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ACCA Strategic Professional · Advanced Performance Management · Sustainability

Bluewater Shipping has produced a sustainability report listing over 120 environmental and social indicators, each with equal prominence. Investors complain they cannot see which matters affect the company's ability to create value. Which feature of integrated reporting would best address this weakness?

Applying materiality would address the problem. Integrated reporting requires disclosure of matters that substantially affect the organisation's ability to create value over the short, medium and long term, supporting conciseness and a focused report, rather than listing every indicator with equal weight or only favourable ones.

  1. AApplying materiality so only matters that substantially affect value creation in the short, medium and long term are includedCorrect
  2. BAdding further indicators to cover every stakeholder request
  3. CMoving all indicators to an appendix and removing the narrative
  4. DReporting only the indicators that show improvement from prior year

Explanation

Integrated reporting uses a materiality determination process and conciseness as guiding principles, focusing on matters that substantially affect the ability to create value. Adding more indicators worsens the problem, and reporting only favourable items breaches balance and completeness.

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