The Journey Towards Integrated Reporting in Australia - Essay Example

Article review: Sustainability reporting and the journey towards integrated reporting in Australia of the of the Number Date 1. Summary of the paper The research focuses upon role of numerous variables and instances, leading to foundation of integrated reporting in Australia. The study highlights impact of events, technological and regulatory strategies that resulted in extension of sustainability reporting practices. The report is considered important because it presents an overview regarding evolution of integrated reporting agenda in Australia. Alongside, the report also explains failure of sustainability reporting to be a part of mainstream corporate reporting. The study is based on Actor Network Theory (ANT) purification process with its findings based on themes such as, human and non-human actors, events and technological and regulatory initiatives (Law 1-21). The main agenda of implementing this process is to understand mobilization activities, chain of relations, conflicts and resistance, which determined integrating reporting journey of Australia. The research was undertaken with the objective to determine impact of events and manifestations on sustainability reporting and emergence of integrated reporting. The author has collected necessary data through documentation review, semi-structured reflective interviews and participant observation method (Patricia). Another qualitative approach has been included by the author that is the netnographical approach. In this research, qualitative data analysis was undertaken using Nvivo 9 research software by uploading all interview transcription in the software. The report findings present four key factors that influenced evolution of integrated reporting, namely, critical events, actors, technologies and regulatory initiatives (Richards 16). 2. Introduction and Motivation The introductory section briefly discusses factors that influenced emergence of integrated reporting in Australia. It discusses advances in reporting field because of purification processes, before introduction of International Integrated Reporting Committee (IIRC). The factor that motivated the author to commit to this research was to understand the shift from sustainability reporting to integrated reporting. The author demonstrated that sustainability reporting method has been in practice for quite some time and an important fact about it is that is a catalyst of Actor Network theory that has influenced evolution of integrated reporting. The social environment accounting study by Mathews (1997), along with contribution of other sustainability researchers such as, Buhr (2007), Gray (2001) and Milne and Gray (2007), show developments made in sustainability accounting during 20th century. However, this research has extended the time frame to a 40-years span, ranging from pre-2000 to post-2000; apart from implementation of Actor Network Theory, it has also included different themes. The research is important for validating limitation of the sustainability reporting and understanding need to incorporate integrated reporting. The research is particularly important to the vast stake holder community of Australia, including big corporations and the government. The study was considered important by the researcher because provides a better insight of the role played by sustainability reporting, need and emergence of integrated reporting and reasons behind failure of sustainability reporting to be a part of mainstream corporate reporting (Patricia). 3. Literature review, theory development and hypotheses formulation The literature review provided a detailed overview of sustainability reporting and causes that led to integrating reporting. The author explained that IIRC was formed to create an appropriate framework of sustainability accounting. According to her, Global Reporting Initiative and Sustainability Accounting were key factors for rise of integrated reporting agenda. Patricia also pointed out that the literature review presented the fact that sustainability reporting has been around for more than forty years, yet it could not be a part of mainstream reporting. The main flaws that were recognized by the author in the literature on sustainability reporting were absence of governing norms and regulations, standards being violated, unreliable measurement, poor quality of report and lack of comparability. Moreover, the literature also revealed that in case of financial reports, sustainability reporting lacked transparency and accountability. According to the author, integrated reporting agenda was necessary to address the lacunas of sustainability reporting. It was only possible through implementation of new form of integrated report technology that would improve quality of sustainability reporting as well as render it a part of mainstream accounting. In addition, integrated reporting system would also provide companies with their necessary accounting report along with sustainability report. As per the author, governance and regulatory factors were also involved as the cause of foundation of sustainability reporting practices. A shift in the governance mode has significantly affected emergence of integrated reporting. Patricia has also explained various factors that have influenced evolution of present integrated reporting agenda. These are human as well as non-human factors in the form of technologies and regulatory framework. In light of details provided by the literature, the author has thoroughly explained the acting factors. The various acting factors are networks, books, machines, concepts, frameworks, reports and scientific instruments. Alongside, the purification process has been described as a method of separating facts from values so as to enable transparency of the processes involved to identify and translate trials of strength, before the scientific device is black-boxed (Patricia). Since the author has not developed any hypothesis or theory in the given article, hence the independent and dependent variables and their relation with the article have not been discussed. 