Corporate Social Responsibility & Reporting

This assignment delves into the concepts of corporate social responsibility (CSR) and integrated reporting. It examines relevant research articles that discuss the role of CSR, the business case for CSR, non-financial reporting indicators, the impact of integrated reporting, and the influence of stakeholders in shaping sustainability practices.

Running Head: Integrated Corporate Reporting
CORPORATE REPORTING

Integrated Corporate Reporting 1
EXECUTIVE SUMMARY
This research is carried to understand the concept corporate reporting. It involves delivering
the necessary information to the stakeholders to make certain decisions. In traditional
corporate reporting entities prepares two reports to communicate its financial and non-
financial performance separately. However, this practice makes it difficult for the users of
reports to under the link between both the information and their combined impact on
company’s overall business. Financial reports contains the matters relating to company’s
financial performance and non-financial reports such as sustainability reports, corporate
social responsibility reports etc. The traditional reporting lacks the provision of information
relating to company’s strategies and processes for creation of value in future. Due to this
limitation the integrated form of reporting has been taken into effect. It deals with the
financial and non-financial performance reporting in the single document to make it more
consistent, comparable and convenient for the stakeholders. This report also deals with the
differences between the integrated and other non-financial reporting. As integrated reporting
covers the non-financial areas like reporting on sustainable value of the company and
therefore it has wider scope than any other reporting. The research paper also sets out the key
benefits and costs of integrated reporting. With the expanded reporting integrated approach
offers number of benefits but at the same it involves new costs to implement it. It further
explains the reactions of various stakeholders of the company to the integrated reports as
these reports influences the significantly the decisions of the readers.

Integrated Corporate Reporting 2
Table of Contents
EXECUTIVE SUMMARY...........................................................................................................................1
Introduction...........................................................................................................................................3
Answer 1: Traditional Corporate Reporting...........................................................................................3
Answer 2: Integrated Reporting and limitations of Traditional Corporate Reporting............................5
Answer 3: Differences between the Integrated Reporting and other Non-Financial Reporting............7
Answer 4: Costs And Benefits of the Integrated Reporting...................................................................8
Answer 5: Relevance of Integrated Reports for various Stakeholders...................................................9
Conclusion...........................................................................................................................................11
References...........................................................................................................................................12

Integrated Corporate Reporting 3
Introduction:
Corporate reporting is all about disclosing and communicating the significant information
relating to the company with its stakeholders. It includes financial reporting sustainability
reporting, corporate social reporting and other integrated reporting. Stakeholders are the
external parties and hence they do not participate in the internal functioning of the company.
Yet, they are directly or indirectly associated with the company and therefore demands the
provision of the necessary information about company’s performance and other related
matters on time to time basis. This information helps the stakeholders in their decision
making on the matters in which they are associated with the company. With the growing
business complexities the scope of stakeholders has been increasing and includes not only the
shareholders and investors of the company but also other external or internal parities that are
directly or indirectly linked with the company. As traditional reporting is not fully capable to
meet the social and environmental challenges it has now moved to integrated reporting
requiring the companies to provide additional information about its non-financial
performance along with the financial reports. The annual reports are therefore made more
comprehensive to meet the stakeholder’s demands of more information about the company.
Answer 1: Traditional Corporate Reporting:
Traditional corporate reporting involves disclosure of financial as well as non–financial
information in the reports prepared and presented by the corporations to deliver to the
stakeholders the required information (Jensen & Berg, 2012). Financial disclosures covers the
matters relating to the company’s financial performance and situation and hence are
necessary for the providers of the finance such as investors, shareholders etc. Non-financial

