7 Guiding Principles of Integrated Reporting

Oct 11, 2022

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Integrated reporting has 7 Guiding Principles that act as the foundation of every report. The preparation and presentation of an Integrated Report when principles-based, ensures a higher level of quality, readability, and comparability between reports, in addition to encouraging integrated thinking within the organization.

Although Integrated thinking and reporting are gaining momentum, a lot of corporations are unsure how to inculcate the <IR> Framework into their corporate reports. We hope to raise awareness with this blog, giving our readers a brief look into the 7 guiding principles of Integrated Reporting and what they mean when your organization is working on its next Integrated Report.

The 7 Guiding Principles of Integrated Reporting are:

• Strategic Focus and Future Orientation
• Connectivity of information
• Stakeholder relationships
• Materiality
• Conciseness
• Reliability and Completeness
• Consistency and Comparability

Elaborating each principle of Integrated Reporting

• Strategic Focus and Future Orientation

Your Integrated Report should give readers insights into your organization’s strategy and its relation to your company’s ability to create value in the short, medium, and long term. This should be disclosed along with data and information on the use of capital and resulting impacts.

Giving insights on strategy and the future would include having to present risks, opportunities, and dependencies while elaborating on your organization’s market position and business model. Many Integrated Reports showcase the business model as an infographic that includes capital inputs, business processes/activities and the resulting outputs or impact on capital.

• Connectivity of Information

Your organization’s Integrated Report should provide a holistic picture of the combination, interrelatedness, and dependencies between the factors that affect your ability to create value over time.

The connectivity of information would be between the (a) content elements (b) the past, present, and future of the organization’s activities (c) the capitals and associated interdependencies or trade-offs (d) financial and related information (e) Quantitative and Qualitative information that represents the organization’s ability to create value (f) Management and board information (g) Information in other corporate reports from the organization that encourages consistency within the organization and its approach to reporting.

• Stakeholder Relationships

Your Integrated Report should provide readers with insights into the nature and quantity of your organization’s relationships with key stakeholders, including how and to what extent your organization understands, takes into account, and responds to the legitimate needs and interests of your stakeholders.

It cannot be understated how significant it is that organizations depend on stakeholder engagement to create value. Stakeholders, when engaged in an appropriate manner and across channels, can act as a sounding board for an organization that would be able to get insights on economic, environmental, and social matters that can impact its ability to create value.

• Materiality

Your integrated report should disclose information about matters that substantively affect the organization’s ability to create value over the short, medium, and long term.

Most organizations get a third-party consultant for their materiality assessment to get a balanced view of factors that are material to the organization. In addition to identifying relevant matters, materiality includes evaluating the importance of issues, prioritizing based on importance, determining the information that should be disclosed, and finally, understanding the boundaries of the report.

• Conciseness

It is evident that your integrated reporting should be done concisely. The intention should be to provide all material information in a manner that enhances readability and accessibility, while also engaging the reader’s interest.

This can be accomplished by sticking to relevant information and would require a balance between principles as there is the possibility of a conflict between conciseness and completeness & comparability. While conciseness is required, it is important to include information to help showcase the organization’s strategy, governance, performance, and prospects while reducing redundant information.

• Reliability and Completeness

Your organization’s integrated report should include all material matters, both positive and negative, in a balanced way and without material errors.

Enhancing the reliability of information and data that is disclosed in reports necessitates mechanisms for robust internal control and reporting systems, stakeholder engagements, internal audits, and external assurance. This principle depends on characteristics such as reliability, balance, freedom from material errors, completeness, cost/benefits, competitive advantage, and future-oriented information.

• Consistency and Comparability 

It is important that the information that you disclose in your integrated report is showcased on a basis that is consistent over a period of time. This would need to be done in a manner that allows for comparability with other organizations so as to showcase your company’s ability to create value over time.

Integrated Reporting done right with professional help

While organizations are not obligated to use all principles across their integrated report, these 7 principles are meant to guide organizations to achieve the ideal report. Usually, most organizations hire experts in the form of specialized design agencies to help ensure their integrated reports are aligned with the IR framework. One of these agencies is Report Yak which has the design chops and certified content teams to get your organization's message across in a transparent, clear, and concise manner! Check out our previous work, which includes award-winning reports such as annual reports, sustainability reports, ESG reports, impact reports, and integrated reports.