From sustainability reporting to integrated reporting: a New Zealand case study.

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Master of Commerce
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Yang, Xiaoting

A major development in corporate reporting internationally in the past few years is the development and implementation of integrated reporting, acting as a primary tool to address increased stakeholder demand for more transparent, holistic and long-term decision-useful information. Despite the significant growth in integrated reporting research, there is little existing research into motivations for voluntary adoption and consequential changes in reporting practices, especially in New Zealand. The objective of this research was to explore why one of New Zealand’s largest commercial fishing companies, Sanford Limited, voluntarily adopted integrated reporting and how this adoption influenced its reporting practices.

This study took the form of a single case study involving qualitative analysis of Sanford’s sustainability reports and integrated reports from 2013 to 2020 (i.e., before and after the adoption of the integrated reporting framework in 2014). It also involved in-depth, semi- structured interviews with the people in the company who are key to the preparation of the integrated reports. The findings were analysed through the lens of diffusion of innovation theory and stakeholder theory.

The study found that the motivation for the adoption of integrated reporting is complex and multidimensional. Leadership, with a mission for the company to pursue sustainability over profitability and be the best in the world plays, an important role in initiating voluntary adoption of integrated reporting. Other main motivations for adoption include integrated reporting’s compatibility with the adopter’s existing system and seeing its relative advantages over existing practices. The findings reveal that for an innovation to be adopted, not only does it need to be resilient and robust, but internal top-down support is essential, emphasising the critical role of leadership in innovation adoption. Furthermore, the case company’s view, that integrated reports are the best communication tool to satisfy the increased stakeholders demand for more

transparent information and accountability, encourages the adoption of integrated reporting. This finding indicates that stakeholder demand also plays a part in the adoption decision of innovation, particularly for public listed companies, whose success is dependent on their stakeholders.

The study also found significant changes to report content and incremental changes in the process of preparing integrated reports. Although improved and more collaborative internal and external communication has evolved and continues to evolve, with a cross-departmental team established to break down silos, it appears there have been only minor changes to the existing processes of preparing sustainability reports.

As pioneer research in the New Zealand context, this study provides empirical evidence that contributes to our understanding of the motivation for the voluntary adoption of an integrated reporting framework in a voluntary context and changes that prospective integrated reporting adopters could encounter or anticipate. The findings of this study bridge the existing research gaps as earlier studies of the drivers of integrated reporting adoption focused mostly on countries where integrated reporting is mandatory. It also provides some practical guidance for organisations embarking on the integrated reporting journey to ensure that their reporting practices proceed smoothly.

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