The eagle has landed – and by "the eagle", I mean the draft of the world’s first integrated reporting framework. (See: In focus – Integrated reporting framework)

The International Integrated Reporting Council (IIRC), which is behind the creation of the framework, held launch events this month in 15 locations around the world including Canada, China, Germany, Hong Kong, South Africa, Switzerland, India, Brazil, Singapore, Australia, Japan, the UK and the US. This is a clear indicator of the growing reach this relatively new initiative already has.

This event is every bit the big deal it’s billed as, since Integrated Reporting (IR) represents a huge shift in corporate reporting. The last time any great significant innovation came to the world of reporting was in the 1980s, when companies – mainly in the chemical sector – began reporting on their environmental impact to try and improve their image.

The IIRC has made it clear it is not trying to compete with other forms of corporate reporting, and while that may be true it certainly does not mean it won’t come up with something better and more usable.

Current forms of corporate reporting are often seen as cluttered and indecipherable by analysts, investors and the wider stakeholder community. IR has a shot at changing this.

What the IR framework aims to do is concisely communicate how an organisation’s strategy, governance, performance and prospects lead to the creation of value in the short, medium and long-term. Overall, it’s a question of integrative as opposed to "silo" thinking.

The principles-based draft framework, which covers issues such as concepts of capital, the business model and value creation, is not without challenges. For example, it will require companies producing reports to work out what is material – and there are also questions over the provision of assurance.

For investors and stakeholders to have any sort of confidence that the information contained in their reports is accurate, assurance of some sort is going to be vital. There is an ongoing debate over who should provide that assurance, but it seems auditors are the right people for the job.

After all, they have been working with sustainability and CSR reports since they have been around, meaning they have built up substantial knowledge of accounting for non-financial information.

Why now
Like me, you may be wondering why IR has only just come to fruition when, even to a non-accountant such as me, it makes a lot of sense. Quite simply, the initiative is being driven by the market- and it only became clear when the global financial crisis hit, that a new form of reporting with fewer compliance requirements and more integrative thinking and decision-making was needed.

While there is some way to go before widespread adoption, this market-led initiative is certainly on its way. When the IR framework version 1.0 arrives later this year, there will no doubt be creases to iron out but with so much support from such a wide range of businesses, regulators, standard setters, accounting bodies and NGOs, I don’t doubt there will be a large uptake in the years to follow.