Integrated reporting is a concise report showing how an organisation's strategy, governance and performance create value over time. It explains how the organisation uses and affects six capitals: financial, manufactured, intellectual, human, social and relationship, and natural. The framework was issued in 2013 and is now part of the IFRS Foundation.
The six capitals
The book explains value creation as an equation: capitals + inputs + business activities = outputs and outcomes. Outcomes add to or take away from the capitals.
Guiding principles
| Principle | What it means |
|---|---|
| Strategic focus and future orientation | Explain strategy, risks, business model and prospects |
| Connectivity of information | Show how the factors that affect value link together |
| Stakeholder relationships | Explain key stakeholders and how their needs are met |
| Materiality | Include what substantially affects value creation |
| Conciseness | Enough context, no clutter |
| Reliability and completeness | Balanced: good and bad news, free from material error |
| Consistency and comparability | Comparable over time and with others |
Sustainability and social reporting
Advantages
- Attracts investors and improves reputation
- Helps employees and customers choose
- Can support the share price and better governance
Limitations
- Costly to produce
- Timing problems
- Social and environmental impacts are hard to measure
- Risk of greenwashing
The ISSB issued IFRS S1 (general sustainability) and IFRS S2 (climate) in June 2023. The UK published its own UK Sustainability Reporting Standards (UK SRS S1 and S2), based on them, in February 2026. Requirements are still developing: check gov.uk and the FCA for who must report and when.
Integrated reporting in ACCA SBL
Reporting sits in governance (syllabus area B). Typical tasks ask whether a company should adopt integrated reporting, or how to report on a capital. Use the six capitals with case facts. For Historic Places (March 2025 pre-seen), natural and manufactured capital (historic sites), human capital (staff and 20,000 volunteers) and social capital (members and communities) would all feature.
FAQs
What is integrated reporting?
A concise report showing how an organisation's strategy, governance, performance and prospects lead to the creation, preservation or erosion of value over the short, medium and long term. It is aimed mainly at providers of financial capital.
What are the six capitals?
Financial, manufactured, intellectual, human, social and relationship, and natural capital. An integrated report shows how the organisation uses and affects each.
Who sets the Integrated Reporting Framework?
It was published by the International Integrated Reporting Council (IIRC) in 2013 and revised in 2021. Since 2022 it has been part of the IFRS Foundation, which also runs the ISSB.
What are the guiding principles of integrated reporting?
Strategic focus and future orientation; connectivity of information; stakeholder relationships; materiality; conciseness; reliability and completeness; and consistency and comparability.
What is the difference between integrated reporting and sustainability reporting?
Sustainability reporting focuses on environmental and social impacts and risks. Integrated reporting connects those with financial performance and strategy in one story of value creation.
Is integrated reporting mandatory in the UK?
No. UK companies must produce a strategic report and climate disclosures, and the UK has published Sustainability Reporting Standards based on the ISSB's IFRS S1 and S2. Integrated reporting itself is voluntary.