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SUSTAINABILITY AND INTEGRATED REPORTING:
A CASE EXPLORING ISSUES, BENEFITS AND
CHALLENGES
Marianne L. James, California State University, Los Angeles
CASE DESCRIPTION
The primary subject matter of this case concerns sustainability reporting and the
emerging trend of integrated reporting, which combines a company’s financial results with
information about its sustainability efforts. The case explores the related strategic and reporting
issues and the benefits and challenges that sustainability and integrated reporting entail.
Secondarily, the case addresses ethical considerations and dilemmas that company executives
may encounter when reporting the results of their sustainability activities to stakeholders.
The case has a difficulty level of four to five and can be taught in about 45 minutes.
Approximately three hours of outside preparation are necessary for students to address all the
questions in a group setting. The case can be utilized in an upper division accounting course to
help students become aware of important emerging global reporting trends and to explore the
issues, benefits, and challenges that sustainability and integrated reporting entail. The case can
also be utilized in a graduate accounting or business course focusing on the organizational and
strategic issues. The case and the suggested independent questions have research, technical
accounting, communication, and ethical aspects and can be used to enhance students’ analytical,
research, and communication skills, and may also enhance their awareness of reporting-related
ethical issues and challenges.
CASE SYNOPSIS
During the past few decades, formal sustainability reporting has increased significantly
in the U.S. and globally. Many public and some private companies have embraced this trend.
While many companies currently report on their sustainability efforts and thus their impact on
the natural and social environment, reporting is largely voluntary. In addition, most companies
issue separate sustainability reports instead of including the information in their financial
reports. Recently, a new trend toward combining the information about a company’s
sustainability efforts with its financial/economic results has emerged. This is referred to as
integrated reporting or the integrated triple bottom line. This trend is supported by the
Journal of the International Academy for Case Studies, Volume 19, Number 8, 2013
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International Integrated Reporting Council’s efforts to develop a globally accepted integrated
reporting framework.
Companies and their stakeholders may derive significant benefits and encounter
significant challenges from sustainability and integrated reporting. However, since sustainability
reporting is largely voluntary, executives involved in the reporting process may also encounter
ethical dilemmas that must be addressed.
This case explores the issues, benefits, and challenges that companies and their
executives, who are planning to formally report their organization’s sustainability efforts, will
tend to encounter. The case can be used to develop students’ awareness of the trend toward
sustainability and integrated reporting and can enhance their understanding of the related
issues, challenges, expected long-run benefits, and ethical considerations.
The case can be utilized in an advanced level accounting or business course; it also can
be used in a graduate course focusing primarily on the strategic issues. The suggested questions
are independent providing instructors with considerable flexibility to assign selected or all the
questions. The case has communication, research, technical accounting, and ethical aspects and
can enhance students’ analytical, research, and communication skills as well as enhance their
awareness of reporting related ethical issues and challenges.
INSTRUCTORS’ NOTES
Teaching Strategies
Sustainability reporting has become common both globally and in the U.S. Currently, the
majority of public companies issue a formal sustainability (also referred to as corporate
responsibility) report. Private companies are also adopting this trend. In addition, integrated
reporting, which combines an organization’s economic/financial and sustainability performance
into one “integrated” report, is gaining momentum. Accounting students and students in other
business-related disciplines will benefit from being aware of these important reporting trends as
they will likely encounter them in the workplace. Currently, most textbooks do not address
sustainability and integrated reporting. This leads to a gap in knowledge and awareness. This
case can be utilized to address this knowledge gap.
In addition, ethical issues are extremely important to accounting and business
professionals and students should be exposed to such issues in a class setting. Furthermore, many
state boards require that candidates for professional certifications complete courses with ethics-
related content. The ethical aspects of this case can serve this important requirement.
The case deals with a fictitious company that is considering sustainability and integrated
reporting. The case provides sufficient background information to help build students’ awareness
and spark their interest in the topic. The suggested assignments are largely independent
providing instructors with the flexibility to assign all or only selected questions, depending on
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Answers will vary depending on the company chosen. Good examples of
companies with excellent sustainability reports are BASF, Novo Nordisk, Siemens,
Mercedes Benz, and Sony. An excellent source of downloadable reports can be found on
the BlackSunplc.com website.
REFERENCES
Ernst and Young (2012). Leading corporate sustainability issues in the 2012 proxy season. Retrieved August 16,
2012, from http://www.ey.com/Publication/ vwLUAssets/2012_proxy_season/$FILE/2012_proxy_
season.pdf.
Global Reporting Initiative (GRI) (2012). G3.1 Guidelines. Retrieved August 27, 2012, from
https://www.globalreporting.org/reporting/latest-guidelines/g3-1-guidelines/Pages/default.aspx
International Integrated Reporting Council (IIRC) (2013). Consultation Draft of the International Framework -
Integrated Reporting. Retrieved on April 24, 2013, from http://www.theiirc.org/consultationdraft2013/
International Integrated Reporting Council (IIRC) & BlackSunPlc (2012). Understanding Transformation –
Building the Business Case for Integrated Reporting. Retrieved on February 2, 2013, from
http://www.theirrc.org.
Journal of the International Academy for Case Studies, Volume 19, Number 8, 2013
Reproduced with permission of the copyright owner. Further reproduction prohibited without
permission.
