Integrating reporting : an analysis of the extent of social environmental and ethical matters in corporate reporting.
Date
2014-03-03
Authors
Carels, Candice Melissa
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Abstract
Stakeholders are questioning the relevance and reliability of annual financial reports and their ability to provide sufficient insight to enable decisions about an organisation’s ability to operate sustainably in the future. This is especially concerning given the increasing challenges, which include environmental disasters, extreme weather conditions, HIV/Aids, deplorable working conditions and human rights injustices. Standalone reports, like the sustainability report, have been criticised for, firstly, not fully reflecting how sustainability issues influence the organisation’s operations and, secondly, for lacking a measure of integration with the strategic objectives of the firm and its financial performance. These corporate reporting challenges have highlighted the need for a more holistic, integrated form of accountability and business reporting model which merges financial and non-financial information in a meaningful, integrated manner.
This study concentrated on social, ethical and environmental disclosures (SEE). The integrated/annual reports of South African mining companies with a primary listing on the Johannesburg Securities Exchange (JSE) were analysed. Little by way of formal academic research on integrated reporting is evidenced by the call for submission of academic papers. Uncertainties in the area of integrated reporting range from understanding what the term integrated reporting means, to what a good integrated report looks like. This study therefore sought to provide an initial assessment of integrated reporting by examining the reports of a sample of listed South African mining companies.
Overall, the results indicated that most of the mining companies included in the study applied the principles of King III in relation to the issuing of an integrated report, despite certain reports being entitled an “annual report”. The results indicate that the quantum of disclosures related to social matters had increased to a greater extent than environmental and ethical disclosures over the five-year period. There is currently a greater presence of social and environmental disclosures in more sections of the integrated reports, evidencing greater levels of integration. All companies, regardless of size, appear to be committed to the principles of integrated reporting. This process is, however, a journey that companies appear to be embracing.