Integrated Corporate Reporting 4
information covers the social, environmental and governance concerns relating to the
company (Frias‐Aceituno, Rodriguez‐Ariza & Garcia‐Sanchez, 2013). Under traditional
reporting, companies use financial reports to disclose the financial matters and to report its
performance in social, environmental and governance areas, companies prepares corporate
social responsibility reports, sustainability reports etc. Corporate social responsibility is the
company’s obligation to take some initiatives in the interest of its society such as doing
charity, donations etc. to protect the society and its environment. CSR reporting is one of the
non-financial areas where performance of the entity can be judged by the stakeholders before
deciding their engagement with the company. It is not merely about communicating the
matters concerning about environmental value but is also extended to the reporting of the
business ethics and the efforts and contributions that a company makes to promote employee
relationships, human rights and for the social well-being. Sustainability reporting is also the
non-financial reporting which aims at communicating the manner in which the company
deals with the environment and its resources while operating its business to create value in
future. With the changes in the environment in which businesses are conducted, corporate
reporting has also been drastically undergone several transformation (Eccles, 2012). In order
to adapt the changing landscape of technological, social, economic and governmental drivers
due to globalisation and other factors and also to meet the growing need of information of the
stakeholders of the company traditional corporate reporting is continuously upgrading itself.
The changing corporate environment necessitates the provision of further information beyond
the core financial statements so as to enable the investors and other stakeholders to evaluate
and understand the entity’s capacity to create value in future (Carroll & Shabana, 2010). The
traditional financial reporting is not sufficient for the investors as they lack relevant
information about the future activities that has significant impact on the value creation.
Moreover, traditional reporting is divided into parts. One is financial reporting which

Integrated Corporate Reporting 5
specifically emphasises on the reporting of financial performance of the company and other is
environmental, social and governance reporting particularly focuses on reporting the
information that is non-financial. The separated reports on the financial and non-financial
makes it difficult for the users to understand the connection the financial performance and
non-financial performance. Therefore, the current corporate reporting needs certain changes
to deal with the social and environmental challenges.
Answer 2: Integrated Reporting and limitations of
traditional corporate reporting
Integrated reporting is the improved process of reporting and communicating with its
stakeholders on the matters of financial wealth and value creation to be done over time. The
integrated reports are concise reports communicating the corporation’s performance,
strategies and other prospects that leads to the value creation in short as well as long term. It
has a holistic and integrated coverage of corporation’s performance in the financial areas and
in sustainability aimed at promoting greater transparency (Adams, 2015). Unlike traditional
corporate reporting, integrated reporting uses a single document containing information
relating to financial and non-financial data of the corporation. This approach of reporting is
developed to meet the increasing demand of information by the stakeholders of the company.
With the changing economy the concept of stakeholders of the corporation has been widened
to include not only the traditional shareholders and investors but also the other elements like
the employees, customers, suppliers, business communities, regulatory and other
governmental bodies etc. (Adams, 2015). The increased sense of all the stakeholders of the
companies to enhance its reporting in the financial and non-financial areas calls for the
additional information to be provided to them. Non-financial reporting covers the

Integrated Corporate Reporting 6
environmental, social and governmental concerns (Herzig & Schaltegger, 2011). Integrated
reporting helps the corporations in strategically managing its core operations and reputation
to its stakeholders and in preparing them well in advance to deal with the risks that may
negatively influence its sustainability in long term. The disclosures that are made by the
companies through these reports must be both retrospective and prospective so as to meet the
needs of its existing and potential investors (Adams & Simnett, 2011). As single report is
issued under integrated reporting it becomes easy for the users to understand the impact of
financial performance of the company on its long term sustainability and vice-versa. This
type of reporting promotes greater level of transparency about the company’s functioning
making it easier for the stakeholders to take informed decisions on certain matters.
The investors claims that the traditional financial reporting is not sufficient for their
decision makings as they lack relevant information about the future activities that has
significant impact on the value creation. It leads to confusion among the investors and the
other stakeholders. Traditional corporate reports are not only lacking the sufficient
information about the company but also it is difficult for the users of the reports to make
comparison between the different corporations of the industry. The disclosures made in the
traditional reporting has a limited coverage of the issues that are of user significance to make
the severe decisions. The traditional environmental social and governance reporting also
lacks the clarity in its disclosures made to the stakeholders which makes it difficult for the
stakeholders to understand the company’s standing in dealing with areas of corporate social
responsibility and sustainability. Whereas integrated reporting covers the significant matters
more widely so as to enable the investors and other stakeholders to take informed decision
regarding their capital allocation.

