Last month (January 2021) the International Integrated Reporting Council (IIRC) published some revisions to its framework. The framework is used by the council to accelerate the adoption of integrated reporting around the world and hasn't been revised since it was originally published in 2013.
The purpose of the recent revisions is to enable more decision-useful reporting. They are the result of a consultation with almost 1500 individuals across 55 jurisdictions. Essentially the consultation showed that the framework remained both robust and fit for purpose but that there was an opportunity to clarify concepts, simplify guidance for report preparers and underpin better quality integrated reports.
The revisions focus on a simplification of the required statement of responsibility for the integrated report; improved insight into the quality and integrity of the underlying reporting process; a clearer distinction between outputs and outcomes; and a greater emphasis on the balanced reporting of outcomes and value preservation and erosion scenarios.
IIRC chief technical officer Lisa French says: 'The revised framework better distinguishes between outputs and outcomes. Outcomes should be considered in the medium and long term. It has reinforced the need for balance; we wanted to encourage preparers to cover negative outcomes by referencing their effects on the capitals. We reinforced the robustness of the reporting and a reminder that disclosures are most effective if they include narrative and indicators. They provide important support to internal audit functions. The framework has been updated and refined but fundamentally we did not add any new requirements. The guiding principles remain intact. It is a small percentage change.'
The Integrated Reporting framework is being used by over 2500 organisations in over 70 countries, and as set out by the IIRC, the framework aims to:
- Improve the quality of information available to providers of financial capital to enable a more efficient and productive allocation of capital
- Promote a more cohesive and efficient approach to corporate reporting that draws on different reporting strands and communicates the full range of factors that materially affect the ability of an organization to create value over time
- Enhance accountability and stewardship for the broad base of capitals (financial, manufactured, intellectual, human, social and relationship, and natural) and promote understanding of their independencies
- Support integrated thinking, decision-making and actions that focus on the creation of value over the short, medium and long term.
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