Integrated Reporting: International Framework

The Integrated Reporting (IR) framework has been published. Integrated Reporting is voluntary and continues to be adopted by businesses around the world.  It aims to inform, by way of concise communication, as to how an “organisation’s strategy, governance, performance and prospects, in the context of its external environment, lead to the creation of value in the short, medium and long term.”

The IR framework is designed to support the preparation of reports by profit-making businesses, but can be adapted for use by public and not-for-profit organisations. It is stated in the framework that it 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 interdependencies;
• Support integrated thinking, decision-making and actions that focus on the creation of value over the short, medium and long term. IR is consistent with numerous developments.

To assist users in preparing a report the framework suggests eight “content elements” and poses the key question to consider when preparing a report. It also suggests the typical type of content that should be considered, and if appropriate, included in the report. The eight content elements are explained in section 4 and are:

• Organizational overview and external environment
• Governance
• Business model
• Risks and opportunities
• Strategy and resource allocation
• Performance
• Outlook
• Basis of preparation and presentation taking account of General reporting guidance

It is highlighted through the framework that an “integrated report is intended to be more than a summary of information in other communications” and its aim is to highlight “how value is created over time.”