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Corporate Sustainable Development: is ‘Integrated Reporting’ a Legitimation Strategy?
Author(s) -
Lai Alessandro,
Melloni Gaia,
Stacchezzini Riccardo
Publication year - 2016
Publication title -
business strategy and the environment
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.123
H-Index - 105
eISSN - 1099-0836
pISSN - 0964-4733
DOI - 10.1002/bse.1863
Subject(s) - legitimation , integrated reporting , legitimacy , leverage (statistics) , profitability index , early adopter , sustainability reporting , business , accounting , sustainability , public relations , marketing , industrial organization , corporate social responsibility , political science , finance , ecology , politics , law , biology , machine learning , computer science
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