Unpacking the role of integrated reporting as an internal mechanism of organisational change Open Access

In the pursuit of long-term sustainability, organisations face increasing pressure to take meaningful action and demonstrate contributions to global societal goals. Organisational change is necessary as current business practices are misaligned with meeting the needs of a safe and just space for humanity (Boehm et al., 2023; Richardson et al., 2023; Williams et al., 2025). To drive this shift, firms will need to leverage internal mechanisms to steer their operations towards more sustainable outcomes and impacts. Integrated Reporting (<IR>) has emerged as a potential tool to help induce internal change processes to improve corporate sustainability performance and enhance transparency to stakeholders.

<IR> represents a corporate reporting process conceived to communicate how a firm creates value over time (IIRC, 2016, 2021). This innovative approach requires integrating financial and non-financial data, compelling managers to adopt a holistic view of the capitals upon which a firm relies for its operations and how its business model generates outputs that impact these capitals (de Villiers et al., 2020). Introduced by the International Integrated Reporting Council (IIRC) in 2013, this reporting process aims to achieve the following two fundamental objectives: firstly, to offer communication benefits that facilitate investment decisions in the capital markets and secondly, to serve as a mechanism that drives organisational change towards more sustainable business impacts (Eccles and Krzus, 2010; Eccles and Serafeim, 2015; Bray and Prescott, 2020).

Since its inception, the IIRC has undergone two notable changes in character (see O'Dwyer et al., 2024). Firstly, a merger with the Sustainability Accounting Standards Board (SASB) to create the Value Reporting Foundation (VRF) in 2021. Secondly, a further consolidation in 2022 to become part of a new institutional arrangement under the auspices of the International Sustainability Standards Board (ISSB), which is tasked with preparing sustainability-related disclosure standards as part of the broader International Financial Reporting Standards (IFRS) framework (IFRS Foundation, 2023). The newly formed IFRS sustainability standards are closely aligned with <IR>, drawing on its principles and approach. As many countries across the world are considering the adoption of these standards for mandatory reporting by large companies, <IR> continues to hold its global relevance and impact. These developments mark a milestone in the journey towards standardising and embedding sustainability-related information in corporate reporting practices (de Villiers and Dimes, 2023).

To date, <IR> has garnered more than 2,500 subscribing companies spanning across 70 countries (IFRS Foundation, 2022). Corporate uptake of <IR> has attracted considerable attention from accounting and organisation scholars (see Dumay et al., 2016; Perego et al., 2016; Velte and Stawinoga, 2017; Hossain et al., 2023; Jayasiri et al., 2023; Songini et al., 2023 for comprehensive literature reviews on <IR>). Researchers have examined various aspects related to <IR>, including its role as an external communication tool (Brown and Dillard, 2014; Cheng et al., 2014), the rationale behind its implementation (Steyn, 2014; Robertson and Samy, 2020), the <IR> Framework (Adams, 2015, 2017; Simnett and Huggins, 2015), <IR> implementation in specific legal (Frias-Aceituno et al., 2013) and business contexts (Lodhia, 2015; Mio et al., 2016), as well as the barriers to and enablers of its implementation (Dumay et al., 2017). More recent studies have focused on the effects of <IR> quality and assurance in capital markets (Barth et al., 2017, 2020; Caglio et al., 2020), the institutionalisation of <IR> (Gibassier et al., 2018; Cerbone and Maroun, 2020) and the role of <IR> in addressing injustices among stakeholders (Beretta et al., 2025).

Scholars have also begun to garner empirical evidence to substantiate conceptual claims regarding <IR> as an internal mechanism of organisational change (Bebbington and Fraser, 2014; Stubbs and Higgins, 2014; McNally and Maroun, 2018; Higgins et al., 2019; Rodríguez-Gutiérrez et al., 2019). Early studies indicate that <IR> primarily induces limited or symbolic changes to how the firm operates: small adjustments that fine-tune the dominant thought patterns and set ways of organising, focusing mainly on the preparation of the corporate report (Stubbs and Higgins, 2014; Higgins et al., 2019). A few studies have identified that <IR> may have the potential to induce larger, more substantive change to firms that challenge the prevailing ways of thinking and how they operate. This occurs through advancing the understanding of non-financial drivers of value (Bebbington and Fraser, 2014; McNally and Maroun, 2018; Higgins et al., 2019), triggering more holistic discussions and increasing awareness of sustainability issues throughout the organisation (Rodríguez-Gutiérrez et al., 2019) and making initial alterations in managerial decision-making processes (McNally and Maroun, 2018).

However, this stream of literature is relatively nascent, and a cohesive understanding of precisely how <IR> can function as a managerial tool to change a firm's activities towards more sustainable ways of working is yet to emerge (de Villiers and Dimes, 2022; Songini et al., 2023). These nascent studies largely indicate that while <IR> may alter some structures and practices, it primarily serves as a tool to improve reporting processes. Little empirical evidence has surfaced on how <IR> may significantly influence internal organisational processes, thereby casting doubt on its potential to meaningfully advance sustainability within firms (Stubbs and Higgins, 2014; Higgins et al., 2019). Accordingly, several studies call for more research focusing on the internal processes affected by <IR> and its potential to induce substantive change (Dumay et al., 2016; Barth et al., 2017; Rinaldi et al., 2018; de Villiers et al., 2020; Garcia-Torea et al., 2022; Hahn et al., 2023). Using a grounded theory approach, this study aims to respond to these calls by addressing the research question: How can <IR> act as an internal mechanism of organisational change?

