IIRC sees breakthrough on integrated reporting
In its annual report, the International Integrated Reporting Council has identified a series of milestones, or “breakthrough moments,” that demonstrate the growing acceptance of integrated reporting around the world.
Integrated reporting combines financial reporting with reporting on other aspects of a company, such as sustainability, governance, human capital and strategy. It was established in 2010 as a broad framework for long-term business and investment decisions.
The IIRC said it is currently in a “breakthrough phase” in moving towards the global adoption of integrated reporting, and the identification of the breakthrough moments in the report signals that the organization is preparing to move towards a new strategic phase in its development.
Breakthrough moments identified in the report include:
- Sixteen regulators around the world have recommended or moved to align with integrated reporting, with many corporate governance codes encouraging voluntary adoption, including in South Africa, Japan and Malaysia.
- The IIRC has produced a new blueprint showing how businesses can address the UN Sustainable Development Goals through integrated reporting.
- A practitioner network for integrated reporting in the United States has been created, known as the US <IR> Community.
- International Accounting Standards Board Chair Hans Hoogervorst has issued a statement saying that the International Integrated Reporting Framework is compatible with the IASB’s own conceptual framework.
- The International Federation of Accountants issued a categorical position statement that integrated reporting is the future for corporate reporting.
- Market feedback through a global feedback exercise demonstrating business has moved from awareness of integrated reporting to its implementation.
- Investors from across the world have signed a statement committing to investment decisions in line the IIRC’s objective of long-term value creation.
With voluntary adoption of integrated reporting having spread to 64 countries around the world, Big Four firm KPMG reported a 27 percent increase in integrated reports globally since 2015.
“The naming of a series of breakthrough moments, rather than one single event, is in tune with the complex, inter-connected business environment which is itself the compelling reason behind the extraordinary progress of integrated thinking and reporting,” IIRC CEO Richard Howitt said in a statement. “As this 2017 Integrated Report demonstrates, this is the year when we can see integrated reporting breaking through to become a staple of the reporting landscape worldwide.”
The next full meeting of the IIRC’s Council will occur on Oct. 4 in Paris, when plans for a new global strategic phase in the pathway to global adoption of integrated reporting are expected to be unveiled.
The IIRC unites more than 70 international organizations, with a common mission of making integrated reporting a global norm for companies. While IR has not yet caught on widely in the U.S., it is used increasingly in some parts of the world.
The council partnered with corporate reporting agency Smart Media, based in Sri Lanka, to develop the 2017 integrated report, including, for the first time, an interactive online HTML version of the annual report and an executive summary for mobile devices.
“Report preparers often seek help with communicating their story while meeting the need to be concise and complete,” said Smart Media chairman Dr. Vijith Kannangara in a statement. “The answer to resolving this apparent paradox is to provide stakeholders with a choice of channels in a manner that best suits them through a combination of on-line HTML, print, mobile or video. The IIRC’s Integrated Report 2017 does just that.”