There is wide-spread awareness about the fact that business has caused or aggravated many significant global crises, calling into question the sustainability of our current economy. Proponents of the emerging concept of Integrated Reporting, however, argue that corporations can reverse this trend by reporting their financial information together with information measured in CSR reports about at what costs to environment and society, also called footprint, a corporation has achieved its profits. Such opening up to disclosure, so the argument, creates incentives for corporations to reduce their footprint; and reputation and capital allocation will then reward well-performing, sustainable corporations leading to a dynamic mechanism that will contribute to sustainable development.
Such an argumentation is simplistic and does not hold. Property economics establishes that within a property-based economy, corporations are faced with specific economic requirements as a result of the capitalization process, namely requirements to grow and secure profitability across time and competition. Such requirements leave corporations with no option than to subdue social and environmental considerations to their pursuit of profitability. The latter, in return, dictates that corporations use strategies like Integrated Reporting, arguing for voluntary corporate self-regulation in regards to costs imposed on society and environment, in order to shape a regulatory framework that accommodates their ability to respond to economic requirements. Corporations are moreover not likely to voluntarily report on any measure that will threaten their profitability.
The concept of Integrated Reporting can not simultaneously be a corporate tool for shaping a specific legal framework that subdues environmental and social considerations; as well as a contribution to sustainable development, at least not as long as the latter is analyzed from an eco-social perspective that requires that economic interests be subdued to social and environmental considerations. Integrated Reporting can, however, play a role in informing society about the footprint of a given corporation if regulation establishes what is to be measured by corporations when disclosing their footprint.
Table of Contents
1. THE ROLE OF BUSINESS IN SOCIETY AND THE EMERGENCE OF CSR
1.1 FROM SMITH TO LIPPMANN
1.2 THE BEGINNINGS OF CSR
1.3 CORPORATE SCANDALS AND MATURING OF CSR
1.4 CONTEMPORARY CSR
1.4.1 CSR AND SUSTAINABLE DEVELOPMENT
1.4.2 CONTEMPORARY CSR DEFINED
1.4.3 CSR IN PRACTICE: MEASUREMENT OF CORPORATE FOOTPRINT
2. CSR AND INTEGRATED REPORTING
2.1 THE EMERGENCE OF A CONCEPT
2.2 INTEGRATED REPORTING AND ITS RELATION TO CSR
2.3 KEY CONCEPTS OF INTEGRATED REPORTING
2.3.1 THE CONTENT OF INTEGRATED REPORTING
2.3.2 THE MEASUREMENT OF NONFINANCIAL PERFORMANCE
2.4 THE IMPLEMENTATION OF INTEGRATED REPORTING
2.5 THE DESIRED EFFECTS OF INTEGRATED REPORTING
3. NEOLIBERAL PROPERTY ECONOMY: INSTITUTIONAL FOUNDATIONS, ECONOMIC IMPERATIVES AND INSTRUMENTALITY OF CSR
3.1 INSTITUTIONAL FOUNDATIONS OF THE ECONOMY
3.2 ECONOMIC IMPERATIVES OF PROPERTY REGIMES
3.3 REGULATION AND CORPORATE INTERESTS IN PROPERTY REGIMES
3.3.1 A BRIEF HISTORY OF MNC REGULATION
3.3.2 (SELF-) REGULATION AND CSR
3.3.3 (SELF-) REGULATION AND INTEGRATED REPORTING
3.4 INSTITUTIONAL LIMITS OF CSR AND INTEGRATED REPORTING
4. INTEGRATED REPORTING FOR “SUSTAINABLE DEVELOPMENT”? A CRITICAL APPRAISAL OF ITS CHANCES AND LIMITATIONS
4.1 WHAT IS SUSTAINABLE DEVELOPMENT?
4.1.1 SUSTAINABLE DEVELOPMENT IN LINE WITH CAPITALIST RATIONALE
4.1.2 ECO-SOCIAL VIEW OF SUSTAINABLE DEVELOPMENT
4.1.3 CSR, INTEGRATED REPORTING AND SUSTAINABLE DEVELOPMENT
4.2 THE LIMITATIONS OF INTEGRATED REPORTING
4.2.1 FAILURE TO CRITICALLY ASSESS THE NATURE AND ORIGIN OF SUSTAINABILITY CRISES
4.2.2 FAILURE TO ASSESS UNDERLYING INSTITUTIONAL CONSTRAINTS OF THE NEOLIBERAL, PROPERTY-BASED ECONOMIC SYSTEM
4.2.3 FAILURE TO ACCURATELY MEASURE THE SOCIAL AND ENVIRONMENTAL FOOTPRINT OF CORPORATE ACTION
4.2.4 FAILURE TO CRITICALLY ASSESS THE CAPACITY OF THE MARKET ECONOMY TO SOLVE SUSTAINABILITY CRISES
4.3 THE CHANCES OF INTEGRATED REPORTING
5. CONCLUSIONS
Research Objectives and Key Topics
This thesis investigates whether Integrated Reporting of corporate financial and nonfinancial information can genuinely contribute to sustainable development, or if it serves as an instrumental corporate tool within a neoliberal property-based economy. It critically evaluates the origins of CSR strategies and the institutional constraints that limit corporate ability to internalize externalities through voluntary reporting mechanisms.
- The relationship between CSR strategies and Integrated Reporting.
- Institutional foundations and economic imperatives of neoliberal property regimes.
- Critical appraisal of Integrated Reporting’s ability to foster a sustainable economy.
