Evidence of the take up of integrated reporting

Main points:

  • Most integrated reporters reference the GRI Standards
  • Integrated reporting is popular among SMEs
  • 85% of self-declared integrated reporters discuss at least four capitals
  • Japan is catching up with South Africa in terms of the number of integrated reporters

In depth research commissioned and just published by the French accounting regulator, Autorité des Normes Comptable, provides a definitive view of the global adoption of integrated reporting how it is spreading.

The research conducted by Delphine Gibassier, Carol Adams and  Tiphaine Jérôme drew on the GRI, IIRC – Black Sun, Corporate Register and “online-report” reporting databases and supplemented their reports with the list of companies on the Johannesburg Stock Exchange (which are required to produce integrated reports) and a list of Japanese companies known to follow the integrated reporting format.  From these sources a total of 1,367 reports were identified with financial years commencing in 2016 and ending in 2016 or 2017.  Reports did not have to be called an integrated report to be included in this collection – they simply have to be considered integrated reports by their preparers.  The reports were examined (‘coded’) for inclusion of the International <IR> Framework content elements including each of the six capitals plus inclusion of a materiality matrix and mention of the TCFD recommendations.

In terms of numbers of reporters, South Africa and Japan were out ahead, with the UK, Netherlands and Spain in the next group.  Industries with high intangibles, such as banking, are amongst the biggest reporters along with those with high environmental footprints, such as chemicals.  Interestingly 58% of those self-identifying as integrated reports are SMEs.  Most refer to the GRI and 29% mentioned the SDGs.

Of those organisations that did not mention the <IR> Framework, 12% still included at least five content elements (compared to 22% of those that did mention the <IR> Framework), the most common being the business model.  As for the capitals, 85% reported four or more with manufactured capital being the least reported.

The research provides further evidence that the influence of integrated reporting goes beyond organisations that say they are following the Framework.  Elements of it are increasingly being included in regulation (such as the UK strategic report requirements) and guidance (such as the ASX Corporate Governance Principles).  Further, Adams et al 2016 found evidence that organisations are increasingly linking their social investment activities and disclosures to their strategy and approach to value creation.

Delphine Gibassier

You can read the full report here.

See the blog about the report, Evidence that the ‘momentum phase’ is taking off on the IIRC’s website.

Tiphaine Jerome

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