Integrated Reporting Framework implementation and requirements, for a report that shows how your business creates value.

What it is

What is the Integrated Reporting Framework and what is it used for?

The Integrated Reporting Framework sets out how to prepare an integrated report: a concise communication about how an organisation's strategy, governance, performance and prospects, read against its external environment, lead to value being created, preserved or eroded over the short, medium and long term. Its primary audience is the providers of financial capital, though every stakeholder benefits. It was first published in 2013 and passed to the IFRS Foundation in August 2022 when the Foundation consolidated with the Value Reporting Foundation. The IASB and the ISSB now maintain it jointly, and their Chairs encourage companies to keep adopting it.

It is principles-based. It prescribes no key performance indicators and no measurement methods; instead it asks you to explain your business model, the resources and relationships it relies on, which it calls the capitals, and how they change as a result of what you do. IFRS S1 draws on its concepts, and ISSB disclosures can be placed inside an integrated report: the standards set what to disclose, the framework shapes the report that carries them.

Current version. The International <IR> Framework, January 2021, which applies to reporting periods commencing 1 January 2022, with earlier application welcome. The integrated report may stand alone or form a distinct, prominent part of another report, such as the front section of an annual report that includes the financial statements.

Who it is for

Who uses the Integrated Reporting Framework?

The framework was written for private-sector, for-profit companies of any size, and public sector and not-for-profit bodies can adapt it. Nobody is certified against it, so the reasons to adopt it come from the audience you report to. Organisations bring it to Sterling from four directions:

• Investors and lenders want the whole picture. Analysts, banks and development finance institutions ask how the strategy holds together and what it depends on.
• A customer, partner or tender asks how you create value. A coherent report lets you answer on governance, resilience and prospects consistently.
• Your regulator, exchange or governance code points to integrated reporting. Where local rules expect or encourage it, confirm exactly what they ask for before designing the report, and let your legal and company secretarial advisers confirm the obligations.
• Your group or parent company reports on an integrated basis. Subsidiaries must supply strategy, risk and capital information on the group's timetable and definitions.

Requirements

What are the main Integrated Reporting Framework requirements?

The framework has two parts. Part 1 explains how to use it and sets out the fundamental concepts: value creation for the organisation and for others, the six capitals (financial, manufactured, intellectual, human, social and relationship, and natural) and the process through which value is created, preserved or eroded. Part 2 describes the integrated report itself through seven guiding principles and eight content elements. A report said to follow the framework applies all its requirements, which appear in bold italic type, subject to limited exceptions. The content elements are connected questions, not a fixed table of contents:

• Organisational overview and external environment: what the organisation does and the circumstances in which it operates.
• Governance: how the governance structure supports the ability to create value in the short, medium and long term.
• Business model: what the organisation's business model is.
• Risks and opportunities: the specific risks and opportunities that affect the ability to create value over time, and how the organisation is dealing with them.
• Strategy and resource allocation: where the organisation wants to go and how it intends to get there.
• Performance: how far the strategic objectives for the period were achieved, and the outcomes in terms of effects on the capitals.
• Outlook: the challenges and uncertainties likely in pursuing the strategy, and their potential implications for the business model and future performance.
• Basis of preparation and presentation: how the organisation decides which matters to include and how they are quantified or evaluated.
• Guiding principles across all eight: strategic focus and future orientation, connectivity of information, stakeholder relationships, materiality, conciseness, reliability and completeness, and consistency and comparability.
• Responsibility for the report: a statement from those charged with governance acknowledging responsibility for its integrity and giving their view on whether it follows the framework; where law prevents such a statement, the report says so.

Putting it into practice

How do you implement the Integrated Reporting Framework?

An integrated report is the output of integrated thinking: the active consideration of how the organisation's operating and functional units relate to one another and to the capitals. The route therefore starts with management conversations and ends with a board-approved report. There is no certification body at the end of it.

