5 Key differences between integrated reporting framework and GRI
- NVS Pawan
- Jan 16
- 2 min read
Updated: Apr 22
Integrated Reporting <IR> Framework has been a groundbreaking shift in corporate reporting. By seamlessly integrating financial and non-financial parameters in reporting, along with their interdependencies, it provides a holistic view of an organization’s ability to generate value for its investors and other stakeholders. The advent of IFRS S1 and S2 have complemented the <IR> Framework in its ability to meeting investor needs for comparable, consistent and reliable information.
However, <IR> Framework is different from Sustainability Reporting Frameworks. The information contained in the Sustainability Report form a part of four of the six "capitals" of the <IR> Framework viz. Natural Capital, Human capital, Social and Relationships Capital and Intellectual Capital. The beauty of integrated reporting lies in drawing attention to the connection of the material sustainability information with the financial information. This connection is required by the investors to gauge the maturity of the entity in integrated thinking and assess its ability in long term value creation.
Below is a rundown of the key differences between <IR> Framework and GRIStandards, the most comprehensive and widely used standards and framework for sustainability reporting:
Sl. No | Point of difference | Integrated Reporting Framework | GRI |
|---|---|---|---|
1. | Philosophy | Integrated Thinking Principles: Entities can create tangible and intangible value for itself and other stakeholders over time if it can embrace the interrelatedness and interdependencies between the resources and relationships (capitals) it uses and affects | Principles of responsible business conduct: The purpose of an entity extends beyond generating economic wealth; it also lies in contributing to the mitigation of global challenges. |
2. | Objective | The objective is to provide a structured approach to the governing body of the entity to organization tailors its business model and assess its ability to create tangible and intangible value and sustaining it in the long term. | The objective is to provide transparency and increase accountability on how an entity contributes or aims to contribute (through its current and future impacts) to sustainable development. |
3. | Strategic Relevance | The Framework leads to integrated decision-making and actions at all levels of the entity in response to its external environment and the risks and opportunities it faces. | Sustainability information helps identify financial and reputational risks and opportunities related to the entity’s impacts and to assess its long-term success. |
4. | Audience | It focuses primarily on providers of financial capital (investors), particularly those with a long-term view. | It targets a wider stakeholder audience including investors, regulators, local community, employees etc. |
5. | Materiality | Any Information is material if it significantly affects the availability, quality and affordability of resources and relationships (capitals) upon which the entity depends or affects stakeholders’ perceptions of the entity in such a way that it has a significant business consequence. | Material Topics are defined as the most significant impacts (effects) on the environment, society and nation’s economy. These impacts indicate the entity’s contribution, negative or positive, to sustainable development. |
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