International Integrated Reporting Council

Definition

The International Integrated Reporting Council (IIRC) is a global coalition of regulators, investors, companies, standard setters, and NGOs focused on promoting integrated reporting as a means to improve the overall quality of corporate reporting. The IIRC aims to create a framework that encourages organizations to communicate value creation in a holistic way, combining financial and non-financial information, which connects directly to various sustainability and reporting standards.

5 Must Know Facts For Your Next Test

1. The IIRC was founded in 2010 to help businesses communicate their value creation process more effectively to stakeholders.
2. The integrated reporting framework developed by the IIRC encourages companies to consider the interconnections between financial and non-financial performance.
3. The IIRC promotes integrated thinking as a way for organizations to break down silos and improve decision-making across departments.
4. Adopting integrated reporting can enhance transparency and accountability, making it easier for investors and stakeholders to assess a company's long-term sustainability.
5. The IIRC collaborates with other organizations like the Global Reporting Initiative (GRI) to harmonize various reporting standards and frameworks globally.

Review Questions

• How does the International Integrated Reporting Council influence corporate reporting practices?
  • The International Integrated Reporting Council influences corporate reporting practices by promoting integrated reporting as a framework that combines financial and non-financial information. This encourages companies to disclose how they create value over time, enhancing transparency and helping stakeholders understand the organization’s long-term strategy. By advocating for integrated thinking, the IIRC helps organizations break down departmental silos and improve decision-making processes.
• In what ways do the objectives of the International Integrated Reporting Council align with the goals of sustainability reporting?
  • The objectives of the International Integrated Reporting Council align with sustainability reporting by emphasizing the importance of integrating non-financial factors such as environmental, social, and governance (ESG) criteria into traditional financial reporting. By promoting a holistic view of value creation, the IIRC encourages organizations to disclose how their business practices impact society and the environment, which is central to sustainability efforts. This alignment helps stakeholders assess not only financial performance but also the broader implications of a company's activities.
• Evaluate how the work of the International Integrated Reporting Council contributes to the harmonization of non-financial reporting standards across different jurisdictions.
  • The work of the International Integrated Reporting Council significantly contributes to harmonizing non-financial reporting standards by fostering collaboration among various regulatory bodies, standard setters, and companies globally. By creating a comprehensive framework for integrated reporting that encompasses both financial and non-financial metrics, the IIRC helps bridge gaps between existing standards like GRI and ESG disclosures. This harmonization reduces confusion for organizations operating in multiple jurisdictions, enhances comparability for investors, and ultimately drives more consistent corporate accountability on sustainability issues.

Related terms

Integrated Reporting: A process that results in the publication of an integrated report that communicates an organization's strategy, governance, performance, and prospects in the context of its external environment.

Sustainability Reporting: The practice of measuring and disclosing an organization's economic, environmental, and social impacts, aimed at providing stakeholders with insights into the sustainability of the organization.

Accountability: The obligation of organizations to explain their decisions and actions to stakeholders, emphasizing transparency and responsible governance.