We approach this inquiry using qualitative methods to uncover how firms are utilising <IR> within the Netherlands, a mature sustainability reporting institutional context where numerous organisations adhere to the IIRC's principles for their corporate reporting (van Bommel, 2014). We conducted 38 semi-structured interviews over three rounds with company managers, consultants and academics engaged in the <IR> field. In line with Charmaz (2006) grounded theory approach, we undertook an iterative process whereby data collection and analysis occurred concurrently, enabling the findings to be inductively derived from the data itself. While research on <IR>-related change has grown in recent years, in-depth empirical insights into the managerial use of <IR> in practice remain scarce, warranting such an inductive, theory-building approach (Songini et al., 2023). Through rigorous comparative analysis of our data incidents, with an emphasis on probing variation, we developed abstract categories and generated an empirically grounded model that can inform policy and practice (Charmaz, 2006). Our analysis identified four practices: (1) Value creation narration, (2) Organisational alignment, (3) Integrated management and (4) Stakeholder impact reflection. Each of these practices held the potential to drive substantive change within the investigated organisations. For some leading firms in corporate reporting, <IR> enabled the adoption of a more holistic perspective on the interconnectivity of capitals and fostered a broader understanding of impacts across value chains.

We draw on this analysis to develop an empirically grounded model of <IR> as a mechanism for internal change. Extant studies suggest that <IR> can prompt organisational change, yet empirical examination of the practices through which it is utilised as a managerial tool remains nascent. Our model advances current understanding by conceptualising two overarching sets of practices: empowering practices, which create the enabling conditions for change and implementing practices, which translate those conditions into concrete organisational action. Within these two sets, our study identifies and explains the particular practices through which <IR> can support and stimulate the advancement of corporate sustainability.

Our empirical model unveils two key insights for advancing the understanding of the role <IR> may play in organisational change. Firstly, the repertoire of four practices demonstrates the potential of <IR> to invoke substantive change within firms. Prior research has found <IR> to facilitate only limited adjustments to organisational activities, serving primarily to legitimise or consolidate ongoing change initiatives (Stubbs and Higgins, 2014; McNally and Maroun, 2018; Higgins et al., 2019; Rodríguez-Gutiérrez et al., 2019). Our evidence partially supports this view – for instance, the practice of Value creation narration can be restricted to changing reporting routines through unifying narratives between financial and sustainability reporting. Yet, in contrast to these studies, we show that firms can also mobilise each practice for more substantive change that induces novel ways of thinking and operating. For example, Value creation narration can extend beyond reporting to redefine a company's purpose, determine the sustainability themes most relevant to that purpose and establish the organisational structures required to support and communicate these priorities. Secondly, our research reveals much-needed empirical insight into implementing practices – how <IR> may act as a managerial tool to guide decisions encompassing environmental and social considerations, supported by a deeper understanding of value creation and impact. While conceptual work has claimed that <IR> can support decision-making, our analysis provides empirically grounded insights into how firms realise this potential in practice.

The remainder of this paper is organised as follows. Firstly, we introduce the concept of <IR> and review extant studies considering <IR> as an internal mechanism of organisational change. Secondly, we explain the qualitative methods employed, namely, an inductive and grounded approach. Thirdly, we present our findings with detailed explanations on how <IR> acts as an internal change mechanism for the organisations investigated. Finally, we discuss the implications of our findings and propose directions for future research.

<IR> formally emerged in December 2013 with the introduction of the principles-based International <IR> Framework by the IIRC (Bray and Prescott, 2020; IIRC, 2021). <IR> has been heralded as the “next step in the evolution of corporate reporting” (IIRC, 2021, p. 1) that is “holistic, strategic, responsive, material and relevant across multiple time frames” (Adams and Simnett, 2011, p. 292). <IR> seeks to provide managers with an understanding of how firm activities create and destroy value over time by dealing with the interdependencies and trade-offs between a firm's capitals (financial, manufactured, intellectual, human, social and relationship and natural). This allows managers to better assess the risks of value creation and take remedial action by changing internal activities or even a firm's business model (IIRC, 2021). By being forward-looking and “multi-capitalistic” (IIRC, 2018, 2020), <IR> aims to address the shortcomings of financial reporting and drive organisational change by demonstrating how value is created in the short, medium and long term, while serving the different information needs of stakeholders and the broader society (Eccles and Krzus, 2010; Eccles and Serafeim, 2015).

<IR> has attracted much attention from accounting scholars, yet the field remains nascent. Studies have mostly focused on establishing a discourse for other researchers to engage in and raising awareness by understanding, developing and promoting <IR> ideas (Dumay et al., 2016; Velte and Stawinoga, 2017; Rinaldi et al., 2018; de Villiers et al., 2020; Songini et al., 2023). Central to this work has been ascertaining the objectives of <IR> and understanding whether it can attain these objectives.

Financial reporting is conventionally linked to an information function, whereas sustainability reporting is tied to a transformation function. Eccles and Serafeim (2015) have contended that <IR> seeks to amalgamate both, recognising their complementarity and respective shortcomings. In <IR>, the information function revolves around external reporting, responding to stakeholder pressures for transparency on environmental and social impacts, while equipping organisations with data to benchmark performance and guide resource allocation. The transformation function relies on cultivating stakeholder relationships and integrating their inputs into resource allocation through sustained engagement. By combining both functions, <IR> unveils opportunities for value creation, bolsters risk management processes and facilitates the emergence of integrated thinking within the organisation (Eccles and Serafeim, 2015).

Integrated thinking stands as a central tenet in <IR> and is defined as “the active consideration by an organisation of the relationships between its various operating and functional units and the capitals that the organisation uses or affects” (IIRC, 2021, p. 3). It links a firm's strategic focus, future outlook and connectivity of information, while taking into account capital interdependencies, stakeholder interests and the external context (IIRC, 2021). The cultivation of integrated thinking is claimed to help organisations harmonise structures and processes with strategic goals, providing internal actors with a shared, clear story of the organisation's performance across multiple criteria (Lodhia, 2015) and reinforcing cross-functional collaboration (Busco et al., 2021). By embracing a broader view of a firm's performance, integrated thinking is heralded as the primary engine that drives <IR> and determines its effectiveness and quality. The IIRC (2016) acknowledges the cyclicality between <IR> and integrated thinking, as “individually, each element has its strengths and brings valuable benefits. Applied in combination, they can be transformational” (p. 31). Thus, the value of <IR> is argued to emerge both through the integrated thinking fostered in its creation process and in the report outcome.

