An agreement between the International Integrated Reporting Council (IIRC) and two organizations devoted to corporate environmental impact disclosures is the latest advancement in the growing momentum for integrated reporting worldwide.
The IIRC on Thursday announced that it has reached a Memorandum of Understanding (MoU) for cooperation with CDP, an international not-for-profit organization that specializes in measuring and sharing environmental information, as well as the Climate Disclosure Standards Board (CDSB), which is a special project launched by CDP.
The announcement comes on the heels of Monday’s closing of the comment period on the IIRC’s framework consultation draft, which is a blueprint for how the group hopes businesses will communicate with stakeholders. The comments will inform the initial version of the framework, which is scheduled to be published in December and will be updated periodically as integrated reporting evolves.
Integrated reporting efforts are designed to enable organizations to communicate how they draw on their resources and relationships to create and preserve value in the short, medium, and long term. The integrated reporting movement has gained momentum throughout this year with the publication of the framework draft and new IIRC cooperative agreements with several organizations.
In addition to CDP and the CDSB, the IIRC has announced MoUs with the International Accounting Standards Board, the Global Reporting Initiative, and the World Intellectual Capital Initiative since February.
“Integrated reporting is … supported by a growing number of providers of financial capital who see it as a way of increasing the relevance and value of corporate reporting, helping them to gain greater insights into the business model and outlook, which encourages longer-term investment decision-making,” IIRC CEO Paul Druckman wrote in a recent CGMA Magazine article.
The IIRC intends to work collaboratively with other reporting initiatives, frameworks, and innovators to provide more clarity to the market and increase momentum toward the adoption of integrated reporting, Druckman said in a news release Thursday.
The draft framework of the IIRC relies on existing reporting standards and approaches such as the CDSB-developed Climate Change Reporting Framework. A wide range of experts, including those from the global accounting profession, also have contributed to the IIRC’s draft framework.
CDP works with institutional investors to motivate companies to disclose their impacts on the environment and natural resources in an effort to reduce those impacts. The CDSB developed the Climate Change Reporting Framework to guide regulators who may be considering or developing climate change disclosure guidelines.
The AICPA and the Chartered Institute of Management Accountants, whose joint venture created the CGMA designation for management accountants, have supported the IIRC and integrated reporting.
—Ken Tysiac (firstname.lastname@example.org) is a JofA senior editor.