The Ungreening of Integrated Reporting: A Reflection on Regulatory Capture
Meditari Accountancy Research, 30(3), 597-625. DOI: 10.1108/MEDAR-11-2020-1089.
The University of Auckland Business School Research Paper Series
Posted: 25 Jan 2022 Last revised: 25 Mar 2024
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.
Full paper available at https://doi.org/10.1108/MEDAR-11-2020-1089
Keywords: Sustainability, Integrated reporting, Regulatory capture
Suggested Citation: Suggested Citation