline findings – PwC FTSE 350 benchmarking 2012 Discuss future market trends Link market discussion to strategic choices 86% 21%

13. What is clear and what is notHeadline findings – PwC FTSE 350 benchmarking 2012 Include some relevant insight into their sustainability issues Embed sustainability in overall strategy 78% 20%

14. What is clear and what is notHeadline findings – PwC FTSE 350 benchmarking 2012 Governance reports mentioning the company's culture and values Clearly explain actual Board / Committee activities in the year 49% 34%

15. Roadmap to Integrated Reporting 1H 2012 2H 2012 1H 2013 2H 2013 • Discussion Paper responses • Framework outline • Prototype • Examples • Benefits • Topics • Draft framework • Framework version 1 Pilot Programme (extended into 2014): Companies and Investors Engagement with regulators and other stakeholders