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Why doesn’t the Integrated Reporting Framework use the same language used in IFRS S1, IFRS S2 and the IASB’s Exposure Draft Management Commentary? How do the concepts of ‘providers of financial capital’ and ‘capitals’ relate to those of ‘primary users’ and ‘resources and relationships’?

The Integrated Reporting Framework has become an IFRS Foundation resource following the Foundation’s consolidation with the Value Reporting Foundation, which included the International Integrated Reporting Council and the Sustainability Accounting Standards Board. Therefore, the language used in the Framework sometimes differs from that used in other IFRS Foundation documents, even if the meaning is the same.

Table 3—Terms used in the Integrated Reporting Framework compared with those used in other Foundation documents
 

Concept in the Integrated Reporting Framework Definition provided in the Integrated Reporting Framework Glossary Term (in bold) and definition or description provided in the Exposure Draft Management Commentary Term (in bold) and definition or description provided in IFRS S1 and IFRS S2
Capitals Stocks of value on which all organisations depend for their success as inputs to their business model, and which are increased, decreased or transformed through the organisation’s business activities and outputs. The capitals are categorised in the Integrated Reporting Framework as financial, manufactured, intellectual, human, social and relationship, and natural.

Resources and relationships

The resources and relationships on which the business model and strategy depend, including resources not recognised as assets in the entity’s financial statements.

 Resources and relationships that an entity depends on and affects by its activities and outputs can take various forms, such as natural, manufactured, intellectual, human, social or financial.
Providers of financial capital Equity and debt holders and others who provide financial capital, both existing and potential, including lenders and other creditors. This definition includes the ultimate beneficiaries of investments, collective asset owners and asset or fund managers. Investors and creditors
The primary users of an entity’s general purpose financial statements and management commentary —existing and potential investors, lenders and other creditors.
 Primary users of general purpose financial reports (primary users) or users of general purpose financial reports (users)
Existing and potential investors, lenders and other creditors.
Those charged with governance
 The person(s) or organisation(s) (eg the board of directors or a corporate trustee) with responsibility for overseeing the strategic direction of an organisation and its obligations with respect to accountability and stewardship. For some organisations and jurisdictions, those charged with governance might include executive management.

Management (and governing board)
According to the IASB’s Conceptual Framework for Financial Reporting, the term ‘management’ refers to management and the governing board of an entity unless specifically indicated otherwise.

 Governance body(s) (which can include a board, committee or equivalent body charged with governance) or individual(s) responsible for oversight of sustainability/climate-related risks and opportunities.