Purpose: The integrated reporting framework seeks to connect a firm’s financial and non-financial performance in a single report by displaying how different forms of capital contribute to the firm’s value creation. Drawing on impression management and incremental information approaches, the purpose of this paper is to examine how the content and semantic properties of intellectual capital disclosure (ICD) found in integrated reports is associated with firms’ performance. Design/methodology/approach: All reports by European listed firms from 2011 to 2016 available via the integrated reporting emerging practice examples database are analysed. Content analysis is used to assesses the quality of ICDs, whereas a regression analysis tests the variation in semantic properties of ICDs according to firms’ performance. Findings: ICDs in integrated reports are mainly discursive, with a backward looking orientation and a limited focus on human capital. On average, more than half of each ICD is conveyed in a positive tone. As the optimistic tone in firms’ ICDs increases, so too does their non-financial performance measured in terms of environmental, social and governance aspects. This finding supports the incremental information approach. Originality/value: This paper contributes to the current literature on ICDs by introducing new evidence on firms’ motivations for non-financial disclosures in integrated reports. By taking a more comprehensive theoretical approach, namely, testing both impression management and incremental information hypotheses, this research extends on prior studies which tested similar relationships in integrated reports but focussed only on the impression management hypothesis.

This study’s purpose is twofold. On the one hand, it analyzes the relationship between the profitability of firms and the tone of nonfinancial disclosures; on the other hand, it tests the relationship between the environmental, social, and governing (ESG) performance of firms and the tone of nonfinancial disclosures on the automotive sector under two different and competing approaches, which are incremental information and impression management. The sample is composed of 68 nonfinancial reports issued by 17 automotive organizations between the years 2016 and 2020. Data analysis proceeded in two stages. First, a content analysis was performed to assess the linguistic attributes of the nonfinancial disclosure. Second, an inferential regression analysis was performed to test the hypothesized associations between firms’ performance and tone of their disclosures. The results of this study are aimed at providing evidence of the determinants of the verbal tone in the corporate nonfinancial reporting in a specific industry.

Disclosure theory argues that better information quality reduces audit risk, by decreasing information asymmetry in the market and consequently, information risk for firms. Extant literature on voluntary disclosure analyzes the relationships between Corporate Social Responsibility (CSR) and audit risk, finding that auditors charge lower fees and issue less going concern opinions to firms with good CSR performance. In this study, we test the relationship between intellectual capital disclosure (ICD) and audit risk and we assess the effect of ICD and audit risk on audit fees. To do so, we use data from the ESG Asset4 database (Thomson Reuters Datastream) on 166 UK and 27 Italian listed firms that issue stand-alone social and intellectual capital statements. The audit risk is measured from both a qualitative and a quantitative perspective. Panel data analysis on 2004–2011 years has been used to test our research hypotheses. Empirical findings from a sample of UK and Italian listed companies show that auditors estimate a lower qualitative risk, albeit a higher quantitative one, for those companies reporting higher ICD scores, compared to those ones with lower disclosure scores on the intellectual capital. Furthermore, we find that reputation risk contributes to the relationship between ICD and audit risk.

This study aims to shed light on how corporate sustainable performance can influence the degree of nonfinancial disclosure (NFD) readability, determining which pillar of environmental, social and governance (ESG) performance has the most significant impact. To address these research questions, the study was conducted on a sample of Italian companies listed between 2017 and 2022, following the introduction of Directive 2014/95/EU. Using a panel regression, we aimed to examine the presence of a correlation between ESG performance and the readability of the reports (measured by the Gunning Fog index) employed by companies to disclose nonfinancial information. We successively conducted several robustness tests and verified the absence of multicollinearity and endogeneity. The results show that there is a positive and significant relationship between environmental performance and NFD readability, suggesting that companies with better environmental performance tend to make their disclosures more understandable and transparent. This result supports the signalling theory, according to which companies with good sustainability results try to distinguish themselves from others through clear and readable information. In contrast, no significant relationships are found for the social and governance dimensions, indicating that these variables may be less relevant in determining NFD readability. Practical implications highlight the importance of promoting accountability and transparency in sustainability reporting. Regulators, on the other hand, could use these findings to refine existing regulations and introduce more stringent standards in terms of transparency and readability, to reduce the risk of greenwashing and improve the overall quality of information provided to stakeholders.

Prior literature identified the use of Performance Measurement Systems (PMS) as crucial in addressing improved processes of care. Moreover, a strategic use of PMS has been found to enhance quality, compared to non-strategic use, although a clear understanding of this linkage is still to be achieved. This paper deals with the test of direct and indirect models related to the link between the strategic use of PMS and the level of improved processes in health care organizations. Indirect models were mediated by the degree of perceived managerial discretion. A PLS analysis on a survey of 97 Italian managers working for health care organizations in the Lombardy region was conducted. The response rate was 77.6%. The strategic use of PMS in health care organizations directly and significantly (p < 0.001) enhances performance in terms of improved processes. Perceived managerial discretion is positively and significantly (p < 0.001) affected by the strategic use of PMS, whereas the mediation effect is non-significant. This study contributes to the literature investigating the design and implementation of a non-financial measurement tool, such as the non-financial information included into a balanced scorecard (BSC), in health care organizations. Managers in health care organizations can benefit from the strategic use of PMS to effectively allocate their time to strategic opportunities and threats, which might arise and affect organizational, output-related performance, such as improving processes.

This commentary argues that the integrated thinking could support the simultaneous consideration of different stakeholders' groups to ensure that the SDGs can be achieved as a whole. Prior research, indeed, has argued that social and environmental accounting should put forward actions against unsustainability. Recent literature and international bodies report action to mitigate the negative impacts of unsustainability globally, such as the introduction of the 17 Sustainable Development Goals (SDGs) to set an agenda for the implementation of sustainable development. The implementation of the SDGs has not thus far resulted in the expected outcomes, since there is a lack of focus on how to identify interdependencies among different goals. Integration in SDGs has emerged as an approach to promote actions in this regard, but only a limited number of studies have put forward how integrated reporting and thinking can support the implementation of actions and the monitoring of their progress. Therefore, a paradigm shift in the implementation of an integrated approach in monitoring sustainable development worldwide should be promoted. This could have economic, financial and business consequences; for instance, to support national development plans by creating national financing frameworks, to improve internal decision making and information for investors, to effectively engage the public in sustainability practices such as a Green New Deal and to enhance the perspective of both public and private sector. The adoption of integrated reporting (IR) can describe the value creation process of an organization, by considering the influence of the external environment, relationships, and various resources. By including the concept of sustainable development, the revised IR Framework can be translated at various levels of analysis, by helping firms, local authorities, countries, or other stakeholders in developing proper strategies to improve their process of sustainable development creation. Areas for fruitful future research can be addressed to identify those interdependencies among goals that could effectively enable the SDGs to be universal, indivisible, and interlinked. A further call for research could be focused on what interconnections in the SDGs could be developed across sectors, societal actors, and between and among low, medium, and high-income countries.