Integrated Reporting Framework integrated thinking and the application of

principles such as connectivity of information.

The Integrated Reporting Framework is used to
accelerate the adoption of integrated reporting across Integrated reporting is part of an evolving corporate
the world with an aim to: reporting system. This system is enabled by
● Improve information quality to enable a more comprehensive frameworks and standards, addressing
efficient and productive allocation of capital measurement and disclosure in relation to all capitals,
● Promote a cohesive, efficient approach to appropriate regulation and effective assurance.
corporate reporting ➔ consistent with developments in financial and
● Enhance accountability and stewardship for all other reporting
the capitals a company uses or affects and
promote understanding of their Integrated report also differs from other reports and
independencies communications in a number of ways. In particular, it
● Support integrated thinking, decision-making focuses on the ability of an organization to create value
and actions that focus on the creation of value in the short, medium and long term, and in so doing it:
over the short, medium and long term. ● Has a combined emphasis on conciseness,
strategic focus and future orientation, the
The Integrated Reporting Framework and Integrated connectivity of information and the capitals
Thinking Principles are maintained under the auspices and their interdependencies
of the IFRS Foundation, a global not-for-profit, public ● Emphasizes the importance of integrated
interest organisation established to develop high- thinking within the organization.
quality, understandable, enforceable and globally
accepted accounting and sustainability disclosure Integrated thinking
standards. ● the active consideration by an organization of
the relationships between its various operating
The Integrated Reporting Framework is used to connect and functional units and the capitals that the
financial statements and sustainability-related financial organization uses or affects.
disclosures. ● leads to integrated decision-making and
actions that consider the creation, preservation
The IFRS Foundation’s International Accounting or erosion of value over the short, medium and
Standards Board (IASB) and International Sustainability long term.
Standards Board (ISSB) are jointly responsible for the ● takes into account the connectivity and
Integrated Reporting Framework. interdependencies between the range of
factors that affect an organization’s ability to
About integrated reporting create value over time, including:
➔ The capitals that the organization
The IIRC’s long-term vision is a world in which uses or affects, and the critical
integrated thinking is embedded within mainstream interdependencies, including trade-
business practice in the public and private sectors, offs, between them
facilitated by integrated reporting as the corporate ➔ The capacity of the organization to
reporting norm. The cycle of integrated reporting and respond to key stakeholders’
thinking, resulting in efficient and productive capital legitimate needs and interests
allocation, will act as a force for financial stability and ➔ How the organization tailors its
sustainable development. business model and strategy to
respond to its external environment
Integrated reporting aims to: and the risks and opportunities
● Improve the quality of information available to it faces
providers of financial capital ➔ The organization’s activities,
● Promote a more cohesive and efficient performance (financial and other) and
approach to corporate reporting outcomes in terms of the capitals –
● Enhance accountability and stewardship for past, present and future.
the broad base of capitals and promote
understanding of their interdependencies The more that integrated thinking is embedded into an
● Support integrated thinking, decision-making organization’s activities, the more naturally will the
and actions that focus on the creation of value connectivity of information flow into management
over the short, medium and long term. reporting, analysis and decision-making. It also leads to
better integration of the information systems that
Integrated reporting support internal and external reporting
● consistent with numerous developments in andvcommunication, including preparation of the
corporate reporting taking place within national integrated report.
jurisdictions across the world.
● provides principles-based guidance for 1. Using the <IR> Framework
companies and other organizations wishing to
prepare an integrated report Integrated report defined
● accelerate individual initiatives and provide ● concise communication about how an
impetus to greater innovation in corporate organization’s strategy, governance,
reporting globally to unlock the benefits of performance and prospects, in the context of
integrated reporting, including the increased its external environment, lead to the creation,
efficiency of the reporting process itself. preservation or erosion of value over the short,
● over time, will become the corporate reporting medium and long term.
norm. This will be delivered by the process of ● should be prepared in accordance with the
<IR> Framework.
 increases, decreases or transformations of the
Objective of the <IR> Framework capitals
● establish Guiding Principles and Content ● That value has two interrelated aspects –
Elements value created, preserved or eroded for
● written primarily in the context of private ➔ The organization itself, which affects
sector, for-profit companies of any size but it financial returns to the providers of
can also be applied, adapted as necessary, by financial capital
public sector and not-for-profit organizations. ➔ Others (i.e. stakeholders and society
● identifies information to be included in an at large).
integrated report for use in assessing an ● The ability of an organization to create value
organization’s ability to create value; for itself is linked to the value it creates for
others.