As an outcome, <IR> is claimed to become a reflection of the integrated thinking process, capturing strategic coherence and resilience to uncertainty (Al-Htaybat and von Alberti-Alhtaybat, 2018) or serving as a strategic asset that solidifies stakeholder relationships and reinforces corporate legitimacy (Steyn, 2014). By helping organisations demonstrate how long-term value is generated for key stakeholders (Steyn, 2014), <IR> fosters intensified engagement and collaboration (Eccles and Krzus, 2010), offering a platform for multi-stakeholder dialogue on complex sustainability challenges through iterative learning and innovation (Devalle et al., 2021). By stimulating organisations to integrate material environmental and social risks into their decision-making and risk management, firms are better equipped to make informed resource allocation decisions, ultimately advancing sustainability performance (Eccles and Serafeim, 2015). Thus, by activating integrated thinking, it is believed that <IR> can help firms to contribute to a more sustainable society in the long term (Eccles and Krzus, 2010), along with an increasingly resilient global economy (IIRC, 2021).

Yet critics have expressed concerns about whether and how <IR> can change corporate sustainability behaviour, stemming from issues of its intended audience and usability. The IIRC (2021) maintains that “the primary purpose of an integrated report is to explain to providers of financial capital how an organisation creates value over time” (p. 5). Scholars have discussed whether <IR> overly caters to the providers of financial capital (Flower, 2015; Beck et al., 2017; Dumay et al., 2017) and have raised concerns that it may not be able to drive the systemic change needed to address social and environmental issues (Abela, 2022). Brown and Dillard (2014) argue that the ideological framing aligning with business case logics tends to reinforce the status quo, rather than challenging corporate contradictions or rerouting unsustainable trajectories. <IR>’s ability to offer sufficient value for other external stakeholders and internal firm usage has been further challenged due to its ambiguous nature (Higgins et al., 2019; Gibassier et al., 2018), potential to exacerbate injustices among stakeholders (Beretta et al., 2025) and fears that <IR> has been captured by lobby groups, investors and accountants (van Bommel, 2014; Lodhia, 2015). Flower (2015) argues that <IR> has failed to achieve its primary objective to report on sustainability and needs to be rerouted to ensure full accountability and enable sustainable managerial decisions. Accordingly, several studies call for more research on the internal processes affected by <IR> and its potential to meaningfully advance sustainability within firms (de Villiers et al., 2014; Dumay et al., 2016; Perego et al., 2016; Rinaldi et al., 2018; Barth et al., 2020; Garcia-Torea et al., 2022; Hahn et al., 2023; Songini et al., 2023).

According to the IIRC, the benefits of <IR> for organisational change are grounded in integrated thinking and the process of producing an integrated report, rather than from the report itself as the final outcome (IIRC, 2016, 2020). By adopting a multi-capital perspective rooted in a broader conception of resource management, enhanced internal collaboration and the identification of new value-creating initiatives, organisations are claimed to be equipped with the essential tools to navigate an increasingly complex external environment (IIRC, 2020). Studies are emerging to explore conceptual claims and provide empirical evidence on whether and how <IR> can generate organisational change.

Early findings suggest that <IR> enhances existing business operations rather than generating shifts to entirely new ways of operating. Stubbs and Higgins (2014) explored the internal change experienced by early adopters of <IR> in Australia revealing that <IR> fostered changes in firms' structures, processes and operations through a unified value creation narrative and cross-functional collaboration. Yet, the nature of these changes was assessed as limited and not substantively changing the underlying DNA of the firms–that is, their fundamental organisational practices, values, norms or corporate purposes–remained unaffected by <IR>. Similarly, in their single case study research, Dumay and Dai (2017) found that <IR> served more as a tool to reinforce and communicate its established culture of responsible banking to stakeholders rather than prompting more substantive internal change that would induce new ways of thinking and operating. The authors found that ResBank's robust management control systems and strong organisational culture limited the penetration of integrated thinking, as employees viewed <IR> as reinforcing existing values rather than providing new strategic direction. Echoing concerns of theoretical studies (see Brown and Dillard, 2014), Dumay and Dai (2017) concluded that <IR> may not function effectively as an internal change mechanism in all organisations, particularly where a strong pre-existing culture already aligns with responsible business practices.

Limited changes also emerged in a study by Higgins et al. (2019). By analysing IIRC texts, they classify different types of organisational change that <IR> has been conceptually claimed to stimulate; these changes were categorised under structural (internal processes and structures), cultural (norms, values and behaviours) and reporting practices (performance measurement and reporting). Adopting a multiple case study strategy of six Australian companies, the authors identified that most changes pertained to reporting practices, such as developing more relevant Key Performance Indicators (KPIs), with some evidence of cultural changes; however, little evidence was found to show <IR> generated structural changes. Accordingly, Higgins et al. (2019) found that firms are not undergoing “journeys” involving fundamental shifts to organisational practices induced by <IR>, but instead are utilising <IR> as a “toolbox” to help fit reporting to strategic decisions already made. Similarly, Rodríguez-Gutiérrez et al. (2019) explored the potential of <IR> to meaningfully advance sustainability within firms through semi-structured interviews and document analysis in 19 Spanish organisations. Their findings offered that <IR> adoption enables limited internal changes, such as enhanced executive commitment to sustainability and increased interdepartmental collaboration, particularly involving the sustainability and finance teams. Finally, in their case study investigation, Mio et al. (2016) found that <IR> fostered cohesion between the strategy and organisational culture and increased the use of non-financial indicators. While <IR> did not alter fundamental organisational values, it facilitated their internal diffusion.