- The dichotomy between capitalist economic rationality and an eco-social view of sustainable development.
- The role of mandatory regulation versus voluntary corporate self-regulation.
Excerpt from the Book
3.1 Institutional Foundations of the Economy
It was Karl Polanyi, mentioned in chapter one, who showed that the current neoliberal economic system marked a sharp differentiation from previous economic systems that mankind knew throughout centuries: for the first time starting with the time of industrialization, the economy was no longer embedded in a wider societal construct, but became its own realm. This new economic system has taken an unprecedentedly pronounced and influential role in public life, and what Thorstein Veblen (2011 [1904]) stated in 1904 is even more so true today: “it dominates modern culture” (p. 1).
The neoliberal capitalist economy as we know it is based on the economic institution of private property, and continues to exist due to confidence in the continuity of the latter (Polanyi, 1968 [1944]). The institution of private property built the foundation of the Roman Empire’s economy; but after its downfall and throughout the medieval times, the economies of what later became to be known as industrialized countries were built on the institution of possession. Still today, economies of non-capitalist societies are based on the latter. Rules of possession, according to Heinsohn and Steiger (2008), “determine who, in what manner, at what time and place, to what extent, and by exclusion of whom, may physically use a good or resource and change its substance and form” (p. 182). In medieval feudal regimes, while there was “secular lord” who held property, the latter was given by the superior to subordinates in forms of possession entitlements, which gave the subordinates the rights and duties of use, tenure, service, and return of the possession: “ownership in this scheme was a stewardship” (Veblen, 2011 [1904], p. 75). Institutions of possession involved restrictions of use, production as well as waste and pollution and therefore dealt with what Steppacher (2008) called a universal question, “how to actualise a universal potential” (p. 327).
Summary of Chapters
1. THE ROLE OF BUSINESS IN SOCIETY AND THE EMERGENCE OF CSR: This chapter traces the historical development of business responsibility and the emergence of CSR as an instrumental corporate response to public pressure regarding externalities.
2. CSR AND INTEGRATED REPORTING: This chapter defines Integrated Reporting as the latest evolution of CSR and examines the frameworks used by corporations to report nonfinancial performance alongside financial data.
3. NEOLIBERAL PROPERTY ECONOMY: INSTITUTIONAL FOUNDATIONS, ECONOMIC IMPERATIVES AND INSTRUMENTALITY OF CSR: This chapter provides an economic analysis of how property-based economies and capitalist growth imperatives force corporations to resist mandatory regulation and prioritize profit.
4. INTEGRATED REPORTING FOR “SUSTAINABLE DEVELOPMENT”? A CRITICAL APPRAISAL OF ITS CHANCES AND LIMITATIONS: This chapter critically evaluates whether Integrated Reporting can bridge the gap between corporate interests and true eco-social sustainability, concluding that its voluntary nature is a significant limitation.
5. CONCLUSIONS: The final chapter summarizes that Integrated Reporting currently functions as a tool for corporate self-regulation that does not challenge the underlying institutional causes of environmental and social degradation.
Keywords
Integrated Reporting, CSR, Sustainable Development, Externalities, Neoliberalism, Property Economy, Capitalization, Sustainability, ESG performance, Corporate Responsibility, Economic Imperatives, Institutional Constraints, Market Economy, Self-Regulation, Environmental Impact.
Frequently Asked Questions
What is the core focus of this Master Thesis?
The thesis examines whether the practice of Integrated Reporting—combining financial and nonfinancial corporate disclosure—truly contributes to sustainable development as its proponents claim, or if it is merely a strategic response to protect corporate interests within a neoliberal economic framework.
What are the primary thematic areas covered?
The work covers the evolution of Corporate Social Responsibility (CSR), the institutional roots of the neoliberal economy, the specific nature of property-based economic imperatives, and a critical analysis of current sustainability reporting standards.
What is the primary research question?
The research question asks if Integrated Reporting of corporate financial and nonfinancial information can genuinely contribute to sustainable development, or if it is fundamentally constrained by the capitalist imperatives of the current economic system.
What scientific methods are applied in the thesis?
The author employs a critical institutional analysis, utilizing property economics and concepts from evolutionary economics to evaluate the institutional foundations of the economy and the inherent limitations of corporate voluntary reporting.
What topics are discussed in the main body of the work?
The main body treats the history of the relationship between business and society, the transition from philanthropic CSR to systematic ESG measurement, the institutional mechanisms of the property economy, and the critical shortcomings of voluntary reporting frameworks in addressing sustainability crises.
Which keywords characterize the work?
Key terms include Integrated Reporting, CSR, sustainable development, externalities, neoliberalism, and property economics.
How does the author define the relationship between property regimes and externalities?
The author argues that externalities are not accidental but a structural byproduct of property-based economies, where corporations are under constant pressure for exponential growth and profit, incentivizing them to shift social and environmental costs onto third parties.
What is the author's conclusion regarding Integrated Reporting?
The author concludes that while Integrated Reporting is a "sound and promising idea" for increasing transparency, it fails in its current voluntary form to address the systemic causes of sustainability crises, necessitating mandatory government regulation to align corporate actions with genuine eco-social sustainability.
- Arbeit zitieren
- David Leicht (Autor:in), 2012, Integrated Reporting of corporate financial and nonfinancial data: Delivering on its promise to contribute to sustainable development?, München, GRIN Verlag, https://www.grin.com/document/202502
