The International Accounting Standards Board (IASB) Chair Andreas Barckow and International Sustainability Standards Board (ISSB) Chair Emmanuel Faber have communicated plans for the future role, governance and development of the VRF’s Integrated Reporting Framework and Integrated Thinking Principles. This follows progress accomplished with the Value Reporting Foundation (VRF) consolidation process, and after the IFRS Foundation clarified its plans for the SASB Standards. These plans and the future role of the Integrated Reporting Council in the IFRS Foundation are:
The Integrated Reporting Framework
- The Integrated Reporting Framework will initially be seen as a voluntary resource for preparers and have a prominent place on the Foundation’s website.
- The Integrated Reporting Framework will form the materials of the IFRS Foundation.
- The IFRS Foundation and the Chairs of the IASB and ISSB are keenly promoting the continued adoption of the Integrated Reporting Framework by preparers.
- The Chairs and Vice-Chair(s) of the IASB and the ISSB undertake that the IASB and the ISSB (the boards) will collaborate as well as concurring on how to strengthen the Integrated Reporting Framework. This may consist of joint projects undertaken by the IASB and the ISSB to develop the Integrated Reporting Framework resulting in submitting materials applicable to both.
- On consolidation of the VRF, the IASB and the ISSB will take responsibility for the Integrated Reporting Framework.
Communication to the market
- To help market participants comprehend the process of transitioning the IRF to a resource used by both boards, as well as advocating for the use and development of Integrated Thinking Principles, the IFRS Foundation will conduct an engagement programme.
Building on the Integrated Reporting Framework
- The IASB and ISSB will use principles and concepts from the IRF Framework in their standard-setting work, (See 1). Comprising of sought opportunities to align and implement the concepts in the IRF with those of a similar nature in the IASB and SASB conceptual frameworks into one cohesive whole.
- Market consultation will allow for timing and approach to the progress of the Integrated Reporting Framework through the IFRS Foundation’s due process.
- It is recognised that there are similarities and differences between the Integrated Reporting Framework and Management Commentary. The Chairs of the IASB and ISSB commit to considering opportunities to address this.
- The Chairs of the IASB and ISSB are committed to a long-term role for a corporate reporting framework, incorporating principles and concepts from the current IRF. A corporate reporting framework would guide companies on drafting integrated reports and/or otherwise support connectivity between the reporting required by the IASB and the ISSB. This would enable fully comprehensive corporate reporting.
- The current Integrated Reporting Framework Board will conclude, based on consolidation of the VRF. Its members will be invited to participate in established advisory bodies for projects that build on the Integrated Reporting Framework to provide input on how principles and concepts from the Integrated Reporting Framework could be utilised.
The Integrated Thinking Principles
- The Integrated Thinking Principles will be statements of the IFRS Foundation and have a prominent place on the Foundation’s website.
- The IFRS Foundation and the Chairs of the IASB and the ISSB encourage the continued use of the Integrated Thinking Principles and engagement by stakeholders in order to enhance the quality of corporate governance and reporting.
The Integrated Reporting Council
- The Council will continue in this role till 2024. Subsequently, the need for a separate Council will be reviewed by the Trustees of the IFRS Foundation.
- The Integrated Reporting Council will become an advisory body to the IFRS Foundation Trustees and both boards beyond consolidation of the VRF. The Council will provide advice on further steps.
- The Council will also play a crucial role in providing input on the connectivity in the reporting required by the boards to enable the IFRS Foundation to supply a fully comprehensive reporting package to jurisdictions, supporting global adoption.
Statement by Andreas Barckow, Chair of the IASB, and Emmanuel Faber, Chair of the ISSB:
«We are convinced that the Integrated Reporting Framework drives high-quality corporate reporting and connectivity between financial statements and sustainability-related financial disclosures which improves the quality of information provided to investors. Therefore, we strongly encourage continued use of the Integrated Reporting Framework and the Integrated Thinking Principles underpinning it.»