The Ungreening of Integrated Reporting: a Reflection on Regulatory Capture

The University of Auckland Business School Research Paper Series

Meditari Accountancy Research, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/MEDAR-11-2020-1089

Posted: 25 Jan 2022

See all articles by Caroline Mary Bridges

Caroline Mary Bridges

University of Auckland

Julie Harrison

University of Auckland Business School

David Hay

University of Auckland Business School

Date Written: 2021

Abstract

Purpose
The initial rationale for developing integrated reporting included addressing the failures of traditional reporting to address sustainability issues. Subsequently, the International Integrated Reporting Council (IIRC) modified its stated objectives to emphasise integrated thinking and value creation. There has been debate on whether the IIRC’s process for developing its integrated reporting framework was subject to regulatory capture by the accounting profession (Flower, 2015; Adams, 2015; Thomson, 2015). This paper aims to provide additional evidence on the extent to which this regulatory capture occurred, with an update on current developments.

Design/methodology/approach
Data from interviews with key participants in the integrated reporting framework’s development and the IIRC’s Council and Working Group meeting minutes were analysed to identify to what extent the change in the IIRC’s focus can be explained by regulatory capture theory.

Findings
The findings show that the integrated reporting framework’s development was subject to regulatory capture by accountants. However, the extent of capture was mitigated to some extent by processes adopted in its development. This is consistent with regulatory capture theory.

Originality/value
This paper critically examines the debate on the extent to which the sustainability message has been lost as a result of regulatory capture. It provides an in-depth analysis of the IIRC’s treatment of sustainability which explores the application of regulatory capture theory and examines evidence not considered in previous studies.

Keywords: Sustainability, Integrated reporting, Regulatory capture

Suggested Citation

Bridges, Caroline Mary and Harrison, Julie A and Hay, David, The Ungreening of Integrated Reporting: a Reflection on Regulatory Capture (2021). The University of Auckland Business School Research Paper Series, Meditari Accountancy Research, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/MEDAR-11-2020-1089, Available at SSRN: https://ssrn.com/abstract=4016844

Caroline Mary Bridges (Contact Author)

University of Auckland ( email )

Private Bag 92019
Auckland Mail Centre
Auckland, 1142
New Zealand

Julie A Harrison

University of Auckland Business School ( email )

12 Grafton Rd
Private Bag 92019
Auckland, 1010
New Zealand

HOME PAGE: http://https://unidirectory.auckland.ac.nz/profile/j-harrison

David Hay

University of Auckland Business School ( email )

12 Grafton Rd
Private Bag 92019
Auckland, 1010
New Zealand

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