The role of Integrated Reporting in disclosing Sustainability Management

The paper aims to understand the role of Integrated Reporting (IR) in disclosing sustainability management by investigating how do firms communicate managerial aspects of corporate sustainability by adopting this innovative report. Performing a content analysis of the IR of European early adopters, the paper analyses both the corporate involvement in different dimensions of corporate sustainability (economic, social and environmental) and the presence of “leading” disclosure, that is information on how firms “manage” sustainability issues. Drawing on impression management framework, we further assess the quality of disclosure by investigating the extent to which firms communicate quantitative metrics (e.g. KPIs) and forward looking information (e.g. managerial forecasts). While the IIRC framework emphasizes the importance of reporting on “leading” indicators, quantified information and future prospects, the analysis shows that IR adopters offer a reasonable amount of “leading” disclosure but tend to be focused on narrative and backward oriented disclosure. The role that IR can play in developing communication of management aspects of sustainability performance cannot be concealed, but our evidences show that sustainability management and sustainability reporting are still far from being fully “integrated”.