Integrated Corporate Reporting 7
Answer 3: Differences between the Integrated
Reporting and other Non-Financial Reporting
Sustainability reporting and CSR reporting are the subsets of integrated reporting hence they
contain narrow disclosures than that of integrated reports. Global reporting initiatives
explains sustainability reporting as a practice of contributing to the sustainable growth of the
economy. Sustainable reporting is communicating to all the stakeholders whether internal or
external, about the approach of organisation in dealing with the key issues in the
environmental and social areas. It covers the non-financial dimension used to evaluate the
company’s performance (Schneider, Wilson & Rosenbeck, 2010). These kinds of reporting
helps the firm to maintain its reputation in the market by generating greater level of trust and
confidence of the general public. Whereas the integrated reporting has a wider approach as it
deals with both financial and non-financial performance of the company. It provides the
stakeholders with the information about how capable is company to manage its value creation
over a period of time through the financial and non-financial performance. Rather than
reporting on financial and sustainability performance separately, integrated reporting aims at
integrating the social and environmental issues into the business of company (Bénabou, R.
and Tirole, J., 2010). Integrated report extends beyond the data relating to finance, social,
environmental concerns to indicate how the corporations integrates the broader risks in
relation to the above concerns into its strategies meant for long term to undertake risk
management. Sustainability reporting, corporate social reporting and governance reporting
are the main constituents of integrated reporting as they reflect the company’s ability for
value creation. These non-financial reporting although provides the relevant information yet
criticised by the stakeholders as they are not comprehensive and they alone cannot help the
stakeholders in making several decisions and judgements about companies. Moreover, the
environmental social and governance reports provided through non-financial reporting are not

Integrated Corporate Reporting 8
as accessible as the financial information as the performance in these non-financial areas is
difficult to quantify. Further, the sustainability reports are generally backward looking and
fails to connect the sustainability of the company with its core strategy.
Answer 4: Costs And Benefits of the Integrated
Reporting.
Integrated reporting has gained so much of attraction in the eyes of companies in today’s
economy as they have now realised the importance of maintaining and promoting the
transparency in their operations and to gain the confidence of the stakeholders. Moreover, the
providers of finance, business communities and the regulatory bodies have also understood
the significance of non -financial performance of the corporations while making critical
decisions regarding the allocation of resources to the company’s business.
First, it provides the concise reports to understand and evaluate the company’s performance
considering the financial as well as non-financial dimensions in a better way. Integrated
reports offers the single document to evaluate the company’s performance in both the areas
thereby enabling the readers to understand the link both the aspects. This approach develops
the understanding of the stakeholders about the capacity of the company for the value
creation over the short and long term. Further, integrated reporting reduces the reputational
risk (Sierra‐García, Zorio‐Grima, García‐Benau, 2015). It aims at bridging the gap between
expectations of the stakeholders and the reality of the company through the integrated reports
by communicating the matters relating to its vision, mission, performance and position of the
company more clearly and holistically in terms of finance and sustainability (Eccles &
Serafeim, 2014). These reports can be used as the means of improving the stakeholder
relationships with the company. Moreover, integrated reporting also helps in improving the