A small set of empirical studies have indicated that <IR> may hold the potential to drive more substantive organisational change, beyond isolated procedural and reporting-oriented adjustments. McNally and Maroun (2018) investigated the adoption of <IR> by an ecotourism organisation in South Africa. Their findings revealed that <IR> expands the scope of ESG indicators, as non-financial data originally gathered for the preparation of the integrated report is further utilised internally to improve efficiency, identify operational challenges, track the use of resources and inform the decision-making process. Even the initial compliance-based adoption of <IR> served as a tool to raise awareness regarding the interconnectivity of different non-financial KPIs and allowed for adequate management intervention at a later stage. The authors concluded that <IR> cannot be dismissed as a mere impression management tool, as their findings demonstrated that <IR> resulted in the adoption of holistic approaches to business management and reporting, consistent with IIRC's vision. Le Roux and Pretorius (2019) explored the relationship between <IR> and sustainability embeddedness through an exploratory case study of a listed South African company. The study revealed that integrated reporting can function as a compelling driver to restructure both operational and reporting frameworks of sustainability embeddedness, leading to organisational changes mostly through interconnectedness among corporate functions that typically function independently.

Within this set, a few studies have empirically documented how <IR> can reshape managerial decision-making and the criteria by which sustainability issues are evaluated. Guthrie et al. (2017) found evidence of more substantive change within public organisations in Italy, which had transgressed incremental change and moved into the mainstream operations by involving the board and financial departments. In these organisations, <IR> became internalised and produced changes to underlying belief systems, organisational structures and management processes, embedding integrated thinking within the organisation through cross-functional ownership and the adoption of new management accounting tools to aid decision-making. Complementing this perspective, other studies emphasise that more substantive change is contingent on organisational context and capabilities, rather than arising consistently across firms. Gibassier et al. (2018) investigated how a pilot IIRC organisation implemented <IR> using the conceptual lens of sustainability reporting as a “rational myth”. Their findings point to a potential role of <IR> in progressing sustainability practices that significantly depend on the way a specific organisation envisions a common rationalised myth to implement their own version of sustainability reporting. Similarly, Cerbone and Maroun (2020) focus on how the interaction among various logics (market, professional and stakeholder) affects firms' propensity to utilise the <IR> path as part of the wider process enabling positive organisational change.

Overall, current academic research has been criticised as providing a one-dimensional account of <IR> that extensively focuses on the establishment of <IR> as a new reporting practice (Bebbington and Fraser, 2014), the operationalisation of its concepts (Rinaldi et al., 2018) and external reporting and communication aspects (Perego et al., 2016). Despite claims that “IR is, therefore, much more than reporting reform; it is about substantial organisational change” (Higgins et al., 2019, p. 1667), research has yet to provide a comprehensive understanding of <IR> as a mechanism for generating organisational change. The internal application and actual impact of <IR> remain underexplored (Songini et al., 2023), with inconclusive findings (Dumay et al., 2017; Garcia-Torea et al., 2022). It remains uncertain to what extent and how <IR> may lead to substantive organisational change in the core of a firm (Higgins et al., 2019; de Villiers and Dimes, 2022; Songini et al., 2023). Furthermore, it is unclear if <IR> truly induces organisational change or if it acts as a supporting mechanism for change that is already underway (Higgins et al., 2019), rendering the value of <IR> as a change driver contested (Rinaldi et al., 2018). As emphasised by Garcia-Torea et al. (2022), the central research question of this stream of studies has evolved from investigating “whether SAR [sustainability accounting and reporting] is associated with sustainable organisational change to discerning what kind of change is produced” (p. 25, italics are ours). It is within this endeavour that this study seeks to establish its contribution.

Our study is an inductive enquiry, utilising qualitative methods to build insights grounded in empirical evidence of how <IR> may act as an internal change mechanism. Grounded theory is adopted to offer a structured yet adaptable framework for gathering and analysing qualitative data, allowing “researchers [to] construct a theory ‘grounded’ in their data” (Charmaz, 2006, p. 1). Our enquiry is situated in the empirical context of the Netherlands, which represents a mature corporate reporting context with the first sustainability reports dating back to the early 1990s (Kolk, 2004; van Bommel, 2014).

The year 2011 marked the onset of <IR> practices in the Netherlands, with 10 Dutch firms being selected for the IIRC pilot programme (Hurks et al., 2015). In 2015, more than a third of Dutch listed companies were in the preparatory phase towards reporting in an integrated manner (IIRC, 2015). This positive trend was further reinforced by the introduction of the concept of “long-term value creation” in the Dutch Corporate Code of Governance, establishing it as a central responsibility of the management board members under the supervision of the supervisory boards, to comply with the EU Directive 2014–95/EU on the disclosure of non-financial and diversity information (Eumedion, 2017). Although the implementation of <IR> is not prescribed as such, <IR> serves as one of the means or facilitators to comply with the stated requirements, which resulted in 28 listed firms publishing an <IR> report in 2017, as opposed to 18 and 6 in the years 2015 and 2014, respectively (Eumedion, 2017).

In 2019, the Dutch Authority for the Financial Markets reviewed <IR> practices of the listed firms under its supervision, finding that albeit varying in quality and comprehensiveness, 85% of the surveyed firms disclose how value is created, with 69% and 46% disclosing the “what” and “why”, respectively. Additionally, 44% of the companies obtained external assurance for their non-financial information (AFM, 2019), with a number of companies also engaging consultants to support the implementation and enhancement of their <IR> practices. Despite stagnation in the number of <IR> reports published between 2017 and 2020 (KPMG, 2020), by the end of 2022, the Corporate Governance Code Monitoring Committee reported a slow yet gradual transition towards <IR> (MCCG, 2022), with 90% of Dutch companies disclosing sustainability information and the Netherlands ranking among the top countries globally for companies seeking external assurance on these disclosures (KPMG, 2022).

