Islamic Reporting Initiative (IRI) Invites Corporate Governance Leaders to Join Pilot Program
The Islamic Reporting Initiative (IRI) is inviting corporate governance leaders from the Middle East to participate in its groundbreaking pilot program. The IRI aims to support the sustainable development of Islamic businesses across various sectors, sizes, and geographies by providing practical tools for maximizing the potential of good corporate governance.
Business opportunity
Sustainable business practices have proven benefits, including cost reduction, improved risk management, enhanced reputation, and increased customer and employee loyalty. Companies also recognize the commercial advantages of higher sustainability ratings, such as better access to capital and favorable borrowing terms.
While sustainability reporting enables companies to measure and manage their progress effectively, many Muslim-majority countries have a lower number of companies producing sustainability reports compared to other regions. The IRI conducted extensive research on over 200 companies in these countries and found that mainstream reporting standards were often considered impractical and irrelevant in the local context.
To address this disparity, the IRI developed the Islamic Reporting Initiative, which aligns with Islamic values practiced by nearly 2 billion people for 1,400 years. The IRI reporting standard incorporates established Islamic principles that are deeply ingrained in Muslim-run organizations and easily relatable to employees in Muslim-majority countries.
Culturally relevant
Cultural relevance is a paramount consideration for the IRI reporting standard. It aligns with Islamic faith, lifestyle, and business practices, making it relatable to Muslims. The standard addresses important aspects such as Shari’a compliance, ablution facilities, prayer rooms, Ramadan support, and transparent reporting of charitable donations. These factors significantly impact employee satisfaction, retention, and organizational reputation.
The IRI reporting standard stands out as a unique approach compared to other sustainability standards. Significantly, the IRI emphasizes portraying a company’s sustainability through the lens of Islamic values. Given Islam’s inherent emphasis on social consciousness, adopting the Islamic reporting methodology is expected to be much more natural for Islamic companies compared to current mainstream standards, providing them with a powerful competitive advantage.
Partnerships and alliances have been crucial to the IRI’s development so far. The IRI’s members, Chairman, Board, Advisory Council, Shari’a council, and reporting standards body have made significant contributions. The IRI is a Signatory to the UN Global Compact and recently became an Observer to the governing body of the UN Environment Programme (UNEP) and joined UNEP’s Financial Initiative (UNEP FI).
A call to leaders in corporate governance
The IRI is now inviting companies with a robust sustainability/CSR/ESG track record and a commitment to the IRI’s growth to participate in the pilot program. Participants will support technical development, provide feedback, and collaborate on creating the first IRI reports using real sustainability data. A strategic software partnership will significantly reduce data processing time and provide a digital dashboard highlighting relevant sustainability data from an Islamic perspective.
Participants in the pilot program will also have the opportunity to become shareholders in the IRI Operating Company upon the launch of the finalized IRI Standard. The number of shares will be determined based on the participant’s level of involvement in the program.
Partners and Lead Partners will also have access to the first element of the IRI’s new AI-enabled tool for identifying areas of improvement and increasing sustainability performance. This tool utilizes artificial intelligence to analyze sustainability data and provide valuable insights for organizations. It assists in identifying strengths, weaknesses, and opportunities for improvement, allowing companies to further enhance their CSR and ESG performance effectively.
In summary
The Islamic Reporting Initiative offers a foundational standard for CSR and ESG that aligns with Islamic values and global standards. It aims to strengthen relationships and improve financial results across the Islamic world, benefiting companies through lower borrowing costs, improved access to capital, and better financial terms. To join the IRI journey and enroll in the pilot program, interested parties can contact iri@islamicreporting.org or visit the IRI website at https://islamicreporting.org/iri-pilot-program/.