Purpose and users of an integrated report ● Because value is created over different time
● explain to providers of financial capital how an horizons and for different stakeholders through
organization creates, preserves or erodes different capitals, it is unlikely to be created
value over time through the maximization of one capital while
disregarding the others.
A principles-based approach
● strike an appropriate balance between 2C The capitals
flexibility and prescription ● stocks of value that are increased, decreased
or transformed through the activities and
Quantitative and qualitative information outputs of the organization.
1. Quantitative indicators
● including key performance indicators Although organizations aim to create value overall, this
and monetized metrics, can involve the erosion of value stored in some
capitals, resulting in a net decrease to the overall
2. Quantitative indicators stock of capitals (i.e. value is eroded). In many cases,
● included in an integrated report whether the net effect is an increase or decrease (or
whenever it is practicable and neither, i.e. when value is preserved) will depend on the
relevant to do so: perspective chosen; as in the above example,
➔ The ability of the employees and employers might value training
organization to create value differently.
can best be reported on
through a combination of Categories and descriptions of the capitals
quantitative and qualitative Financial capital
information. ● The pool of funds that is:
➔ It is not the purpose of an ➔ Available to an organization for use in
integrated report to quantify the production of goods or the
or monetize the value of the provision of services
organization at a point in ➔ Obtained through financing
time, the value it creates, Manufactured capital
preserves or erodes over a ● Manufactured physical objects (as distinct
period, or its uses of or from natural physical objects) that are
effects on all the capitals. available to an organization for use in the
production of goods or the provision of
2. Fundamental Concepts services, including:
➔ underpin and reinforce the requirements and ➔ Buildings
guidance in the <IR> Framework. ➔ Equipment
➔ Infrastructure
2B Value is not created, preserved or eroded by or ● Manufactured capital is often created by other
within an organization alone. It is: organizations, but includes assets
● Influenced by the external environment manufactured by the reporting organization for
● Created through relationships with sale or when they are retained for its own use.
stakeholders Intellectual capital
● Dependent on various resources. ● Organizational, knowledge-based intangibles,
including:
An integrated report therefore aims to provide insight Intellectual property, such as patents, copyrights,
about: software, rights and licences
● The external environment that affects ➔ “Organizational capital” such as tacit
an organization knowledge, systems, procedures and
● The resources and the relationships used and protocols.
affected by the organization Human capital
● How the organization interacts with the ● People’s competencies, capabilities and
external environment and the capitals to experience, and their motivations to innovate,
create, preserve or erode value over the short, including their:
medium and long term. ➔ Alignment with and support for an
organization’s governance
Value creation, preservation or erosion for the framework, risk management
organization and for others approach, and ethical values
● Value created, preserved or eroded by an ➔ Ability to understand, develop and
organization over time manifests itself in implement an organization’s strategy
 ➔ Loyalties and motivations for reported concerning the present-to-future
improving processes, goods and period.
services, including their ability to ➔ explanation can be useful in
lead, manage and collaborate. analyzing current capabilities and the
Social and relationship capital quality of management.
● The institutions and the relationships within ● The capitals. This includes the
and between communities, groups of interdependencies and trade-offs between the
stakeholders and other networks, and the capitals, and how changes in their availability,
ability to share information to enhance quality and affordability affect the ability of the
individual and collective well-being. organization to create value.
● Social and relationship capital includes: ● Financial and other information
➔ Shared norms, and common values ● Quantitative and qualitative information.
and behaviours Both qualitative and quantitative information
➔ Key stakeholder relationships, and are necessary for an integrated report to
the trust and willingness to engage properly represent the organization’s ability to
➔ Intangibles associated with the brand create value as each provides context for the
and reputation other.
➔ An organization’s social licence to ● Management information, board
operate. information and information reported
Natural capital externallyInformation in the integrated
● All renewable and non-renewable report, information in the organization’s
environmental resources and processes that other communications, and information
provide goods or services that support the from other sources. This recognizes that all
past, current or future prosperity of an communications from the organization need to
organization. It includes: be consistent, and that information the
➔ Air, water, land, minerals and forests organization provides is not read in isolation
➔ Biodiversity and ecosystem health. but combined with information from other
sources when making assessments.
