The IR Framework revision: Inspiring better integrated reporting
Since the framework’s release in December 2013, the International Integrated Reporting Council has focused on driving its widespread international adoption. Today there is strong and increasing momentum for integrated reporting and integrated thinking to become the norm within mainstream business practice.
A March 2017 consultation, which invited market feedback on the implementation of integrated reporting, confirmed that the Integrated Reporting Framework has stood the test of time. The "Summary Feedback Report" concluded, on the basis of over 400 wide-ranging submissions, that there would be no revision of the IR Framework before 2019.
However, the need for minor corrections and clarifications was identified in that consultation and, over the course of 2019, the IR Framework Panel, together with the IIRC’s board and council, considered a potential revision after 2019. The answer is now clear and the revision of the IR Framework kicked off on Feb. 20, 2020.
Topics under review
The conceptual thinking and principles on which the IR Framework were founded are still as relevant as when the IIRC formed 10 years ago. However, the simple progression of time, insights stemming from practical use, and wider market developments warrant a refresh of the IR Framework, rather than a wholesale overhaul.
One matter under review concerns the responsibility for an integrated report and, in particular, the current required statement from those charged with governance.
Another important matter relates to business model considerations, including the distinction between outputs and outcomes. We’ve also noticed a discrepancy between how the latter term is defined in the Framework versus how it is perceived and applied by report preparers. When the IR Framework was created, the term “outcomes” was intended — and still intends — to encompass what many others refer to as impacts.
At the time of writing, the term “impacts” lacks a broadly accepted definition among preparers, users and other stakeholders in the wider reporting ecosystem. The IR Framework panel is following these developments closely.
These and other themes are explored via three topic papers and adjoining online surveys. Responses to these topic papers will inform the current revision process, as well as the IIRC’s broader strategy. We’re conscious of demands on time, so the topic papers are short, standalone primers that allow respondents to decide what matters most to them. The three topic papers are open for consultation until March 20, 2020.
Following this period of focused engagement, the Framework panel will consider topic paper feedback and consult with the IIRC’s board and council on a draft version of the revised Framework. Starting in May, this draft will be exposed to 90 days of public consultation. Related roundtables will also be held in key markets around the world. Ultimately, our plan is to launch the revised IR Framework at the end of 2020, exactly seven years after it was first published.
The Framework itself is a core instrument in advancing the IIRC’s vision to align capital allocation and corporate behavior with the wider goals of financial stability and sustainable development through the cycle of integrated reporting and thinking.
The market’s voice is essential to the revision process because integrated reporting is, at its core, a market-led movement. On behalf of the IR Framework panel, I warmly encourage all stakeholders to participate in this timely and important moment in the integrated reporting journey.