International Integrated Reporting Framework (IIRF)

 

International Integrated Reporting Framework (IIRF)

The International Integrated Reporting Framework (IIRF) is a global reporting framework that aims to improve corporate reporting by promoting a more integrated approach to reporting on a company's value creation activities. The IIRF was developed by the International Integrated Reporting Council (IIRC) in response to the need for a more comprehensive reporting framework that provides a more complete picture of a company's performance and value creation activities.

The IIRF is based on the concept of integrated thinking, which is defined as the ability to understand how different parts of a company interact with each other to create value over time. The framework encourages companies to report on six key areas of value creation:

Financial capital: This includes the financial resources that a company uses to create value, such as revenue, profits, and cash flow.

Manufactured capital: This includes the physical assets that a company uses to create value, such as buildings, equipment, and infrastructure.

Intellectual capital: This includes the intangible assets that a company uses to create value, such as patents, trademarks, and intellectual property.

Human capital: This includes the knowledge, skills, and experience of a company's employees and management team.

Social and relationship capital: This includes the relationships that a company has with its stakeholders, including customers, suppliers, and the community.

Natural capital: This includes the natural resources that a company uses to create value, such as land, water, and air.

By reporting on these six areas of value creation, companies can provide stakeholders with a more comprehensive and holistic understanding of their performance and value creation activities.

The IIRF encourages companies to report on their strategy, governance, and performance in an integrated manner. This means that companies should provide a clear and concise narrative that explains how their strategy is aligned with their value creation activities, and how their governance processes ensure that value is created and protected over the long-term.

The IIRF also emphasizes the importance of stakeholder engagement and transparency. Companies are encouraged to engage with their stakeholders and to disclose information that is relevant and material to their performance and value creation activities. This includes providing information on the risks and opportunities that may impact their business, as well as their environmental, social, and governance (ESG) performance.

The IIRF has gained significant traction since its launch in 2013, with over 2,500 organizations from around the world publicly expressing their support for the framework. In addition, several countries, including South Africa, Japan, and the UK, have incorporated the IIRF into their national reporting requirements.

 

In conclusion, the IIRF is a global reporting framework that promotes a more integrated approach to corporate reporting. By encouraging companies to report on their value creation activities in a comprehensive and holistic manner, the IIRF provides stakeholders with a more complete picture of a company's performance and value creation activities. The IIRF emphasizes the importance of stakeholder engagement and transparency, and has gained significant traction since its launch in 2013.