Integrated Corporate Reporting 9
system of internal measurement and control so as to provide the relevant non-financial
information (Moser & Martin, 2012). While delivering the information about how a
corporation contributes for the well-being of its society and how it creates its sustainable
value, the integrated reporting assists the company in attracting the potential investors by
generating greater sense of trust and confidence among them. Also, it helps in promoting the
higher participation of employee through proper coordination and collaboration as it requires
different departments to come together for the production of integrated reports (Eccles &
Saltzman, 2011).
On the other side of the benefits of integrated reporting, it has its limitations too which are
discussed below:
Integrated reports preparation requires greater knowledge and a good amount of analytical
skills as the process of producing the integrated reports demands collection and analysis of
structured as well as unstructured data, investments in new and compatible information
systems to manage the data required to prepare such reports, allocating resources to the
different areas, appointing third parties to provide assurance about the company’s
performance, setting up new systems and processes etc. All such arrangement involves higher
costs for the companies intending to go for integrated reporting. Moreover, the preparation of
integrated approach is quite complex as it involves incorporating the matters relating to the
corporate social responsibility and sustainable value of the company along with the financial
information (Bénabou, & Tirole, 2010). Due to the common report for financial and non -
financial performance it sometimes become difficult for the users who lack proper knowledge
to understand and interpret the reports.
Answer 5: Relevance of Integrated Reports for various
Stakeholders

Integrated Corporate Reporting 10
Integrated reporting is an advanced way of disclosing the necessary information to its
stakeholders in order to enable them to take informed decisions about the matters concerning
company and their relationship. Investors are the most typical stakeholders of the company as
they provides the finance to thee companies to run their business (Cohen et al., 2012). There
are various kinds of providers of finance in the market such as banks financial institutions,
retail investors etc. Through the use of integrated reports the exiting and the potential investor
of the company can evaluate the firm’s strategy for value creation (Tsai et al., 2010). Along
with the financial aspects, the increasing complexities of the businesses demands the
investors to consider other aspects of the business also such as its performance in fulfilling its
corporate social responsibility and its capability to create a sustainable value in long term
while making the decisions regarding their capital investments (Asif, et al., 2013). The
issuance of integrated reports enhances the goodwill and reputation of the company as these
reports are more comprehensive and covers the necessary information for influencing the
stakeholder’s decisions. The retail investors are the individual bodies that invests their
surplus funds in the company’s to generate some returns and hence integrated reports are
quite essential for them. These reports enables them to assess the company’s ability to
generate returns for them and on the basis of these reports only, they associate themselves
further with the company. Institutional investors are the large bodies which are existing to
assist the businesses in their operations by providing them adequate amounts of funds. These
providers of finance sanctions the funds on certain conditions. These conditions may include
the stipulation of requirement to fulfil certain social responsibilities or to show the
projections of their sustainability which has the direct impact on the enterprise’s value
creation strategies for future terms. The customers are also the part of typical stakeholders of
the company and they are influenced by the integrated reports. As these reports contains the
company’s performance in the areas not relating to financial activities. It helps in building

Integrated Corporate Reporting 11
confidence of the core customers of the business that whatever the company is dealing is in
public interest and would not harm or adversely affect the customers. If the integrated reports
does not reflect the sound financial and sustainability performance it would impair its
standing and goodwill in the market leaving all the stakeholders against it. The existing
investors would stop investing or will demand repayments for their funds invested in the
corporation. The customers will leave the corporations products by switching to the
alternative products of company’s rivalries and the financial institutions and banks would not
value the credit worthiness of the company as appropriate or reasonable to provide funds. The
governmental bodies would start various investigations and related actions against the
company.
Conclusion
From the above research about the corporate reporting and its traditional approach and
integrated approach it can be concluded that there is a limitation of transparency factor in the
traditional information as all the necessary and relevant information is not provided to the
stakeholder leaving it difficult to reach at the concrete decisions regarding their investments
in the company. Therefore the companies must readily accept the integrated reporting to meet
the demands of its providers of finance and other stakeholders. The adoption of integrated
reporting practices will contribute to the goodwill in the eyes of its stakeholders and will
enhance the credit worthiness of the companies in front of institutional investors as all the
stakeholders requires relevant reliable comparable and consistent information for the critical
decisions. Thus firms must include the sustainability and corporate social responsibility
performance together with the financial reports in the annual reports.

Integrated Corporate Reporting 12
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Integrated Corporate Reporting 13
Eccles, R.G. and Saltzman, D., 2011. Achieving sustainability through integrated
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