IIRC (International Integrated Reporting Council)
- Countries: Global
- Function: Promoted integrated reporting across multiple capitals (financial, manufactured, natural, human, social); now merged into ISSB
The International Integrated Reporting Council (IIRC) was established in 2010 as a global coalition of regulators, investors, companies, standard setters, accountants, and non-governmental organizations, with the mission of advancing a more coherent and holistic form of corporate reporting. The IIRC developed the Integrated Reporting (IR) Framework, a groundbreaking model designed to articulate how organizations create, preserve, or erode value over time by managing multiple forms of capital beyond just financial resources.
The IR Framework recognizes six interdependent capitals:
- Financial capital: Funds available to produce goods and services.
- Manufactured capital: Physical objects, and infrastructure used in production.
- Natural capital: Environmental resources, ecosystems, and biodiversity services.
- Human capital: Skills, competencies, and experience of employees.
- Social and relationship capital: Relationships with communities, customers, suppliers, and other stakeholders.
- Intellectual capital: Organizational knowledge, systems, brands, and intellectual property.
The IIRC’s core innovation was the emphasis on connectivity of information, requiring companies to explain how different capitals interact and affect long-term value creation. Unlike traditional sustainability reports, which often exist alongside but disconnected from financial statements, Integrated Reporting sought to unify narrative and quantitative disclosures into a strategic overview of an organization's resilience and adaptability.
Key principles of the IR Framework include:
- Strategic focus and future orientation: Explaining how the organization's strategy addresses the external environment and resource dependencies.
- Connectivity of information: Demonstrating the interdependencies between different capitals and operations.
- Stakeholder relationships: Identifying how an organization’s relationships influence and are influenced by its strategy and performance.
- Materiality: Disclosing matters that substantively affect the organization's ability to create value over time.
- Conciseness, reliability, and consistency: Ensuring reporting is accessible, verifiable, and comparable across reporting periods.
Integrated Reporting gained early traction in South Africa, where it became a listing requirement on the Johannesburg Stock Exchange, and expanded globally among large corporations seeking to demonstrate a more robust and transparent approach to long-term value creation. Academic research and institutional investors increasingly cited the IR Framework as essential for enhancing the quality of corporate disclosures, particularly regarding intangible value drivers.
In 2021, recognizing the need for consolidation in the fragmented ESG and sustainability reporting landscape, the IIRC merged with the Sustainability Accounting Standards Board (SASB) to form the Value Reporting Foundation (VRF). In 2022, the VRF was integrated into the International Financial Reporting Standards (IFRS) Foundation, directly supporting the creation of the International Sustainability Standards Board (ISSB).
Although the IIRC as a standalone organization no longer exists, the intellectual foundations it laid, particularly the multiple capitals concept and the integrated thinking model, continue to influence the design of global sustainability disclosure standards under the ISSB. The IR Framework remains actively referenced by companies seeking to align financial and sustainability reporting and to demonstrate value creation in an interconnected, multi-capital economic system.