If you’re an investor relations professional, or interested in wider corporate communications, you’ll no doubt have heard the term integrated reporting (abbreviated to <IR> by the International Integrated Reporting Council (IIRC)) increasingly banded about over the past few years. So, what do you need to know?
Firstly, just what is <IR>? Well, the aforementioned IIRC – a coalition of businesses, regulators, securities exchanges and not-for-profit groups leading the development of integrated reporting – defines it thusly:
An integrated report is a concise communication about how an organization’s strategy, governance, performance and prospects lead to the creation of value over the short, medium and long term.
Further on from that, <IR> is a new attitude towards reporting, focused on improving financial stability and sustainability through sharing more information. They break everything down into capital; the six types of capital being financial, intellectual, manufactured, social, human, and natural. The end result being that investors and other stakeholders have a better understanding of a company and its future, and can make more informed decisions.
The focus of the IIRC over recent years has been to develop a global Framework for <IR> that is collaborative and consistent, so that it can be adopted worldwide and enable companies to bring more coherence and focus to their corporate reporting and better dialogue with their stakeholders.
In 2013, the development of <IR> and the <IR> Framework took a significant leap forward. Over 100 businesses from 23 countries have now participated in the IIRC’s Pilot Programme, which began in 2011 and runs until September 2014. Among those taking part are huge names including Coca-Cola, Microsoft and Marks & Spencer.
Alongside this programme, a three month consultation period was held between April and July 2013, which saw over 350 businesses contribute their feedback on a draft Framework released by the IIRC.
The combined findings of these schemes enabled the completion and release of the first full <IR> Framework in December 2013. This milestone in the evolution of <IR> was greeted by the IIRC’s Chief Executive, who said, “We have fired the starting gun on a period of global adoption that will begin in early 2014. We will use the Framework, together with examples and evidence of the business and investor case, to reach out to a wider pool of businesses who are seeking to adopt <IR> for the first time.”
Prepare to hear a lot more about <IR> throughout 2014 and beyond.