4. Method In order to gain insight of the emergence of integrated reporting, a holistic approach has been adopted by the author. She has chosen research design of the study based on ‘follow the actors’ principle. This approach recognizes various developments that have helped in extending sustainability reporting and shaping the same into integrated reporting. Moreover, Actor Network Theory relates the four catalysts responsible for development of integrated reporting (Munro 125-139). The main task of Actor Network theory is to help a researcher understand complex network in a scientific setup. It provides an overview regarding behavior of entities when they are related with each other (Law 1-21). The next step to research design is data collection method. In this research method, data has been collected through qualitative collection method as well as netnographical approach. The qualitative approaches include documentation review, semi-structured reflective interviews and observation of participants during face-to-face interaction. The netnographic approach is a branch of ethnography and a qualitative method of studying free behavior of individuals on internet (Patricia). The author has explained that the netnographic research approach was considered important for data collection because participating in virtual communities over internet helps in building relations and gaining interview access. The interviews were conducted to procure detailed information about participants and clarify ambiguous arguments. In the process of data collection, the author has also involved important individuals from stakeholders groups who are strongly interested in integrated reporting agenda. Furthermore, in face-to-face interaction, the author tried to confirm viability of individuals as potential interviewees. Despite several advantages of interview and observation methods, personal convenience and perception-based biasness can act as drawbacks. The third aspect of research methodology is data analysis method. Patricia has implemented software technology in analyzing the data collected. The data analysis software package, Nvivo 9 was used along with ‘orders of worth’ to draw an obvious conclusion (Boltanski and Thevenot 359-377). The growing demand of data analysis software is because it easily processes data electronically and yields quality result. Another benefit of Nvivo 9 software is that it can be useful for researchers working in a group. The software facilitates combining individual work with that of the group (Richards 16). Overall, the author has tried to implement the best techniques to gather data suitable for the study. 5. Results The data analysis revealed certain number of key factors that had influential impact on sustainability reporting and subsequently on integrated reporting. The outcome justifies objective of the research to a great extent. These factors have been explained in context of prior and post 2000: Critical events: According to the author, prior 2000, one of the most significant factors that influenced sustainability reporting was establishment of United Nations Environmental Program; Bhopal gas leak in 1984; and Chernobyl nuclear reactor explosion in 1986. Post 2000, event that affected journey of integrating reporting was the global financial crisis of 2008 (Patricia). Significant actors: The pre 2000 period highlights efforts made towards implementation of technology that could account for sustenance of organizations. Introduction of Boston-based Coalition for Environmentally Responsible Economies (CERES) as an aftermath of Exxon Valdez oil spill in 1989, formation of Global Reporting Initiatives (GRI) and that of United Nations Global Compact (UNGC) after 1990 had been able to support civic interest and promote sustainable business practices. In context of Australia, post 2000, Society for Knowledge Economics (SKE) was established in 2005. Following that in 2010, IIRC was founded (Patricia). Developing technologies: The author studied that pre 2000 era was marked by unavailability of technologies required for sustainability impact. Post 2000, a number of technologies surfaced, such as, GRI, UNGC, AICPA, IIRC and A4S (Patricia). Regulatory regimes: A number of regulatory regimes were introduced post 2000 across the globe. In context of Australia, CLERP 9 (Corporate Law Economic Reform Program) was introduced in 2004. Some of the other regimes are Greenhouse Gas Abatement Scheme (2003) and National Greenhouse Gas Emissions Schemes (2007) (Patricia). The above explanation as provided by author can satisfy one’s thirst for knowledge relevant to origin, need and development of integrated reporting. 6. Discussion and Conclusion To conclude, the paper explains that early existence of sustainability reporting resulted in integrated reporting method. The various other factors that act as a catalyst in its emergence are establishment of United Nations Environmental Program; events like, Chernobyl nuclear reactor explosion and Alaska oil spill; and development of various technologies and regulatory initiatives worldwide. Growth of CERES, GRI and UNGC has also contributed towards formation of the integrated reporting. The author has explained her findings and the result in an organized and justified manner but she has also argued that irrespective of efforts made by IIRC and integrated reporting agenda, sustainability interest has considerably reduced. However despite these flaws, the author has suggested that integrated reporting has prospective scope for future research as little work has been done in this regard. Moreover, with more researcher involving themselves in this field will result in better ways to understand the problem and solution can be obtained that will help in further development of sustainability reporting and integrated reporting. Work cited Boltanski, Luc, and Laurent Thévenot. "The sociology of critical capacity." European journal of social theory 2.3 (1999): 359-377. Print. Law, John. "Actor network theory and material semiotics." The new Blackwell companion to social theory 1 (2009): 1-21. Print. Munro, Rolland. Actor-network theory. CA: The Sage handbook of power, 2009. Print. Richards, Lyn. Using NVivo in qualitative research. CA: Sage, 1999. Print. Strong, Patricia. “Sustainability reporting and the journey towards integrated reporting in Australia.” Jill McKinnon Research Seminar Series (2014): 1-40. PDF file. Read More