The challenge
Lyttelton Port Company (LPC), the largest port in Aotearoa New Zealand’s South Island, wanted to tailor its reporting to better engage its main stakeholders. Following requests from investors, the Christchurch-based company brought in thinkstep-anz to help them develop an Integrated Report (<IR>) for 2022.
Integrated reporting: six capitals and value creation
Integrated Reporting uses the concepts of ‘capitals’ and ‘value creation’. Capitals take the form of:
- the resources and relationships an organisation needs to create its ‘outputs’ (goods and services)
- the wider social and environmental ‘outcomes’ the organisation wants to achieve.
There are six capitals: financial, manufactured, social and relational, intellectual, natural, and human. Taken together, these capitals (outputs and outcomes) represent the value an organisation creates.
How we helped Lyttleton Port Company
Step 1: understanding the starting point
We brought seven members of Lyttelton Port Company’s team together in a workshop to explain <IR’s> eleven requirements. These include:
- clearly articulating how the company is creating (or eroding) value
- identifying and connecting the issues that matter most to the company (its material issues)
- engaging stakeholders in the reporting process.
We then reviewed and prioritised LPC’s material issues. These included climate change and contributing to the local community. Our workshop highlighted that the LPC team understand their material issues well. They are well placed to develop their annual disclosures in an Integrated Report next year.
Step 2: producing the 2021 interim report using ‘capitals’
Developing the 2021 interim report is an important step to launching fully integrated reporting in 2022.
We showed the team how to create a business model using the <IR> capitals. We also introduced a value chain approach to help LPC map its activities: its core operations, upstream activities involving suppliers, and downstream activities involving customers. This approach will identify risks that the port company needs to manage to safeguard its six capitals, plus opportunities that will build them.
We then confirmed the steps involved in producing the 2021 interim report. This process highlighted that LPC is already well placed to share information about its capitals.
Step 3: producing the 2022 report using <IR>
Next, we turned our attention to the 2022 report. We identified gaps in the data available and developed a two-year roadmap to produce and develop <IR>.
On our advice, LPC’s external design agency attended the workshop. This will help the agency understand how they can best write and design an effective report.
How we are enabling Lyttleton Port Company to succeed sustainably
Our work has set a clear roadmap and framework to help LPC produce their 2021 interim report and an <IR> in 2022.
Improved reporting will help the business communicate with important stakeholders, including investors, local communities, and their own team. This will help LPC access investment funds, build relationships, strengthen its social licence to operate, and attract, engage, and retain employees.
Our work has also helped LPC reduce business risks and identify opportunities. This will help the company build its reputation and brand.