VicSuper’s investment team says its adoption of integrated reporting has allowed it to take a holistic view of performance, giving it a better understanding of risks and opportunities across the fund.
While the main purpose of integrated reporting is communicating total performance to members, the strategy has enabled the team at the $15 billion fund to broaden its understanding of what is happening in the business and the impact this could have on investment decisions, as a result of the breaking down of silos.
“Pulling together the report in this way allows us to have cross-functional conversations that wouldn’t otherwise happen,” said Kirsten Simpson, corporate responsibility manager at VicSuper, who was responsible for producing the report.
“When you cross-check material issues against strategy it’s a great pulse check. It becomes very clear whether you are actually dealing with the issues your stakeholders think are important, right from the strategic-plan level.”
The framework also introduced a number of different topic areas that are not traditionally disclosed in annual reports, including natural capital and social capital.
The investment team said this opened up avenues to tell members about what they were doing with investment managers and engagement specialists, particularly in the areas of ESG integration and influencing positive changes in corporate behaviour.
Two years ago, VicSuper’s annual report was 187 pages long; today it is 53 pages. Additionally, a conscious effort has been made to change the language to make it more accessible to members.
“Traditional annual reports are full of jargon and no-one reads them because they are hard to read, so we’ve really put a lot of effort in to being honest and simple in our language this year,” Simpson said.
She added that one of the false perceptions around integrated reports was that they are more work; but in practice they were actually less. She explained this was because reporting in alignment with strategy meant the information was already being tracked, making the collection much simpler.
“Reporting in alignment with your strategy is actually easier, as you already have all of the background information,” Simpson said.