A touch of Integrated Reporting: An exploration of large Swedish companies’ compliance with the IIRC's six capitals

Abstract: Background and problem: In 2013, the IIRC issued a new framework on integrated reporting. Through the framework, the IIRC hopes to accelerate the adoption of integrated reporting around the world. Potential benefits of integrated reporting include greater efficiency, a more integrated focus on sustainability and better information. The six capitals concept is a central element to the IIRC's understanding of value creation. Prior studies of Swedish companies and integrated reporting have not focused specifically on the capitals concept, wherefore this study will be exploring this gap in the literature. Purpose: The main purpose of this study is to explore the reporting among large Swedish companies in relation to the IIRC’s six capitals concept. In order to gain a further understanding of the IIRC’s potential impact, two years, 2011 and 2015, will be studied. The study will focus on large companies as prior research has shown that larger companies disclose more and have more incentives to do so. Therefore, only Swedish companies listed on the OMXS30 will be included. Furthermore, only annual reports will be part of the study, as it is these that integrated reports might come to replace. Method: This study uses content analysis, in the form of a scoring system derived from the IR framework and previous studies, to analyse annual reports in order to explore the reporting of capitals among Swedish companies. A list of 25 items under study was derived from previous research and the IR framework and subsequently scored. 20 annual reports from large Swedish companies for each year, 2011 and 2015, were part of the study, resulting in 40 annual reports in total. Results and conclusions: The results show that financial capital scored the highest, followed by human, intellectual, social & relationship, natural and, finally, manufactured capital. Three capitals: human, intellectual and social & relationship, showed increases in their scores between the years. Natural capital showed a decrease while the remaining two were more or less stable. Most companies included in the study (14/20) and a majority of the items (14/25) scored higher during 2015. The total score increased by 11 % from 2011 to 2015, which is considered a relatively small increase. While this study does not answer the questions of why the reporting looks this way, links to previous studies are made in an attempt to provide information that can be of use for both researchers and practitioners.