Financial statements are vital sources of information to the capital markets

Financial statements are vital sources of information to the capital markets, investors and stakeholders. The quality of investment and decisions made by investors depends on the accuracy, completeness, and reliability of financial information publicized to them by companies. Thus, high-quality financial information improves investor decisions and in turn the efficiency, liquidity, and safety of the capital markets, which may result in prosperity and economic growth for the nation.
Recent decades have witnessed an exponential growth in new forms of accountability and report such as sustainability reporting, corporate social responsibility (CSR) reporting and integrated reporting. According to (Herzig & Schaltegger, 2011) “Many companies are informing their stakeholders more and more often about their social and environmental performance”. Firms worldwide given the need for transparency on social and governance issues have used sustainability reporting.
According to the GRI Reporting Framework “sustainability reporting is the practice of measuring and disclosing performance and being accountable to internal and external stakeholders for organizational performance intended to further sustainable development (GRI, 2011).” The sustainability performance information may be presented as part of an organization’s annual report, or in a stand alone report such as a sustainability report, a triple bottom line report, or an environmental or social impact report. It is one of the key ways in which companies demonstrate, and are being judged on, their commitment to corporate responsibility. In some countries sustainable reporting is voluntary, however most companies who do these reports do it for many reasons such as for staff recruitment, to identify areas for operational or management improvement and to improve the companies reputation. According to the Centre for Australian Ethical Research’s recent survey on sustainability reporting the main target audience for sustainability reports are employees (87%); customers (79%); shareholders (74%); local community (67%); institutional investors (54%); suppliers (59%); analysts (51%) and governments and NGOs (28%).
Corporate social responsibility (CSR) can be defined as the “economic, legal, ethical, and discretionary expectations that society has of organizations at a given point in time” (Carroll and Buchholtz 2003, p. 36). Corporate sustainability reporting should deliver information in such a way that it provides decision making value to investors, customers, employees and other relevant groups who have a stake in the company or who are in some way affected by any actions the company may take. It should also increase the transparency and accountability of companies, and is considered an important way for them to demonstrate their performance and long-term economic value, to assume corporate responsibility and to contribute to sustainable development. (UNEP – Sustainable and Responsible Business, n.d). In 2017, Scotia Bank as a part of their commitment to develop young people in the community built soccer fields for children in Peru and Mexico and also sponsored soccer leagues across Latin America. This made it possible for the young people to mingle, make new friends and gain confidence. CSR helps firms develop positive relationships with various stakeholders such as customers and investors. (Hansen, Dunford, Boss, Angermier, 2011). Canon has also been contributing by employing persons with disabilities at its branches in Japan. The aim of the company was to make workplaces more comfortable and accessible for people with disabilities by improving the facilities, thus providing greater barrier-free access. Additionally, they are working to expand the scope and nature of jobs for the disabled, while also ensuring that they are settling in and becoming active members at their assigned workplaces. Many are of the view that CSR should only focus on earning a profit for their shareholders and leave social issues to others since getting involved in social and moral issues is not economically feasible.

According to the Conceptual Framework (paragraph 1.1), “an integrated report is a concise communication about how an organization’s strategy, governance, performance and prospects, in the context of its external environment, lead to the creation of value over the short, medium and long term” (IIRC, 2013b). The executive director of the division of the Financial and Accounting Advisory Service of Ernst & Young Romania argues that, by combining financial and non-financial information, the Integrated Reporting provides efficiency, transparency and consistency. Sridharan (Sri) Nair, the managing partner of PwC Malaysia said, “while there is growing awareness of integrated reporting among companies in Malaysia, many companies still do not fully appreciate the value it brings to their business. Moreover, some may still view it as a compliance-driven add-on which results in more work when preparing their reports”. Integrated reporting improves the way in which organizations think, plan and report on the success of their business. This type of reporting assists businesses also to make informed decisions and manage the organizations performance. When managing any type of business trust among customers, stakeholders and suppliers should be paramount. Additionally integrated reporting can serve as a form of discipline for a company by ensuring that the company concisely reports all material information that shows how well it is performing in nonfinancial dimensions.

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