International Integrated Reporting Council (IIRC)

Definition

The International Integrated Reporting Council (IIRC) is a global coalition of regulators, investors, companies, standard setters, and academics that promotes integrated reporting as a means to improve the quality of information available to stakeholders. By emphasizing the interconnectedness of financial and non-financial performance, the IIRC encourages organizations to create reports that reflect their strategy, governance, performance, and prospects in a way that enhances accountability and decision-making.

5 Must Know Facts For Your Next Test

1. The IIRC was established in 2010 to respond to the increasing demand for transparency and accountability in corporate reporting.
2. The IIRC's framework encourages companies to disclose how they create value over time through their strategies, governance models, and relationships with stakeholders.
3. Integrated reporting can enhance stakeholder engagement by providing a more comprehensive view of an organization's risks, opportunities, and overall performance.
4. The IIRC works collaboratively with other organizations and initiatives to harmonize reporting standards and frameworks globally.
5. Many jurisdictions are incorporating the principles of integrated reporting into their regulations and policies, pushing companies towards adopting this comprehensive reporting model.

Review Questions

• How does the IIRC's approach to integrated reporting influence the way organizations structure their sustainability reports?
  • The IIRC's approach promotes a holistic view of reporting that integrates both financial and non-financial aspects. Organizations are encouraged to structure their sustainability reports by demonstrating how various performance indicators relate to overall value creation. This interconnectedness helps stakeholders understand not only the outcomes but also the strategic processes behind them, leading to more informed decision-making.
• Discuss the role of the IIRC in shaping global sustainability reporting standards and frameworks.
  • The IIRC plays a crucial role in advancing integrated reporting as a widely accepted standard by fostering collaboration among key stakeholders like regulators, investors, and companies. By advocating for a unified framework, the IIRC helps align various sustainability reporting frameworks such as GRI and SASB standards. This alignment is essential for reducing confusion among companies about reporting requirements while enhancing transparency for stakeholders who seek reliable information across different organizations.
• Evaluate how integrated reporting promoted by the IIRC reflects the evolution of corporate sustainability practices in recent years.
  • Integrated reporting reflects the evolution of corporate sustainability practices by emphasizing a shift from siloed financial reporting to a more comprehensive understanding of organizational performance. As stakeholders increasingly demand transparency regarding both financial results and ESG impacts, the IIRC’s framework responds to this need by encouraging companies to articulate their long-term strategy and how they manage resources sustainably. This evolution marks a significant transition in corporate governance where value creation encompasses social and environmental responsibilities alongside traditional financial metrics.

Related terms

Integrated Reporting: A holistic approach to corporate reporting that combines financial and non-financial data to provide a comprehensive view of an organization's value creation over time.

Sustainability Reporting: The practice of disclosing an organization's environmental, social, and governance (ESG) performance to inform stakeholders about its sustainability practices and impacts.

Global Reporting Initiative (GRI): An international independent organization that provides a comprehensive framework for sustainability reporting, allowing organizations to communicate their impacts on the economy, environment, and society.