international integrated reporting council

Daniel Parker

2 min read

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19-03-2025

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The International Integrated Reporting Council (IIRC) was a global coalition dedicated to fostering the adoption of integrated reporting. Integrated reporting is a concise communication about how an organization's strategy, governance, performance, and prospects, in the context of its external environment, lead to the creation of value over the short, medium, and long term. While the IIRC itself has ceased operations (see below), its legacy and the principles of integrated reporting remain highly relevant.

What is Integrated Reporting?

Integrated reporting moves beyond traditional financial reporting to provide a more holistic view of an organization's performance. Instead of focusing solely on financial data, it incorporates six key capitals:

• Financial Capital: Traditional financial assets like cash and investments.
• Manufactured Capital: Physical assets like buildings and equipment.
• Intellectual Capital: Intangible assets like brands, patents, and copyrights.
• Human Capital: The skills and knowledge of employees.
• Social and Relationship Capital: Relationships with customers, suppliers, and the community.
• Natural Capital: Natural resources used by the organization.

By integrating these different capitals, integrated reporting offers a more comprehensive understanding of an organization's value creation process and its long-term sustainability.

Benefits of Integrated Reporting

The benefits of adopting integrated reporting extend to various stakeholders:

• Investors: Gain a more complete picture of an organization's risks and opportunities, leading to more informed investment decisions.
• Management: Enhanced strategic planning and improved internal communication through a more holistic view of the business.
• Employees: Greater transparency and understanding of the organization's purpose and strategy, boosting morale and engagement.
• Customers: Increased trust and confidence in the organization's sustainability and ethical practices.
• Suppliers: Improved communication and collaboration, leading to stronger relationships.
• Communities: Better understanding of the organization's impact on society and the environment.

The IIRC's Role and Legacy

The IIRC played a crucial role in developing and promoting the framework for integrated reporting. This involved creating the International Framework, which provides guidance on the content and presentation of integrated reports. The framework emphasizes materiality, ensuring that the information disclosed is relevant to the organization's strategy and value creation.

The IIRC also worked to foster a global movement towards the adoption of integrated reporting, collaborating with various organizations and governments to promote its principles and best practices.

The Dissolution of the IIRC

In 2021, the IIRC officially ceased operations. This decision came after a strategic review, recognizing the significant progress made in the adoption of integrated reporting and the need for a more sustainable model for continued development and support. The IIRC's intellectual property and resources have since been transitioned to the Value Reporting Foundation (VRF). The VRF continues to drive the development and use of integrated reporting, working towards aligning it with other sustainability reporting standards.

The Future of Integrated Reporting

Despite the dissolution of the IIRC, integrated reporting remains a vital tool for organizations to communicate their value creation story. The principles and the Framework continue to provide a strong foundation for organizations looking to report on their overall performance in a comprehensive and transparent manner. The ongoing work of the VRF, combining integrated reporting with Sustainability Accounting Standards Board (SASB) standards, aims to create a more unified and effective reporting system.

This consolidated approach reflects a broader shift in the corporate world toward more holistic and sustainable business practices, where environmental, social, and governance (ESG) factors are increasingly considered central to long-term value creation. The legacy of the IIRC lives on in this evolution, promoting a more comprehensive and informative approach to corporate reporting.