ICAS joins push to increase Integrated Reporting awareness
Anne Adrain, ICAS Assistant Director of Sustainability and Assurance, discusses the rise in Integrated Reporting.
Although many organisations in the UK may not yet be familiar or comfortable with the concept of Integrated Reporting (<IR>), some of the <IR> framework terminology and the guiding principles are appearing in an increasing number of annual reports.
Furthermore, the guidance drafted by the FRC on the content of the new strategic report in the UK, now required for all but small companies, encourages the inclusion of similar content to that in the <IR> framework.
<IR> applies integrated thinking, principles and concepts that are focused on bringing greater cohesion and efficiency to the reporting process. Its focus on value creation, and the 'six capitals' used by the business to create value over time, contributes towards a more financially stable global economy.
The ICAS 2014 Annual Review acknowledges our first step on the <IR> journey, referring to the six capitals in our value creation cycle.
Much of this success is down to the work that the International Integrated Reporting Council (IIRC) has been undertaking globally to increase awareness of the concept.
At an international level, particularly in South Africa, the standard of reporting is much more refined.
South Africa is leading the way as, since 2010, companies listed on the Johannesburg Stock Exchange have been required to produce an integrated report, or explain why they have not done so.
A survey undertaken by the South African Institute of Chartered Accountants highlighted that the integrated reporting requirement had encouraged organisations to embrace integrated thinking and 70 per cent of those surveyed reported improvements in the board's decision-making process as a result.
It is not only the listed environment that is embracing integrated reporting. The IIRC has established a Public Sector Pioneer Network. Many within this network believe that the increased transparency and focus on outcomes, rather than outputs, inherent in the integrated reporting initiative, satisfies the need for greater accountability to stakeholders (ie taxpayers) within this sector.
Although it is still relatively early days for this initiative, the shift in corporate reporting towards greater transparency and relevance, and the increasing use of terms such as "capitals" and "value creation", demonstrates that integrated reporting, and integrated thinking, have a key role to play in this process.