The International Integrated Reporting Council has signed a memorandum of understanding with the Global Initiative for Sustainability Ratings in which the two groups pledge to work together to promote and support the global alignment of corporate reporting and ratings frameworks.
The MoU signifies the ongoing efforts of organizations in the corporate reporting sector to cooperate in driving greater coordination of reporting and ratings’ standards and frameworks globally. It recognizes a shared view among the two organizations that a more cohesive reporting landscape enables businesses to evolve their reporting practices, making them more resilient and leading to greater stability in global markets.
Integrated Reporting, also known as “
“I am delighted that we have signed this MoU with GISR,” said IIRC CEO Paul Druckman in a statement Monday. “The promotion by GISR of more powerful external communication relating to an ability to create value over the short, medium and long term is very much aligned with Integrated Reporting, and the Global Initiative for Sustainability Ratings is doing important work in assuring that businesses give this the attention it deserves.”
Integrated Reporting applies reporting principles and concepts that are focused on bringing greater cohesion and efficiency to the reporting process, and adopting “integrated thinking” as a way of breaking down internal silos and accelerating value creation.
The GISR focuses on driving increased transparency and effectiveness of sustainability ratings. The organization is working to mesh financial and sustainability information into a holistic approach to rating both credit and companies. In so doing, ratings will benefit directly from information flowing from integrated reports that use the International
The memorandum of understanding signed by Druckman and GISR founder Allen White outlines the basis for ongoing collaboration and alignment between the two organizations. Among other measures, the IIRC and the GISR have agreed to strive for complementarity and compatibility in the ongoing development of their respective frameworks and standards, and take proactive measures to work cooperatively to explore, articulate and advance the concept of “integrated ratings.”
“GISR’s vision is to transform the definition of corporate value in the 21st century such that markets reward the preservation and enhancement of all forms of capital,” White said in a statement. “Integrated Reporting is building a foundation for disclosures aligned with multiple capitals that will help company and credit ratings more accurately assess long-term performance. Together,
Druckman pointed out in an interview last week that integrated reporting encompasses more than just sustainability. “We have this concept of six capitals, and the sustainability elements are part of it,” he told Accounting Today. “But just as important is the intellectual property and the human capital as we call it, and brand, as well as core financials. So it really is an umbrella across all of the data and information that is already being reported. The idea is that all of that reporting at the moment, is it actually just data, or is it a report, a communication? We would say that predominantly it’s data and what we provide is the ability to communicate it.”
In addition to the GISR, the IIRC is also working with other sustainability reporting groups, such as the Sustainability Accounting Standards Board and the Global Reporting Initiative.
The full MoU with the GISR can be found here.