C. Stakeholder relationships
● An integrated report should provide insight into
the nature and quality of the organization’s
relationships with its key stakeholders,
including how and to what extent the
organization understands, takes into account
and responds to their legitimate needs and
interests.

Stakeholders provide useful insights about matters that

are important to them, including economic,
environmental and social issues that also affect the
ability of the organization to create value.
3. Guiding Principles
These insights can assist the organization to:
● Understand how stakeholders perceive value
A. Strategic focus and future orientation
● Identify trends that might not yet have come to
● An integrated report should provide insight into
general attention, but which are rising in
the organization’s strategy, and how it relates
significance
to the organization’s ability to create value in
● Identify material matters, including risks and
the short, medium and long term and to its use
opportunities
of and effects on the capitals.
● Develop and evaluate strategy
● includes clearly articulating how the continued
● Manage risks
availability, quality and affordability of
● Implement activities, including strategic and
significant capitals contribute to the
accountable responses to material matters.
organization’s ability to achieve its strategic
D. Materiality
objectives in the future and create value.
● An integrated report should disclose
information about matters that substantively
B. Connectivity of information
affect the organization’s ability to create value
● An integrated report should show a holistic
over the short, medium and long term.
picture of the combination, interrelatedness
and dependencies between the factors that
The materiality determination process
affect the organization’s ability to create value
➔ Identifying relevant matters based on their
over time.
ability to affect value creation
➔ Evaluating the importance of relevant matters
The key forms of connectivity of information
in terms of their known or potential effect on
include the connectivity between:
value creation
● The Content Elements. The integrated report
➔ Prioritizing the matters based on their relative
connects the Content Elements into a total
importance
picture that reflects the dynamic and systemic
➔ Determining the information to disclose about
interactions of the organization’s activities as a
material matters
whole.
● The past, present and future. An analysis by
Identifying relevant matters
the organization of its activities in the past-to-
● those that have, or may have, an effect on the
present period can provide useful information
organization’s ability to create value.
to assess the plausibility of what has been
 ● determined by considering their effect on the similar functions, and independent, external
organization’s strategy, governance, assurance
performance or prospects
Balance
Evaluating importance ● no bias in the selection or presentation of
● Not all relevant matters will be considered information
material
● evaluating the magnitude of the matter’s effect Important methods to ensure balance include:
and, if it is uncertain whether the matter will ➔ Selection of presentation formats that are not
occur, its likelihood of occurrence. likely to unduly or inappropriately influence
Magnitude assessments made on the basis of the
● evaluated by considering whether the matter’s integrated report
effect on strategy, governance, performance ➔ Giving equal consideration to both increases
or prospects is such that it has the potential to and decreases in the capitals, both strengths
substantially influence value creation, and weaknesses of the organization, both
preservation or erosion over time positive and negative performance, etc.
➔ requires judgement and will depend ➔ Reporting against previously reported targets,
on the nature of the matter in forecasts, projections and expectations.
question
Freedom from material error
In evaluating the magnitude of effect, the organization ● does not imply that the information is perfectly
considers: accurate in all respects. It does imply that:
● Quantitative and qualitative factors ➔ Processes and controls have been
● Financial, operational, strategic, reputational applied
and regulatory perspectives ➔ When information includes estimates,
● Area of the effect, be it internal or external this is clearly communicated, and the
● Time frame. nature and limitations of the
estimation process are explained.

Completeness
● includes all material information, both positive
and negative.
● Determining completeness includes
considering the extent of information disclosed
and its level of specificity or preciseness

Cost/benefit
● Information included in an integrated report is,
by nature, central to managing the business.
E. Conciseness Accordingly, if a matter is important to
● An integrated report should be concise managing the business, cost should not be a
● sufficient context to understand the factor in failing to obtain critical information to
organization’s strategy, governance, appropriately assess and manage the matter.
performance and prospects without being
burdened with less relevant information Competitive advantage
● an organization considers how to describe the
In achieving conciseness, an integrated report: essence of the matter without identifying
➔ Applies the materiality determination process specific information
➔ Follows a logical structure and includes ● the organization considers what advantage a
internal cross-references as appropriate to competitor could actually gain from information
limit repetition in an integrated report, and balances this
➔ May link to more detailed information, against the need for the integrated report to
information that does not change frequently, or achieve its primary purpose
external sources
➔ Expresses concepts clearly and in as few Future-oriented information
words as possible ● by nature more uncertain than historical
➔ Favours plain language over the use of jargon information.
or highly technical terminology
➔ Avoids highly generic disclosures that are not G. Consistency and comparability
specific to the organization. ● The information in an integrated report should
be presented:
F. Reliability and completeness ➔ On a basis that is consistent over
● An integrated report should include all material time
matters, both positive and negative, in a ➔ In a way that enables comparison
balanced way and without material error. with other organizations to the extent
it is material to the organization’s own
Reliability (faithful representation) ability to create value over time.
