ACCA Strategic Professional · Advanced Performance Management · Sustainability
Orrin Textiles publishes an annual sustainability report. Investors complain that it lists many unrelated environmental statistics but does not explain how sustainability issues affect the company's ability to create value over the short, medium and long term. The company decides to adopt integrated reporting. Which feature is central to integrated reporting under the International Integrated Reporting Framework?
Integrated reporting centres on explaining how an organisation creates value over time, using the six capitals and showing the connectivity between strategy, performance, risks and prospects. It complements rather than replaces the financial statements and is not limited to non-financial data or legal compliance.
- AReporting solely on non-financial measures to avoid duplicating the financial statements
- BExplaining value creation using the six capitals and the connectivity of informationCorrect
- CReporting only on legal compliance with environmental regulations
- DReplacing the audited financial statements with a single concise report
Explanation
The framework centres on how an organisation creates value over time, through the six capitals (financial, manufactured, intellectual, human, social and relationship, natural) and connectivity of information. It supplements, not replaces, the financial statements and is not limited to non-financial or compliance matters.
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