Abstract
A worldwide debate on the effectiveness of business reporting information has engaged organizations, policy makers, regulators, and members of the capital market. The documents through which organizations disclose their annual performance are being questioned and criticized, as they appear inadequate for responding to stakeholder needs. In 2013, the International Integrated Reporting Council (IIRC) launched a project with the aim of redesigning corporate reporting processes and outputs, introducing integrated reporting (IR). At the center of IR are the six capitals defined by the IIRC representing the basis for an innovative form of evaluating and presenting performance. New topics on the global sustainable development agenda are growing in importance, requiring companies to enrich their disclosure and connect business to environment. In this study, we examined how a group of leaders in IR, 134 European companies from the IIRC IR reporters list, are currently disclosing IR capital and Sustainable Development Goals (SDGs), developing three evaluation scores: Capital Disclosure Index, SDG Disclosure Index, and SDG Compliance Index.
Highlights
The traditional structure, contents, and principles used by companies to measure and report their financial performance have been strongly debated and criticized, as they fail to correctly inform stakeholders and provide them with useful information [1,2,3]
Using a sample of 134 European companies listed in the integrated reporting (IR) database as IR reporters [http: //examples.integratedreporting.org/reporters?start=A&page=1], we aimed to assess the disclosure choices of these “best in class” companies, analyzing the level of disclosure of the capital defined by the International Integrated Reporting Council (IIRC) and of Sustainable Development Goals (SDGs)
The specific research questions that we addressed in this research were the following: Which IR capitals and SDGs are currently being disclosed by companies active in preparing IR? How do these organizations disclose information about SDGs? What is the level of their SDG disclosure?
Summary
The traditional structure, contents, and principles used by companies to measure and report their financial performance have been strongly debated and criticized, as they fail to correctly inform stakeholders and provide them with useful information [1,2,3]. Globalization has been an incredible opportunity for economic growth and financial returns, but its benefits have not been shared among society members, negatively affecting trust between stakeholders and companies, disconnecting players in the value creation process. An increasing number of organizations have started to innovate their reporting practices, enlarging the area of disclosure with information about sustainability and non-financial metrics. This has led to the enlargement of the value concept [4] and to the aspiration of integrating financial and non-financial information into one single report [5,6,7,8]. Integrated thinking leads to integrated decision-making and actions that consider the creation of value over the short, medium and long term
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