● affected by its balance and freedom from
material error Consistency
● enhanced by mechanisms such as robust ● Reporting policies are followed consistently
internal control and reporting systems, from one period to the next unless a change is
stakeholder engagement, internal audit or
 needed to improve the quality of information ● The legitimate needs and interests of key
reported. stakeholders
● includes reporting the same key performance ● Macro and micro economic conditions,
indicators if they continue to be material ● Market forces
across reporting periods. ● The speed and effect of technological change
● When a significant change has been made, ● Societal issues
the organization explains the reason for the ● Environmental challenges
change, describing (and quantifying if ● The legislative and regulatory environment in
practicable and material) its effect which the organization operates
● The political environment in countries where
Comparability the organization operates and other countries
Other powerful tools for enhancing comparability (in that may affect the ability of the organization to
both an integrated report itself and any detailed implement its strategy.
information that it links to) can include:
➔ Using benchmark data, such as industry or B. Governance
regional benchmarks ● An integrated report should answer the
➔ Presenting information in the form of ratios question: How does the organization’s
➔ Reporting quantitative indicators commonly governance structure support its ability to
used by other organizations with similar create value in the short, medium and long
activities, particularly when standardized term?
definitions are stipulated by an independent
organization. Such indicators are not, An integrated report provides insight about how such
however, included in an integrated report matters as the following are linked to its ability to create
unless they are relevant to the individual value:
circumstances of, and are used internally by, ● The organization’s leadership structure
the organization. ● Specific processes used to make strategic
decisions and to establish and monitor the
culture of the organization
4. Content Elements ● Particular actions those charged with
● fundamentally linked to each other and are not governance have taken to influence and
mutually exclusive monitor the strategic direction of the
● not intended to serve as a standard structure organization and its approach to risk
for an integrated report management
● information in an integrated report is presented ● How the organization’s culture, ethics and
in a way that makes the connections between values are reflected in its use of and effects on
the Content Elements apparent the capitals
● stated in the form of questions rather than as ● Whether the organization is implementing
checklists of specific disclosures governance practices that exceed legal
requirements
A. Organizational overview and external environment ● The responsibility those charged with
● An integrated report should answer the governance take for promoting and enabling
question: What does the organization do and innovation
what are the circumstances under which it ● How remuneration and incentives are linked to
operates? value creation in the short, medium and long
term
An integrated report identifies the organization’s
purpose, mission and vision, and provides essential C. Business model
context by identifying matters such as: ● An integrated report should answer the
● The organization’s: question: What is the organization’s business
➔ Culture, ethics and values model?
➔ Ownership and operating structure ● system of transforming inputs, through its
➔ Principal activities and markets business activities, into outputs and outcomes
➔ Competitive landscape and market
positioning An integrated report describes the business model,
➔ Position within the value chain. including key:
● Key quantitative information, highlighting, in ➔ Inputs
particular, significant changes from prior ➔ Business activities
periods ➔ Outputs
➔ the number of employees, revenue ➔ Outcomes
and number of countries in which the
organization operates Features that can enhance the effectiveness and
● Significant factors affecting the external readability of the description of the business model
environment and the organization’s response. include:
● Explicit identification of the key elements of the
External environment business model
● Significant factors affecting the external ● A simple diagram highlighting key elements,
environment include aspects of the legal, supported by a clear explanation of the
commercial, social, environmental and political relevance of those elements to the
context that affect the organization’s ability to organization
create value in the short, medium or long term. ● Narrative flow that is logical given the
particular circumstances of the organization
They may include, for example:
 ● Identification of critical stakeholder and other ➔ If key information about the matter is
dependencies and important factors affecting considered indeterminable
the external environment ➔ If significant loss of competitive
● Connection to information covered by other advantage would result
Content Elements ● Disclosures about the capitals
➔ determined by their effects on the
D. Risks and opportunities organization’s ability to create value
● An integrated report should answer the over time
question: What are the specific risks and ➔ Include the factors that affect their
opportunities that affect the organization’s availability, quality and affordability
ability to create value over the short, medium and the organization’s expectations
and long term, and how is the organization of its ability to produce flows
dealing with them? ● Time frames for short, medium and long term
● identifies the key risks and opportunities that ➔ decided by the organization with
are specific to the organization reference to its business and
investment cycles, its strategies, and
E. Strategy and resource allocation its key stakeholders’ legitimate needs
● An integrated report should answer the and interests.
