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Corporate reporting has never before been so complex, with increased mandated content and listing rule provisions, resulting in increased length and complexity of annual reports.

Push and pull

Because integrated reporting is a market-driven initiative, providers of financial capital play a central role in driving the widespread adoption of <IR>. Few studies examine integrated reporting from a demand perspective.  We draw on rare access to senior level investors, to gain that view.

Mixed feelings

Familiarity with, and demand for, <IR> among investors are mixed. Buy-side fund managers involved in ESG funds are the most knowledgeable and on-board; sell-side equity analysts remain uniformly cynical, reflecting perhaps the shorter-term horizons and incentive structures on the sell-side.

However, consensus does emerge, all would welcome a form a corporate reporting that is more closely linked to business strategy, and focused on long-term value.

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Challenges and recommendations

Lack of critical mass in <IR> adoption among preparers  Further research to examine investor demand for granulated KPIs, links with business strategy and metrics into market benefits

Lack of familiarity with <IR> among investors

1) Build <IR> awareness among investors at senior levels
2) Increase coverage of <IR> at capital market presentations

Capital market culture and prevalence of short termism

1) Use influence from the <IR> Investor
2) Network to push for long-term outlook in investment decision-making

Misunderstanding around the capitals model

1) Present the capitals model in a practical, jargon-free way
2) Inclusion of <IR> in financial services staff training programmes