Corporate Sustainable Development: is 'Integrated Reporting' a Legitimation Strategy?. (31st October 2014)

• Record Type: Journal Article
• Authors: Lai, Alessandro; Melloni, Gaia; Stacchezzini, Riccardo
• Is Part Of: Business strategy and the environment. Volume 25:Number 3(2016)
• Page Start: 165
• Page End: 177
• Publication Date: 2014-10-31
• Subjects: integrated reporting -- sustainability reporting -- ESG ratings -- sustainable development -- communication strategy -- legitimacy theory; Industrial management -- Environmental aspects -- Periodicals; Industries -- Environmental aspects -- Periodicals; 658.4083
• DOI: 10.1002/bse.1863
• Languages: English
• ISSNs: 0964-4733

Abstract

Abstract: In the field of sustainability reporting (SR), the so‐called 'integrated report' (IR) is gaining momentum. In spite of its voluntary nature, a growing number of firms are adopting IR by participating in the International Integrated Reporting Council (IIRC) Pilot Programme. Stimulated by concerns on the use of SR as a legitimation strategy, the paper investigates whether the decision to adopt an IR stems from the need to repair legitimacy threats. By showing that IR adopters have significantly higher Bloomberg ESG disclosure ratings relative to non‐adopters, we reject the hypothesis of firms adopting IR as a response to a poor rating. Additionally, we show that other proxies of legitimacy pressures (size, leverage, profitability, industry) do not play a role in explaining IR adoption. Overall, our evidence suggests that corporate engagement in IR is not a matter of strategic legitimation. Copyright © 2014 John Wiley & Sons, Ltd and ERP Environment