Integrated reporting remains a key goal for stakeholders interested in understanding an entity’s performance and future sustainability prospects. Momentum behind fulfilling this goal continues to build, as indicated by the 214 responses received to the International Integrated Reporting Council’s (IIRC) September 2011 discussion paper, Towards Integrated Reporting – Communicating value in the 21st century, which offered initial proposals for the development of an International Integrated Reporting Framework (IIRF).
Early analysis of the responses reveals overwhelming support for the concept, but also numerous questions, issues and concerns. For example, some big issues to be addressed include whether the proposed investor focus is appropriate, and the need for clarification about ‘value to whom’ – whether investors, stakeholders or society at large. There is also much debate about whether one concise report can meet different needs, and whether an integrated report should be the primary report. The IIRC is currently running a pilot programme underpinning the development of the IIRF, in which ACCA is participating.
Integrated reporting is fundamentally different to sustainability reporting in its focus on issues that are material to the business. ‘Integrated reporting should be the pinnacle of a company’s articulation of its approach to long-term value generation and not a response to a list of externally generated indicators,’ comments Chris Tuppen, a partner in Fronesys, an environmental, social, governance and sustainability consultancy. ‘It will be essential to focus on the key issues that combine long-term societal trends with business-related risks and opportunities. Achieving this will require an extended interpretation of the traditional accounting concept of materiality.’