For me, an inclusive economic system means extending accountability beyond financial transactions and recognising that society impacts business.
An inclusive system seeks to enhance the value to business of all economic, human, social and environmental resources. It builds an understanding of the decisions and trade-offs, made over different time horizons, which impact an organization’s strategy and business model. Such a system cannot be achieved without an agreement that economies and businesses must account for the full range of capitals that contribute towards value creation over time.
Integrated Reporting helps facilitate this new, inclusive philosophy through the measurement, management and communication of a company’s strategy and performance. It yields more transparent reports that reveal the way in which companies draw upon multiple resources – financial, manufactured, human, intellectual, social and relationship, and natural – to create value over the short, medium and long term.
Inclusive capitalism is a system-wide extension of the internal changes that many businesses are already undertaking as a result of integrated thinking and reporting. I am hopeful that this new understanding – that finance, people, planet and knowledge are all inextricably linked – will result in the implementation of inclusive capitalism globally. In order for this to happen, enhanced governance and reporting systems that reflect our new understanding of connectivity must become embedded in capital markets.
Inclusive capitalism is a necessary shift to ensure financial stability and sustainable development in our 21st century markets. It helps create a marketplace characterised by open dialogue about strategy and resource allocation, thereby enabling investors to understand how the businesses in which they invest are addressing the great global challenges that we all face. This, in turn, will ensure better investment decisions over the short, medium and long term.
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