Integrated reporting: an international overview

• Author: Natalia Vaz,Belen Fernandez‐Feijoo,Silvia Ruiz
• DOI: http://doi.org/10.1111/beer.12125
• Date: 01 October 2016
• Published date: 01 October 2016

Integrated reporting: an

international overview

Natalia Vaz*, Belen Fernandez-Feijoo* and

Silvia Ruiz*

Universidad de Vigo, Spain

This article analyses the determinants associated with the use of the Integrated Report (IR) as a corporate

reporting model for sustainability information. IRs provide information regarding the use and

interdependence of different company resources. The previous literature has identified determinants behind

the presentation of IRs at the country level (legal system, investor protection, economic development, cultural

characteristics) as well as at the company level (size, industry, verification of the sustainability report).

Our work contributes to the literature by using a novel statistical approach that addresses the likelihood of

the non-independence of data: companies in the same country are more similar to one another than are

companies from different countries. Our results confirm significant inter-country variance, which may be

partially explained by the existence of specific regulations and the individualism vs. collectivism dimension.

Although we confirm the effect of company-level determinants, our results do not support the role of specific

variables tested as determinants.

Introduction

The objective of this article is to analyse the determi-

nants associated with the use of the Integrated

Report (IR) as a corporate reporting model for sus-

tainability information. Our analysis is at two levels:

the country level and the firm level. We focus on the

IR because it represents the next step in the evolution

of corporate reporting (Cohen & Simnett 2015) and

provides high potential for further research.

Corporate reporting seeks to communicate a com-

pany’s performance to its stakeholders. Voluntary

disclosure, a part of this communication process, has

grown exponentially over the last two decades (Kolk

2008, KPMG 2011) and has become a key issue for

regulators, accountants and researchers. To facilitate

a holistic understanding of the different types of

information disclosed, some companies publish IRs

to demonstrate the use and interdependence of their

different resources (financial, productive, human,

intellectual, social, or natural) and the outcomes of

their activities (products and services, effects on the

environment, social outcomes, and so forth). Thus,

the disclosed information can be used to improve the

long-term assessment of the company’s viability as

well as to identify possible uncertainties. As Eccles

and Krzus (2010) state, companies should produce

IRs because they play a key role in corporate social

responsibility (CSR) commitments and because a

true sustainability strategy requires a true commit-

ment to transparent reporting. According to KPMG

(2011), CSR must be integrated into a company’s

core business. The integration of CSR into corporate

strategy implies that tools should be designed to

manage and report on the business while also recog-

nizing that the IR ‘is not just a tool for internal and

external communication but also a formal account

of strategic process seeking continuous improve-

ments in the business culture’ (Perrini & Minoja

2008). Although the use of the IR as a reporting

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doi: 10.1111/beer.12125

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Business Ethics: A European Review

Volume 25 Number 4 October 2016