question: Where does the organization want to ➔ Time frames differ by:
go and how does it intend to get there? • Industry or sector
• The nature of outcomes
F. Performance ● Aggregation and disaggregation
● An integrated report should answer the ➔ balancing the effort required to
question: To what extent has the organization disaggregate
achieved its strategic objectives for the period
and what are its outcomes in terms of effects
on the capitals? For the purpose of the <IR> Framework, unless stated
otherwise, the following terms have the meanings
An integrated report contains qualitative and attributed below:
quantitative information about performance that may
include matters such as: Business model
● Quantitative indicators with respect to targets ● system of transforming inputs through its
● The organization’s effects on the capitals business activities into outputs and outcomes
● The state of key stakeholder relationships Capitals
● The linkages between past and current ● Stocks of value
performance, and between current ● and which are increased, decreased or
performance and the organization’s outlook. transformed through the organization’s
business activities and outputs.
G. Outlook ● categorized in the <IR> Framework as
● An integrated report should answer the financial, manufactured, intellectual, human,
question: What challenges and uncertainties is social and relationship, and natural.
the organization likely to encounter in pursuing Content Elements
its strategy, and what are the potential ● categories of information required to be
implications for its business model and future included in an integrated report; the Content
performance? Elements
● are fundamentally linked to each other and are
H. Basis of preparation and presentation not mutually exclusive
● An integrated report should answer the ● are stated in the form of questions to be
question: How does the organization answered in a way that makes the
determine what matters to include in the relationships between them apparent.
integrated report and how are such matters Guiding Principles
quantified or evaluated? ● principles that underpin the preparation and
presentation of an integrated report, informing
An integrated report describes its basis of preparation the content of the report and how information
and presentation, including: is presented.
➔ A summary of the organization’s materiality Inputs
determination process ● The capitals that the organization draws upon
➔ A description of the reporting boundary and for its business activities.
how it has been determined Integrated report
➔ A summary of the significant frameworks and ● A concise communication about how an
methods used to quantify or evaluate material organization’s strategy, governance,
matters performance and prospects, in the context of
its external environment, lead to the creation,
preservation or erosion of value in the short,
5. General Reporting Guidance medium and long term.
Integrated reporting
The following general reporting matters are relevant to ● A process founded on integrated thinking
various Content Elements: ● results in a periodic integrated report by an
● Disclosure of material matters organization
➔ Key information Integrated thinking
➔ If there is uncertainty surrounding a ● The active consideration by an organization of
matter the relationships between its various operating
 and functional units and the capitals that the
organization uses or affects.
● leads to integrated decision-making and
actions
Material/materiality
● substantively affect the organization’s ability to
create value in the short, medium or long term.
Outcomes
● The internal and external consequences
(positive and negative) for the capitals

Outputs
● An organization’s products and services, and
any by-products and waste.
Performance
● An organization’s achievements relative to its
strategic objectives, and its outcomes in terms
of its effects on the capitals.
Providers of financial capital
● Equity and debt holders and others who
provide financial capital, both existing and
potential, including lenders and other creditors
● includes the ultimate beneficiaries of
investments, collective asset owners, and
asset or fund managers.
Reporting boundary
● The boundary within which matters are
considered relevant for inclusion
Stakeholders
● Those groups or individuals that can
reasonably be expected to be significantly
affected by an organization’s business
activities
● whose actions can reasonably be expected to
significantly affect the ability of the
organization to create value over time.
● may include providers of financial capital,
employees, customers, suppliers, business
partners, local communities, NGOs,
environmental groups, legislators, regulators
and policy-makers.
Strategy
● Strategic objectives together with the
strategies to achieve them.
Those charged with governance
● The person(s) or organization(s) (e.g. the
board of directors or a corporate trustee) with
responsibility for overseeing the strategic
direction of an organization and its obligations
with respect to accountability and stewardship.
● may include executive management (for some
organizations and jurisdictions)
Value creation, preservation or erosion
● The process that results in increases,
decreases or transformations of the capitals