To build a grounded understanding, we collected empirical data by conducting formal interviews. Interviews are particularly effective in grounded theory research as they allow for a flexible and emergent data collection process of rich, detailed data where researchers can immediately follow up on responses to develop and refine theories directly grounded in the lived experiences of participants (Charmaz, 2006). The first author conducted interviews in three rounds. Interviewees included representatives of large Dutch organisations, academics, <IR> consultants and assurance providers working in the field. All managers and consultants were directly involved in the preparation of <IR> reports. While firm representatives are regarded as the principal data contributors, consultants, assurance providers and academics were engaged as auxiliary data sources, offering perspectives on their experiences with firms involved in <IR> and illuminating the institutional sustainability reporting context of the Netherlands.

A total of 38 interviews were conducted with 37 interviewees, comprising 24 company managers (26 interviews, three managers interviewed twice), 8 consultants (7 interviews) and 5 academics (5 interviews) (Table 1). To maintain the confidentiality of the participants and their organisations, they are identified by the type of their organisation (M-Manager, C-Consultant and A-Academic). In the first round of data collection, a total of 16 formal semi-structured interviews were conducted between May 2017 and July 2017. Dutch companies that practised <IR> were identified and initially approached through personal contacts, along with consultants and academics active in the <IR> field. Subsequent interviewees were selected using a snowball sampling technique. Finally, in this initial round, interviewees were purposefully selected to offer a variety of perspectives on the use and implementation of <IR> to facilitate the identification and subsequent illumination of categories (Charmaz, 2006). In the second round, 14 formal interviews were conducted between March 2020 and June 2020, after the initial data analysis had been completed. Here, interviewees were selected using a combination of snowball sampling, personal contacts and publicly available information. The selection was more theoretically informed and aimed at saturating the properties of emerging constructs and further refining their distinctiveness. The final round, consisting of eight interviews, was conducted between March and November 2022, focusing on firms considered most mature in their <IR> journey. Selection for this round was based on theoretical sampling informed by prior insights from earlier interviews and published <IR> reports to obtain a deeper understanding of how <IR> prompts more meaningful approaches to sustainability (Charmaz, 2006).

Interviews were conducted in English on a one-to-one basis, with the exception of two instances on a one-to-two basis. The duration of the interviews ranged from 30 to 60 minutes, amounting to over 23 hours in total. The first round of interviews was conducted in person, primarily at the interviewees' places of work. All interviews (with minor exceptions) in the second and third rounds were conducted digitally using video communication software due to the COVID-19 pandemic. In all three rounds, interviews were audio-recorded with informed consent obtained prior to the interviews. The interviews were semi-structured in design to allow for slight amendments and adjustments to the interview questions, with questions added and omitted in accordance with answers and the need to probe or follow up on interesting lines of enquiry. The interviews used a protocol that acted as a broad checklist (Lofland et al., 2006). Concerted effort was given to allow interviewees to freely share their views and perspectives and avoid imposing those of the research team by adopting open questioning and focused engagement with interpreting responses (Charmaz, 2006).

In the first round, the interviews with company managers were all broadly structured to discuss the following aspects: (1) the meaning, history and rationale behind the implementation of <IR> by companies, (2) responsibilities and involved parties in compiling the <IR> report, (3) benefits and challenges associated with <IR> and (4) internal changes resulting from <IR>. The precise questions in the protocol evolved as we began to gain a grounded understanding and were interested to follow-up on emerging lines of enquiry. Interviews in the second and third rounds focused on gaining additional insights into emerging categories and further refining and identifying their distinct characteristics. For instance, companies that regarded themselves as pioneers in integrated thinking were prompted to offer specific examples illustrating the practical application of this approach, which helped us saturate the constructs of Integrated management and Stakeholder impact reflection.

Interviews with assurance providers, consultants and academics served as supplementary components, eliciting information on the institutional sustainability reporting context characterising the Netherlands and their perspectives on how <IR> was inducing change in the Dutch firms they collaborate with. Following Charmaz (2006) recommendation to gather multiple perspectives on participants' actions, these supplementary interviews were also used to help corroborate information provided by managers, checking for inconsistencies or signs of potential greenwashing by companies, particularly regarding claims about the extent to which <IR> has driven substantive change. In addition to offering triangulation, these interviews contributed to the construction of categories by offering a broader view of <IR> developments. Given their exposure to a wide range of firms, they were well-positioned to identify practices that may not have emerged within our principal dataset.

Data analysis proceeded simultaneously with data collection in an iterative process (Corley and Gioia, 2004; Gioia et al., 2013). Analysis began with the creation of contact summary sheets (Miles and Huberman, 1994) during the interview process and was followed by the full transcription of the interviews by the first author. These were utilised as a “running commentary” that aided our interpretive work through capturing our impressions and observations of the interview, what we believed we may have learnt and how we could further our understanding (Eisenhardt, 1989). Additionally, they helped shape the focus of future interviews, refined coding structures and facilitated more accurate and nuanced interpretations of the data (Miles and Huberman, 1994). Led by the first author, coding proceeded in three rounds using the computer-assisted qualitative data analysis software NVivo.

Firstly, open coding was conducted to examine interview transcripts on a line-by-line basis (Lofland et al., 2006). The coding created tentative labels and categories for the data incidents, each describing how <IR> acted to generate internal change. Open coding sought to retain “in vivo” phrases used by interviewees, such as “defining value in a broader sense” or “breaking down internal silos”. Secondly, focused coding was conducted to identify recurrent themes in the data and establish the relationships among codes. Codes were compared and probed for variation, merged when appropriate and collapsed to form categories and sub-categories (Lofland et al., 2006). For example, we grouped the first-order constructs of “providing a clearer direction to our strategy”, “reflecting on the way you are doing business”, “identifying what is most important” and “systematically tracking full range of progress” into the second-order theme of Adjusting strategic direction and the aggregate dimension of Organisational alignment. Thirdly, the emergent themes were discussed by authors and an initial data structure of <IR> as an internal mechanism of organisational change was developed.

