Integrated Reporting: A New Way to Communicate Corporate Social Responsibility

Akvile Ignotaite, Ruslan Kovaliov


Purpose. The main purpose of the paper is to examine the influence of institutional theory on the adoption of integrated reporting among multinational corporations.

Methodology. The generalization and abstraction of scientific literature in researching the theories of social business responsibility, the influence of institutional environment on development of integrated reporting; the analysis of non-balanced sample of international corporations from 2012 and a logit methodology are used.

Results. Based on analysis of scientific literature institutional indicators are developed; logit methodology is applied to measure the impact of these indicators on the adoption of integrated reporting among international corporations; home country effect is identified; implications for practice and future studies are derived.

The theoretical contribution. Sustainability and corporate social responsibility (CSR) are a rising matter in corporate world. Lack of trust and changing public expectations has generated a new demand for corporate information and transparency. That is the reason why many worldwide leading international corporations started to integrate sustainability and CSR in their annual reports, which reflects the business practices related to social, environmental and economic perspectives by showing a holistic approach. Thus, integrated reports represent the long-term impacts of business activities in social, environmental and economic aspects. However the integrated reporting is volunteer, so it is hard to find the significant determinants what drives organizations to choose integrated reports. Institutional theory provides a helpful theoretical approach for understanding the adoption of integrated reporting practices among multinational corporations. According to institutional theory, companies operate in contexts that apply the institutional pressure and affect their behavior. This study suggests that institutional determinants are significant on country level. Having applied this model, the research has been carried out in determining the influence of institutional factors on the integration of corporate social responsibility into cohesive strategy.

Practical implications. According to policy recommendations, it may be important to establish national mechanisms that promote integrated reporting; management recommendations show the importance to integrate contextual factors into corporation’s strategy of sustainability reporting, in order to increase corporate transparency and legitimacy across firms located in similar institutional environments.

Keywords: integrated reporting, corporate social responsibility, institutional theory, disclosure practices.

Paper type: Theoretical paper.


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