Integrated Reporting (IR) Flashcards
What is meant by Integrated Reporting, in it’s simplest form?
In it’s simplest form, it can be understood as the merging of the sustainability report and the financial report into a “single narrative”
What is the International Integrated Reporting Council’s (IIRC) definition of an integrated report?
“A concise communication about how an organisation’s strategy, governance, performance and prospects, in the context of the external environment, lead to the creation of value over the short, medium and long term”
What is the key emphasis of the definition of IR?
The idea of sustainable value creation
Makes the report and processes underpinning it far more valuable than simply a compliance or reporting exercise
What is the IIRC used for?
It is intended as guidance for all businesses producing integrated reports, rather than compliance with a set of rules
What are the “6 capitals” of integrated reporting?
Financial capital Manufactured capital Intellectual capital Human capital Social capital Natural capital
What are FOUR objectives for integrated reporting?
To improve the quality of information available to providers of financial capital - enabling a more efficient and productive allocation of capital
To support integrated thinking, decision making and actions that focus on the creation of value over the short, medium and long term
To enhance accountability and stewardship for the broad base of capitals and promote understanding of their inter-dependencies
How can an emphasis on the 6 capitals result in more focused performance management?
(chain - leads to…)
KPIs can be set up for each of the 6 capitals, ensuring that each of the drivers of sustainable value creation are monitored, controlled and developed
Show how the KPIs connect with different capitals, interact with and impact each other
Greater integration and cooperation between different functions and operations within the firm
Greater transparency of internal communications, allowing departments to better understand the wider implications of their activities
Together should result in better decision making and value creation in the longer term