We developed our final data structure through a highly iterative process (Locke et al., 2022). We moved through cycles of explanation-seeking by collecting more data to add further nuance to our understanding of constructs, forming and reforming constructs and finding agreement through author discussions (Locke et al., 2022). Through this process, our interpretive work challenged our initial understanding with discrepancies signalling the need to further develop our unfolding explanation (Mees-Buss et al., 2022). For example, additional data led to the merging of two aggregate dimensions into Organisational alignment. We continued to pose and discuss alternative explanations until we arrived at our data structure, which we believe best corresponds to the data (Harley and Cornelissen, 2022). Figure 1 shows the final data structure.

Our analysis identified four practices through which <IR> may act as an internal mechanism of organisational change, labelled as follows: (1) Value creation narration, (2) Organisational alignment, (3) Integrated management and (4) Stakeholder impact reflection. We found the Value creation narration practice to be most common among organisations and Stakeholder impact reflection to be the rarest, with indications that it was limited to organisations that were most experienced in corporate sustainability reporting. For each practice, we provide an explanation of how <IR> supported and stimulated change within the interviewed organisations.

<IR> can provide managers with the opportunity to create a single narrative on how the firm creates value. <IR> offers firms a “structured” (Interviewees M-4, M-16, M-17) approach to creating a central value creation narrative through the use of concepts such as the six capitals and the business model. As Interviewee M-16 explained: “I think it helped to tell our story better in a more structured way, there are some concepts like a business model, the set-up and order of things helps to tell your story in a structured way”. This structure enables firms to tell the “entire story” (Interviewee M-1) and is grounded in “real facts [and] the real accountable data” (Interviewee M-2). Moreover, <IR> can help solve the decoupling problem of annual and sustainability reports as “Now there is a link between strategy, goals and our sustainability goals included, this is now one story in the annual report” (Interviewee M-12). We identified this practice to have the following two components: Reinterpreting purpose and Unifying narratives.

Reinterpreting purpose. <IR> enables value to be understood beyond financial metrics and to be perceived in broader terms by encompassing environmental and social considerations. This opens opportunities for defining and redefining an organisation's purpose, considering a more complete picture of the value being created and (to a lesser degree) destroyed by firms' activities. Interviewee M-2 noted, “So why are we here and what is it that the world needs and how can we respond to that need”, highlighting how <IR> can surface fundamental questions about an organisation's purpose. In parallel, Interviewee M-2 observed, “You make it clear who you are and what your impact is”, suggesting that <IR> also enables a more explicit articulation of the organisation's role and the value it creates. The inputs are derived from stakeholder discussions, the materiality assessment and an analysis of the external context, including industry developments and trends. For some organisations, change was limited to enhanced clarity and articulation of their purpose, while for others this process facilitated more substantive shifts, including new formulations of purpose, as Interviewee M-19 outlined:

As Interviewee M-19 elaborated, <IR> can assist companies which have long operated in routine ways and may have “lost a little bit of sense why they are actually doing that” or forgotten their “licence in society”, offering support in revitalising and reinvigorating their entire approach. This resonates with other interviewees as <IR> helped to link value creation to “what the purpose is of the organisation, originally” (Interviewee C-1), which provides clear direction for setting goals and aligning them with a sustainability vision (Interviewee M-1).

Unifying narratives. Firms may struggle with the consistency of external communications across formats, particularly when releasing separate financial and sustainability reports. These two reports may be misaligned because different internal preparers curate them for distinct audiences. As Interviewee M-2 described: “Sustainability and financials were two silos; it was not a story. When you read an environmental report, it was one story of the company and then when you read an annual report, it was another. Like two companies”. By consolidating corporate communications into one report prepared jointly by the finance and sustainability departments, <IR> can decrease the likelihood of inconsistent messaging, as “Once it's published, then that's the truth […] for all stakeholder questions” (Interviewee M-18). Interviewee M-9 extended the argument of <IR> being a provider of:

This integration reflects a form of limited change, as it primarily addresses process efficiency and communication alignment without necessarily challenging deeper organisational practices or paradigms. At the same time, <IR> may aid the consistency between a firm's external communications and internal organisational practices to ensure a coherent value creation narrative. <IR> can resolve the problem that separated reporting requires preparers and internal users to constantly cross-check between two formats to understand organisational practices on issues. Following the publication of the integrated report, different departmental functions can “see on paper where they stand and where there is room for improvement” (Interviewee M-9), thereby reinforcing a unified narrative of how value is created and sustained within the organisation.

<IR> can act as a mechanism to strengthen the internal alignment across organisational hierarchies and departments around purpose and strategic objectives. Alignment is crucial for firms to ensure that work carried out is meaningfully contributing to the purpose of the firm and counterproductive work is reduced or eliminated. <IR> enables firms to assess the compatibility of their strategic frameworks, identify potential sources of misalignment and take remedial actions. It also helps counter the silo effect of departments within companies and fosters unity for synergistic activities oriented towards collective purposes. As interviewee M-7 explained:

This illustrates how <IR> can guide organisations in aligning operational processes and key performance indicators with their broader strategic and value-creation objectives. Our findings suggest that the practice of organisational alignment may occur through: Adjusting strategic direction, Reforming corporate targets and Establishing structural coherence.

Adjusting strategic direction. Practising <IR> allows firms to assess the suitability of the current firm strategy to achieve the organisational purpose and to respond to changes in the external operating environment. This goes beyond surface-level adjustments, representing a more substantive change, as it encourages firms to reassess foundational elements of their strategy and ensures that their objectives are meaningfully connected to long-term value creation. If firms align their strategy, performance, risks and prospects, they can be better placed to review the relevance of the strategic objectives in the value creation process, as Interviewee M-1 observed:

By revealing the full range of capital dependencies and outcomes of various outputs of business activities, firms may assess the extent to which the current strategy is proving effective and whether it is fit for purpose. Interviewee M-7 remarked:

The strong focus of <IR> on material issues, that may be broader and more encompassing than previously identified as part of the sustainability reporting process – albeit limited to financial materiality when <IR> guidelines are rigidly followed – also causes firms to question the extent to which the current strategy is suitably attending to the full range of what is important for value creation. While the outcome of the integrated report may provide this opportunity, much benefit is derived through the <IR> creation process:

Finally, <IR> not only encourages alignment between strategy and organisational purpose but also supports grounding strategy in the external operating environment, as Interviewee M-2 highlighted: “Integrated reporting, the way we are doing it now, has helped us to think about our strategy and how to address trends and developments to find our way in correctly doing [achieving] that”.