1. 01
   Agree the purpose, audience and reporting boundary.Decide who the report is for, which entities and value chain relationships it covers, whether it stands alone or leads the annual report, and whether any listing or group rule applies.
2. 02
   Gap analysis: test current reporting against the framework.The gap analysis reviews the annual report, sustainability disclosures, risk registers and board reporting against the guiding principles and content elements, and agrees actions, owners and dates.
3. 03
   Map the business model and determine material matters.Workshops with management describe the business model and the capitals it draws on, then identify the matters that substantively affect the ability to create value and record the judgement.
4. 04
   Build the data, draft the report and review it.Define KPIs and their sources, connect strategy, risk and performance information, draft each content element, then run an internal review of the evidence trail before the board considers the draft.
5. 05
   Approve, publish and improve each cycle.Those charged with governance sign the responsibility statement, any assurance engagement your board chooses is completed, and lessons feed the next reporting period.

Check the route before you sign. No organisation can certify that a report follows this framework, so treat any offer of an "integrated reporting certificate" with caution. If you want independent assurance, appoint a qualified assurance provider separately from the team that prepares the report, and confirm the standard it will work to and the scope of its conclusion. The certification buyer's checklist

Cost

How much does Integrated Reporting Framework implementation cost?

The effort depends far more on the state of your information than on the length of the finished report. A listed company with a mature annual report needs different support from a private group reporting this way for the first time. Every Sterling proposal shows each component and states everything that is included.

Timeline

How long does it take to prepare a first integrated report?

Plan in months, typically four to eight for a first report, depending on your starting point and the reporting calendar. The pace is set by management decisions on the business model, material matters and KPIs, and by data covering a full reporting period; the drafting is rarely the bottleneck.

If your annual general meeting or results date is fixed, share it at the start and we will plan backwards from it, showing which decisions have to be made early.

Your engagement

What your Integrated Reporting Framework engagement includes

Sterling OS™ shapes the work. You choose one support level: Design™, where we guide your team as it builds the report and its evidence, or Drive™, where we manage the work and draft with your people. After the first report, Sustain™ keeps the cycle running, and Automate™ is Effivity, where the evidence lives.

• Scope, gap analysis and reporting plan

  Audience, boundary, responsibilities and a timetable tied to your results calendar, agreed before work starts.

• Business model, capitals and materiality

  Facilitated workshops and a recorded materiality process that management owns and can defend.

• Effivity ISO & GRC software

  KPIs, evidence, risks and approvals held in Effivity, included with the engagement at no additional cost.

• Training for everyone

  Internal auditor training for the people who review the evidence, as applicable to your standard, and preferential Sterling Academy access, including complimentary awareness training for your people as part of the engagement.

• Drafting support and internal review

  Content elements drafted or reviewed as agreed, with the evidence trail checked before the board sees the report.

• Assurance readiness

  Where your board chooses assurance, workpapers organised so the provider can test them efficiently.

Sterling does not certify, attest or assure integrated reports; your board approves the report and any assurance conclusion comes from an independent provider.

Often combined with

Standards organisations pair with Integrated Reporting Framework

• AA1000AA1000 implementation and requirements: apply the AccountAbility Principles and SES, then prepare for AA1000AS v3 assurance by a licensed provider.
• B Corp CertificationB Corp certification made clear: the new B Lab Standards, Foundation Requirements, seven Impact Topics, the audit route and how Sterling prepares you.
• CBAMCBAM compliance and requirements explained: authorised declarant status, the 50-tonne threshold, verified embedded emissions and how Sterling helps you prepare.
• CDPCDP disclosure consulting: a complete, evidenced response on climate, forests and water, prepared with your team.
• CSDDDCSDDD compliance and requirements after Omnibus I: scoping, risk-based due diligence, complaints, monitoring and the 2029 start, delivered in one all-inclusive proposal.
• CSRD / ESRSCSRD and ESRS Sustainability reporting consulting: double materiality, ESRS disclosures and data prepared for limited assurance of your statement.