Integrated reporting vs. sustainability reporting for corporate responsibility in South Africa

Abstract

Large corporates have come under increasing pressure to conduct their business in a more transparent and responsible manner. In order for business to fulfil its obligations under the ethic of accountability stakeholders must be given relevant, timely, and understandable information about their activities through corporate reports. The conventional company reports on annual financial performance, sustainability and governance disclosures often fail to make the connection between the organisation’s strategy, its financial results and performance on environmental, social and governance issues. Recognising the inherent shortcomings of existing reporting models, there is a growing trend to move towards integrated reporting. South Africa has been one of the most innovative countries in terms of integrated corporate reporting. Since 2010 companies primarily listed on the country’s major stock exchange have been required to produce an integrated report as opposed to the former sustainability report. The aim in this study is to review the development of integrated reporting by large corporates in South Africa and assess the impact of the required transition from sustainability reporting to integrated reporting on non-financial disclosure of eight South African corporates using content analysis of annual reports.

The Level of Integrated Reporting Alignment with the IIRC Framework: Evidence from South Africa

“…In the last twenty years, South African companies, in line with international trends, have paid more and more attention to social and environmental dynamics (Wingard & Vorster, 2001;Sonnenberg & Hamann, 2006;Rensburg & Botha, 2013). Furthermore, South Africa has played a particularly important role in the movement towards corporate social responsibility, non-financial disclosure and integrated reporting (Clayton et al, 2015). These circumstances led South Africa, in the 1990s and 2000s, to receive important international recognition both for the results achieved in terms of corporate governance and for legislative and regulatory requirements (Bezuidenhout et al, 2007;Eccles et al, 2012;GRI, 2013).…”

“…These circumstances led South Africa, in the 1990s and 2000s, to receive important international recognition both for the results achieved in terms of corporate governance and for legislative and regulatory requirements (Bezuidenhout et al, 2007;Eccles et al, 2012;GRI, 2013). The presence of social and environmental regulations and the interest in responsible investments have long made South Africa a leading nation in terms of sustainability reporting (Clayton et al, 2015). Attention to integrated reporting has also encouraged the growth of quality and quantity of information disclosed on sustainability issues (GRI, 2013).…”

“…South Africa's leadership role in the field of non-financial disclosure is connected to the country's political history and to the transition from apartheid to multi-racial democracy (Bezuidenhout et al, 2007). During the apartheid period, the fear of sanctions and divestments has prompted many companies operating in South Africa to respond with voluntary initiatives, such as the Sullivan Principles (Bezuidenhout et al, 2007;Clayton et al, 2015). These principles represented a code of conduct, established for the Unites Stated multinationals with affiliates in South Africa.…”

The Patterns of Integrated Reporting: a Comparative Study of Companies Listed on the Johannesburg Stock Exchanges and Indonesia Stock Exchanges

“…This is reasonable given the fact that it is mandatory for companies listed on the JSE to adopt the <IR>, even though there are no clear standards of how many items should be disclosed in it. Indeed, as (Clayton, Rogerson and Rampedi, 2015) claim, South Africa has played innovative roles in integrated reporting movement. Moreover, South Africa has been internationally recognized a country with excellent achievements in corporate governance during the 1990s and 2000s and for its regulatory and legislative requirements (Bezuidenhout et al, 2007;Eccles, Serafeim and Armbrester, 2012).…”

“…With comprehensive regulatory reporting requirements on both the social and environmental fronts and a growing interest in responsible investment, South Africa remains in a leading position with regards to the <IR> (Clayton, Rogerson and Rampedi, 2015). The most recent trend towards the <IR> is leading to further increases in both the quantity and quality of sustainability reporting linked with financial reporting (GRI, 2013).…”