The Integrated Reporting Movement: Meaning, Momentum, Motives, and Materiality

Chapter 7Report Quality

In Chapter 3, we identified company adoption of integrated reporting as the key indicator of momentum. In Chapter 2, however, we also discussed the difference between a “combined report” and a truly “integrated” report. In Chapter 6, we described how greenwashing occurs when companies are insufficiently disciplined in their development of what we call the Sustainable Value Matrix (SVM). It is not solely the absolute number of companies practicing integrated reporting, but the quality of adoption that matters. How thorough and comparable these integrated reports are begins with the quality of frameworks for integrated reporting and standards for reporting on nonfinancial information. Although companies may achieve a truly integrated report by other means, the effectiveness with which they apply these frameworks and standards will determine how useful these reports are to investors.

To assess report quality, we analyzed 124 listed companies' self-declared integrated reports in the context of the “Consultation Draft of The International <IR> Framework” (Consultation Draft), published in July 2013.¹ Sourced from Global Reporting Initiative (GRI) website via its “Sustainability Disclosure Database” on October 17, 2013, 100 were English-language reports of the 135 non-South African companies that had made this declaration. To these, we added the reports of the largest 24 South African listed companies by revenue. The analysis team began its work on October ...