Reforming corporate targets. <IR> can stimulate firms to review their existing corporate targets and create new ones that align performance measurement with how they seek to achieve long-term value creation. As Interviewee M-7 explained:

The <IR> process provides firms with an opportunity for reflecting on past and current performance and encourages a forward-looking perspective for formulating KPIs and targets that can guide the organisation for long-term value creation. For Interviewee M-11's company, <IR> has proven to be: “A driver to get the organisation more involved in sustainability targets and missions”. Firms are encouraged to reformulate existing corporate targets and create new ones that integrate sustainability into their strategic priorities, ensuring all material issues and value creation aspects are addressed – reflecting more substantive change. Interviewee M-11 highlighted the significance of formulating goals by stating that, “If you don't set targets, nothing is going to change. I think it is the same for reporting, if you don't set an ambition to report on it, why should people think about integrated thinking”. Additionally, <IR> has been pivotal in identifying misalignments between strategic goals—such as health and safety targets and their corresponding improvement plans—and their execution at the operational level. As Interviewee M-7 noted:

Ensuring that strategic objectives are effectively translated into day-to-day operations is essential for driving long-term value creation. Finally, <IR> requires firms to then ensure that processes are set up for reliable and timely data collection, “They cannot just estimate numbers, must be reviewable and accountable. The real stories, the real facts, the real accountable data” (Interviewee M-2).

Establishing structural coherence. <IR> can help align departments and hierarchical levels within firms by facilitating internal communication, collaboration and coherence towards a common purpose. The creation of an integrated report calls for contributions from multiple departments within a firm, including the C-suite, as a wide range of information is gathered on the firm's value creation. Interviewee M-6 illustrated this as: “I speak to people from finance, strategy, IT, also to the CIO. What we see, since we work on integrated reporting, all these stories more and more fit together, we are walking towards one goal”. As it also involves the firm's board of directors, who are at least engaged in the governance and approval of the final integrated report, this necessitates that they be acquainted with the content and support how the firm's value creation is represented and externally communicated. In some cases, the board is “highly involved” in collaboratively establishing the “top line message, which you are going to tell” (Interviewee M-6). Yet, these changes are rather limited in nature, as they focus on improving processes, structures and communications rather than fundamentally reshaping the organisation's underlying values or strategies.

This process can lead to new internal connections and enhance communication among different departments, such as sustainability, finance, corporate communications and legal, which represent the “core team” with “regular working sessions to establish a specific chapter or content [of the integrated report]” (Interviewee M-1). In some cases, <IR> may help break down an internal “silo” (Interviewee C-2) structure, as Interviewee C-2 further described:

Within the company of Interviewee M-19 this was achieved by “building bridges” (Interviewee M-19) between departments and hierarchical levels that typically have limited interaction. However, as Interviewee M-13 points out, this is not the case at all organisations:

Furthermore, <IR> may provide the tools to highlight and strengthen the interconnectivity among different departments, hierarchical levels and their consecutive strategies, as it aids “getting one view on [the company] and the future” (Interviewee M-6); this simultaneously limits “the risk that people think in silos, protect their own stakes first above others” (Interviewee M-7). An important way to achieve this is by creating new shared KPIs between departments and hierarchical levels promoted by <IR>. Interviewee M-2 further noted the benefit by stating that:

<IR> can facilitate managers to think and act in an integrated manner about how the organisation functions to create value using financial and non-financial information and to incorporate social and environmental considerations within the decision-making process. Managers are encouraged to adopt a multi-capital approach and connect business activities to outputs and outcomes beyond short-term financials, as Interviewee M-7 observed; “We had a dialogue with internal stakeholders […] But what drives the decision to take this, what are the value drivers to take this decision? […] So you look at more metrics than only short-term financial value”. This practice reflects more substantive change, as it involves a fundamental shift in managerial mindsets and decision-making processes, moving from a narrow financial focus to a broader, holistic view of long-term value creation. Interviewee M-7 continued by highlighting the shift to integrated management:

Integrated management requires managers to think beyond their own department's silo structure and objectives, considering how their decisions impact other parts of the organisation and contribute to the success of the entire company. This can result in more interdepartmental discussions and greater involvement in decision-making processes. Interviewee M-7 illustrated this with an example:

Our findings suggest that integrated management occurs through two ways, that is, by Inspiring integrated thinking and Facilitating integrated decision-making.

Inspiring integrated thinking. Central to <IR> is the firm-centric consideration of how current business activities impact a firm's ability to generate value over time, by recognising their dependence on and impact across multiple forms of capital. This causes firms to measure the outcomes of a wide range of outputs (e.g. products, emissions, waste) and consider how they strengthen or weaken the capital on which they depend. In turn, this can change how managers think about value creation and stimulate holistic discussions across departments and hierarchical levels. Interviewee M-18 deliberated on new integrated thinking in their organisation; “So it's an ongoing process and now the integrated thinking really starts, now business control sees the value of the value reporting, and we are talking about multiple capitals, no longer only financial capital, but human capital, intellectual capital”. Similarly, Interviewee M-1 observed; “Suddenly you have a lot more people interested in value creation, materiality, thinking integrated on creating value for a lot of different stakeholders on things they find material”. Interviewee M-8 reflected on his/her initial experience when s/he was hired to develop the integrated report:

<IR> may foster the establishment of structures that encourage integrated thinking throughout an organisation and potentially prompt the C-suite to adopt a broader multi-capital perspective on value creation, as Interviewee M-8 recalled a conversation with a colleague:

