The Routledge Handbook of Integrated Reporting

Abstract

This chapter discusses the potential of integrated reporting for public sector organizations. It emphasises that the public sector is a useful context for exploring integrated reporting, given its societal and sustainability focus. Initially, the focus is on sustainability reporting and the evolution from this form of reporting to integrated reporting. The current status of integrated reporting in the public sector is then discussed. Further studies on integrated reporting and thinking in the public sector are needed to expand our knowledge and understanding of this mechanism and accordingly, the final section outlines future research opportunities.

The ungreening of integrated reporting: a reflection on regulatory capture

“…Researchers have identified the loss of focus on social and environmental matters in the development of integrated reporting (de Villiers et al, 2014). It has been argued this loss represents a betrayal of the sustainability agenda, and that this may be the reason that integrated reporting will ultimately fail to achieve its aim of changing corporate reporting (Flower, 2015;Deegan, 2020;Dumay, 2020;Flower, 2020). Guthrie et al (2017) see organisations as starting their integrated reporting journey from sustainability reporting.…”

“…Regulatory capture has been used in previous research to explain developments in accounting standard setting (Rahman, 1992;Godfrey and Langfield-Smith, 2005). It was applied to integrated reporting by Flower (2015Flower ( , 2020, who concluded that it was no MEDAR 30,3…”

“…The appearance of integrated reporting in the research agenda is relatively recent given that the IIRC was only formed in 2010. A common theme in the literature examining the development of the integrated reporting framework is the loss of the IIRC's original sustainability objective (Flower, 2015(Flower, , 2020Thomson, 2015;Dumay, 2020;Dumay et al, 2017;Deegan, 2020;La Torre et al, 2020). It has been suggested that the abandonment of the sustainability objective means integrated reporting will not produce any substantive change in business practice and will result in nothing more than business as usual (Deegan, 2020;Flower, 2020).…”

“…Therefore, it is argued that it is not possible to assess the completeness of the information included in reports prepared under this framework (Flower, 2015). Further, the IIRC's selection of the providers of financial capital as the primary user of integrated reports has been identified as problematic (Humphrey et al, 2017;Flower, 2015Flower, , 2020Deegan, 2020;Dumay, 2020;Dumay et al, 2017) as it reflects the capitalist ideology that created the planet's sustainability problems and it will affect the materiality of elements to be included in an integrated report. In particular, environmental impacts of the business may not be material for providers of financial capital, and integrated report preparers may choose not to include them on this basis.…”

“…In addition, in integrated reports there is no accountability for external effects, such as environmental impact, within the guiding principles (Flower, 2015;Deegan, 2020;Brown and Dillard, 2020). It has been argued that the IIRC has been captured by the accounting profession, which has resulted in an integrated reporting framework that will not promote any fundamental change in corporate behaviour (Flower, 2015(Flower, , 2020Deegan, 2020;Dumay, 2020). In contrast, Adams (2015) argues that sustainability was not a primary component of the IIRC's initial discussion paper on integrated reporting (IIRC, 2011) and, therefore, the IIRC cannot be accused of abandoning the sustainability objective.…”