Value creation model

What is the value creation model according to the international guidelines given by the International Integrated Reporting Council (IIRC)?

Integrated reporting makes it possible to combine material information pertaining to an organization’s strategy, approach to management, performance and future prospects in a way that reflects the financial, social and environmental context of an organization’s operations. The report depicts its approach to creating value over time while using the capital available to it. Capital is a resource which the organization can access and use to create value. Legally, however, it does not have to belong to the organization.

IIRC distinguishes the following six types of capital:

• Financial capital – resource containing funds that arises by providing funding through loans or grants, or is generated through operating activity. These funds include shareholder funds, equity and external capital;
• Intellectual capital – organization’s resource based on knowledge, experience, including among others intellectual property such as patents, copyrights, software, rights and licenses, the organization’s know how, motivation to improve and develop processes, leadership and cooperation and investments in new solutions and innovations facilitating development;
• Human capital – competences, know how, skills, experience and motivation of employees to develop and innovate, including the capacity of grasping and implementing the organization’s strategy;
• Social and relational capital – reputation, earned trust and the quality of relations with clients, communities and other stakeholders;
• Infrastructural capital – physical objects used by the organization in the process of producing goods or rendering services (branches, centers) as well as the distribution network formed by agents, private persons conducting agency activity and other partners cooperating with the PZU Group;
• Natural capital – renewable and unrenewable natural resources (including water, minerals and air as well as biodiversity and the protection of ecosystems) and processes whereby products or services are delivered.

How does the PZU Group create value?

What does that entail in practice?

How outputs and impact are measured?