International Integrated Reporting Council (IIRC)

Definition

The International Integrated Reporting Council (IIRC) is a global coalition of regulators, investors, companies, standard setters, and accounting professionals dedicated to promoting integrated reporting as a way to improve the reporting of corporate performance. The IIRC aims to enhance the quality of information available to stakeholders by encouraging organizations to provide a more holistic view of their strategy, governance, performance, and prospects in a way that reflects their ability to create value over time, which aligns closely with the concepts of People, Planet, and Profit.

5 Must Know Facts For Your Next Test

1. The IIRC was established in 2010 to address the need for better reporting frameworks that reflect both financial and non-financial information.
2. Integrated reports help organizations communicate how they create value for shareholders and stakeholders over time by connecting financial performance with social and environmental impacts.
3. The framework developed by the IIRC encourages organizations to adopt a long-term perspective in their reporting practices, enhancing accountability and transparency.
4. By promoting integrated thinking, the IIRC fosters a more sustainable business model that considers the interdependencies between financial performance and sustainability factors.
5. The IIRC's framework is aligned with the principles of the Triple Bottom Line, emphasizing the importance of balancing social (People), environmental (Planet), and economic (Profit) considerations.

Review Questions

• How does the IIRC's framework promote integrated thinking within organizations?
  • The IIRC's framework promotes integrated thinking by encouraging organizations to consider how their strategy, governance, performance, and prospects interconnect across financial and non-financial dimensions. This approach leads companies to assess their impact on social and environmental factors alongside economic outcomes. By adopting this holistic view, businesses are better equipped to make decisions that not only drive profit but also contribute positively to society and the environment.
• Discuss the significance of integrated reporting in relation to stakeholder engagement as promoted by the IIRC.
  • Integrated reporting significantly enhances stakeholder engagement by providing a comprehensive overview of an organization's strategy and performance. The IIRC emphasizes the importance of communicating effectively with all stakeholders by addressing their needs for relevant information regarding sustainability practices and corporate responsibility. This helps build trust and fosters stronger relationships with stakeholders who are increasingly interested in how organizations balance People, Planet, and Profit.
• Evaluate how the establishment of the IIRC has influenced corporate practices regarding sustainability reporting over time.
  • Since its establishment, the IIRC has had a profound impact on corporate practices related to sustainability reporting. By advocating for integrated reporting that encompasses both financial and non-financial metrics, companies have begun to shift towards more comprehensive reporting models that highlight their long-term value creation strategies. This transition encourages businesses to adopt sustainable practices as a core aspect of their operations rather than as peripheral activities. Consequently, organizations are now held more accountable for their impacts on society and the environment, aligning their objectives with broader sustainability goals.

Related terms

Integrated Reporting: A process that results in a periodic integrated report by an organization about value creation over time, incorporating financial and non-financial information.

Sustainability Reporting:

A form of reporting that discloses the environmental, social, and economic impacts of an organization, often focusing on sustainability performance.

Stakeholder Engagement:

The process by which organizations involve individuals or groups who may be affected by or can affect their activities, decisions, and policies.