Nonfinancial value creation of integrated reporting

Abstract

Purpose

This paper aims to explore the nonfinancial drivers of value creation that influence an investment decision and present a set of drivers that contribute with a useful integrated reporting to its providers of financial capital using evidence from Brazil.

Design/methodology/approach

This paper is based on a systematic literature review in the Scopus, Web of Science and Google Scholar databases in the period from 2005 to 2020. Interpretive content analysis is used in 42 documents identified to explore nonfinancial drivers to demand by providers of financial capital, which are classified according to the capitals nonfinancial suggested by the integrated report (IR). Then, the results are evaluated by Brazilian professional investors in a focus group.

Findings

The members of the focus group do not consider the IR relevant to investment decision and neither the information about natural capital nor social capital. They highlighted two nonfinancial drivers of value not identified in the previous literature.

Research limitations/implications

The focus group is limited by subjects’ availability and by the participants’ number. But its results represent initial discussions on the subject in the Brazilian context.

Practical implications

The results of this study have value, principally, to investors, target audience of IR, because it aligns your demands with the IRs content, improving its usefulness.

Originality/value

To the best of the authors’ knowledge, this manuscript is the first study to investigate the perception of Brazilian professional investors about the importance of the IR in investment decision-making and to identify content relevant to the financial capital provider’s investment decision, which can improve the usefulness of IR.

Citation

Ribeiro, C.d.M.d.A., Ezequiel, F., Perez Zotes, L. and Vieira Neto, J. (2024), "Nonfinancial value creation of integrated reporting", Journal of Financial Reporting and Accounting, Vol. 22 No. 3, pp. 677-700. https://doi.org/10.1108/JFRA-10-2021-0332