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evaluate the concept of integrated reporting, highlighting its stated…

- - - - Six capitals
        IIRC wants companies to consider the effect of their operations on:
        MNFISH
        • Financial capital
        • Manufactured capital
        • Intellectual capital
        • Human capital
        • Social and relationship capital
        • Natural capital.
        
        Entities using integrated reporting are encouraged to focus on six capitals, and whether they have increased or reduced the value of each of these capitals. Capitals need not be owned by the entity. Reporting need not be in quantitative measurements.
        
        6 capitals!!!!
        
        The explicit recognition of six types of capital in the framework encourages organisations to consider the effect of their operations on each and how pursuit of financial value creation could be at the cost of other capitals.
    - - Seven guiding principles of IR:
        scsmcrc
        • Strategic focus and future orientation;
        • Connectivity of information;
        • Stakeholder relationships;
        • Materiality;
        • Conciseness;
        • Reliability and completeness; and
        • Consistency and comparability.
    - - Elements of Integrated Reports:
        • Organisation overview and its external environment
        • Governance
        • Business model
        • Risks and opportunities (and how the organisation is dealing with them)
        • Strategy and resource allocation
        • Performance (To what extent has the entity achieved its strategic objectives: what is the effect in terms of the six capitals?)
        • Outlook
        Basis of preparation and presentation (How does the entity decide what to include in the report and how are these items quantified/evaluated?)
    - - The business model is an important concept in integrated reporting.
        
        Business model = the entity’s system of transforming inputs through its business activities into outputs and outcomes that aim to fulfil its strategic purpose and create value in the short, medium and long term. (IIRC)
- - - -  Produce a stand-alone integrated report, in addition to statutory financial report and accounts.
         As an interim measure, publish the annual report and accounts and a sustainability report as a single document.
         Consider how existing reports can be adapted to accommodate the IR approach.
    - - • Organisational overview and external environment: What does the organization do and what are the circumstances under which it operates?
        • Governance: How does the organization’s governance structure support its ability to create value in the short, medium and long term?
        • Business model: What is the organization’s business model?
        • Risks and opportunities: What are the specific risks and opportunities that affect the organization’s ability to create value over the short, medium and long term, and how is the organization dealing with them?
        • Strategy and resource allocation: Where does the organization want to go and how does it intend to get there?
        • Performance: To what extent has the organization achieved its strategic objectives for the period and what are its outcomes in terms of effects on the capitals?
        • Outlook: What challenges and uncertainties is the organization likely to encounter in pursuing its strategy, and what are the potential implications for its business model and future performance?
        • Basis of preparation and presentation: How does the organization determine what matters to include in the integrated report and how are such matters quantified or evaluated?
        (IIRC 2013b, p. 5)
      - content priciples!!!!
      - Given the principles-based nature of the IR framework, integrated reports produced by companies differ in their form and content, although various common themes exist. Potter and Soderstrom (2014) identify and discuss five themes: Catig
        
        i. summarized and thematic discussion and reporting;
        ii. discussion of how social and environmental performance is integrated into management and decision making;
        iii. detailed discussion of governance;
        iv. separate consolidated financial, social, and environmental statements; and
        v. separate and limited or moderate assurance.
        
        Although the above might, in some respects, seem relatively consistent with information currently reported by companies, there are some important differences. For example, integrated reports commonly contain summarised and thematic discussion; diagrams, figures and metrics for financial, social and environmental performance; and stock market dividends and share information. Integrated reports typically include a discussion of how social and environmental performance
        is integrated into the management and decision-making of the company; they also map the company’s strategic goals to its initiatives, targets and performance
        
        Integrated reports typically also feature a detailed discussion of governance, which goes beyond a simple discussion of structures, processes and details of meetings held. Themes such as trust, transparency and ethics are common
  - - - This is clearly more narrow than the interests of the user groups that integrated reports are likely to actually serve, perhaps indicating the importance of meeting the needs of financial capital providers of IR if this form of reporting is to become the norm in future.