Integrated reporting

Integrated Reporting (<IR>)

Integrated reporting (’<IR>’) provides a conceptual framework for thinking about how you do business and how you communicate your long term value proposition to the market. It aims to promote trust in business, stimulating long-term investment, robust corporate governance and responsible capitalism which are at the top of business and government agendas.

An international initiative, <IR> has tended to be market-driven rather than regulated, although some jurisdictions have adopted the <IR> Framework (see below) on a ‘comply or explain’ basis.  <IR> is about empowering and encouraging businesses to explain and be transparent about how they create, preserve or erode value.  This is important both for the reasons above and also because the quality of a business’ information affects investors’ assessments about the quality of management.

But it’s not just about reporting. At the heart of the concept of <IR> is the notion of integrated thinking: the active consideration by an organisation of the relationships between its various operating and functional units, and the capitals (i.e. its key relationships and resources) that the organisation uses or affects. Integrated thinking leads to integrated decision-making and actions that consider the creation of value over the short, medium and long-term.

<IR> aims to:

  • Improve the quality of information available to providers of financial capital to enable a more efficient and productive allocation of capital
  • Promote a more cohesive and efficient approach to corporate reporting that draws on different reporting strands and communicates the full range of factors that materially affect the ability of an organisation to create value over time
  • Enhance accountability and stewardship for the broad base of capitals (financial, manufactured, intellectual, human, social and relationship, and natural) and promote understanding of their interdependencies
  • Support integrated thinking, decision-making and actions that focus on the creation of value over the short, medium and long term.

There are three fundamental concepts underpinning <IR>:

  1. Value creation, preservation or erosion for the organisation and for others. An organisation’s activities, its interactions and relationships, its outputs and the outcomes for the various capitals it uses and affects influence its ability to continue to draw on these capitals in a continuous cycle.
  2. The capitals. These are the resources and the relationships used and affected by the organisation, which are identified in the <IR> Framework as financial, manufactured, intellectual, human, social and relationship, and natural capital. However, these categories of capital are not required to be adopted in preparing an entity’s integrated report, and an integrated report may not cover all capitals – the focus is on capitals that are relevant to the entity.
  3. The value creation process. At the core of the value creation process is an entity’s business model, which draws on various capitals as inputs, and through the entity’s business activities, leads to outputs (products, services, by-products, waste) and outcomes (internal and external consequences for the capitals).

The <IR> Framework


The <IR> Framework was originally published by the International Integrated Reporting Council (IIRC) (previously the International Integrated Reporting Committee). The IIRC was formed in August 2010 and had the objective to create a globally accepted framework for a process that results in communication by an organisation about value creation over time.  In June 2021, the IIRC merged with the Sustainability Accounting Standards Board (SASB) to form the Value Reporting Foundation (VRF). The objective of the merger was to provide investors and corporates with a comprehensive corporate reporting framework across the full range of enterprise value drivers and standards to drive global sustainability performance. As such, the Framework was taken on by the VRF as one of its key resources and will now be maintained under its auspices.

The VRF has three key resources: Integrated Thinking Principles, the Integrated Reporting Framework (<IR> Framework) and the SASB Standards.

  • Integrated Thinking Principles: drive an improved understanding of how value is created, to enhance decision-making and actions by boards and management.
  • <IR> Framework: Integrated reporting is a process founded on integrated thinking for communicating how an organisation’s strategy, governance, performance and prospects lead to the creation of value in the short, medium and long term.
  • SASB Standards: Standards for disclosure of sustainability information to investors, by sector. SASB Standards identify issues most relevant to enterprise value creation across 77 industries.

In November 2021, it was announced that VRF will consolidate into the new International Sustainability Standards Board that the IFRS Foundation has established. This will be completed by June 2022.

History and development of the <IR> framework

After a consultation process, the IIRC published the first version of its International Integrated Reporting <IR> Framework (<IR> Framework) in December 2013. In February 2020, the IIRC launched a revision process and identified three key themes for the revision: a) business model considerations, b) responsibility for an integrated report, and c) charting a path forward. The third theme was not directly related to the revision but focused on future of corporate reporting, including extended assurance and the role of technology, and was intended to inform the IIRC’s longer-term strategy. In January 2021, the IIRC published revisions of the Framework that focused on a simplification of the required statement of responsibility for the integrated report, improved insight into the quality and integrity of the underlying reporting process, made a clearer distinction between outputs and outcomes, and a greater emphasis on the balanced reporting of outcomes and value preservation and erosion scenarios.

The current version of the Framework can be accessed on the VRF website.

The <IR> Framework is principles-based, designed with the objective of achieving an appropriate balance between allowing flexibility to take account of the individual circumstances of different organisations and the need for comparability.  The ‘building blocks’ of an integrated report are:

  • Guiding principles – which underpin the preparation of an integrated report, informing the content of the report and how information is presented; and
  • Content elements – the key categories of information required to be included in an integrated report under the Framework, presented as a series of questions rather than a prescriptive list of disclosures.

Further information on <IR> and the <IR> Framework can be found on this dedicated page.

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