Disclosure for Sustainability: The Case of Integrated Reporting

Disclosure And Sustainability

With increasing awareness on sustainability, many corporations began to announce their annual sustainability reports without any legal obligation. Publicly traded companies are required to submit their financial reports regularly. They have a tradition of preparing their annual reports and reporting their financial performances. Financial reporting today is acknowledged by globally accepted standards like IFRS and GAAP, where measurement, reporting and auditing goes through principles and well-defined practices. These standards also serve to attain numbers and financial statements free of fraud. However, financial reporting still has its drawbacks as it cannot satisfy its readers with its nature of past performance justification. This backward looking style in financial reports and the time needed to aggregate the data and reveal it in an annual report makes it hard for the readers to assess the value that is created by the operations of the business for its shareholders. After all, in these reports the shareholders are trying to find the answer to the question that how much the company can grow and generate dividends for its shareholders in the future.