Employees are viewed to have an increased interest and understanding of concepts that enable integrated thinking, such as value creation, materiality and stakeholders. Interviewee M-4 emphasised that a useful tool for bridging potential knowledge gaps across the organisation could be “endlessly talking about materiality and value creation topics but always trying to make the connection between what it could do to the department you are talking to, as well as providing examples of ongoing projects within the firm that contribute to value creation”. Regarding the latter aspect, Interviewee M-13 described the reactions of colleagues following the presentation of an investment impact analysis project that connected business activities to multiple capitals—specifically “in terms of money, in amount of employees, in terms of environmental impact”—as: “Oh, that is what you mean with value creation, so that is value creation!” Instead of employees asking why specific functions should engage in long-term value creation for the company, the question may change to how. Building on this, Interviewee M-13 reflected on the change in the questions they receive from managers; “I receive an increasing amount of questions on ‘how can I implement sustainability in my activities?’ And that is the right question, I think. Not the question ‘why should we do it?’ but ‘how can we do it?’”

Facilitating integrated decision-making. Our findings suggest that <IR> can assist managers in making decisions based on a holistic understanding of capital dependencies and impacts and the elevated importance of non-financial information. Decision-making processes may consider multiple criteria of capital outcomes that go beyond financial capital, guided by multi-capital KPIs. This is because managers activate their integrated thinking fostered through <IR>, as Interviewee M-8 observed: “That's what integrated reporting does. And that's of course the aim of it – that you act integrated”. Interviewee M-1 illustrated how social and environmental criteria were integrated alongside financial considerations in the early stages of project decision-making:

Interviewee M-7 reflected on a decision to switch to electric delivery vans, which considered the effects across multiple capitals of value creation (restricted to capitals with financial materiality) and stated:

Revisiting this example, Interviewee M-7 further deliberated on the impact on other capitals, noting how design specifications affect the deliverer's work experience: “If [the loading specifications] are too low or narrow, it directly impacts the work of the deliverer […] if he bumps his head all the time, he won't be happy”. In this way, the example illustrates how practical decision-making entailed reflections across multiple capitals, including environmental implications (natural capital), physical infrastructure and operational performance (manufactured capital) and employee well-being and usability (human, social and relationship capital). While decision-making based on multiple capitals may not be new to organisations, <IR> supports it by offering a more structured and explicit approach. Interviewee M-4 emphasised:

Once more, the C-suite and senior management were not excluded from these implications but were instead where most value may be derived, as also expressed by Interviewee M-4: “It helps decision-makers, that is also employees, but more on a senior level make better decisions”.

Although the focus is on financial materiality, our findings suggest that the multi-capital approach allows managers to better capture financial impacts across the short, medium and long term, including those that are often hidden or overlooked. As a result, business decisions may become less straightforward, as the option with the greatest direct short-term financial reward may no longer be the most preferred. This can reveal internal tensions within capitals, such as reducing the financial performance of a department to improve that of the company as a whole, “That was basically the argument to go for [option B], which was more expensive in procurement costs, but save[d] a lot of other costs” (Interviewee M-7). It can also reveal tensions across capitals, as Interviewee M-6 explained:

An important way that <IR> improves integrated decision-making is by elevating the prominence of non-financial information to be used in conjunction with financial information; “The board and others acknowledge that the amount of non-financial information is increasing and becoming more important in comparison with the financial information” (Interviewee M-10). <IR> stimulates firms to create integrated dashboards of financial and non-financial indicators for performance measurement that can be used to guide decisions. Non-financial indicators that were previously viewed as relating only to “sustainability goals” of the firm become understood as “business goals” and “if it would have been a separate report, that wouldn't have happened” (Interviewee M-18). For instance, non-financial information on health and safety incidents can be more easily related to its impact on value creation, such as stoppages in the production process (Interviewee M-1). This bolsters managerial understanding of the instrumental case to minimise incidents and supports the willingness to invest in avoidance. Furthermore, because these effects are now understood as business goals, more emphasis is being placed on providing reliable information and tracking performance at defined frequencies.

Finally, <IR> may stimulate firms to adopt a broader understanding of their impact. This can go beyond understanding the direct impact of a firm's current activities on its own ability to create value, to also considering how its operations impact the broader societal system and shape the ability of others to create value. As Interviewee M-5 remarked:

Such a shift reflects a substantive change, prompting firms to broaden their perspective to consider the cascading effects of their actions and embrace a more holistic understanding of how value is generated within their value chain. However, there are limitations to the extent that <IR> helps firms fully understand these ripple effects throughout systems (Sterman, 2001) or pinpoint where they can have the most meaningful impact (Meadows, 1999). Despite this, <IR> can still encourage firms to place further meaning on the outcomes of business activities. We identified two ways through which <IR> can influence practising stakeholder impact reflection, that is, by Tracking stakeholder impact and Identifying external synergies and trade-offs.

Tracking stakeholder impact. Integrated thinking encourages firms to consider the impact of their own outcomes and how they can unlock future value. This includes setting up processes to measure the impact of changes in capital on the broader societal system, as Interviewee M-2 explained; “Being aware that you are so embedded in society and in this region […] with a big responsibility”. It resonates with the foundational logic of the IIRC, which focuses on ensuring that firms develop viable business models in the long term by anticipating stakeholder expectations, identifying internal and external issues affecting the modus operandi of the firms in the future and by reflecting on the “kind of thoughts that fundamentally change your business model in a response to the value created” (Interviewee M-5). Interviewee M-5 further expanded this view, noting: “And that means that it helps you to think differently, and it helps you to see new opportunities, and it also helps you to see where you don't have a sustainable business model”. For some firms perceived as leaders in corporate reporting, <IR> was stimulating them to move beyond thinking only about the potential impacts on the firm. These firms were using <IR> to more widely consider how their output was affecting their supply and value chains, stakeholders and society at large. For example, a firm may seek to track the societal impact of providing customers with products and services. What difference may this have made toward societal goals such as ending poverty, hunger and reducing inequalities? Interviewee M-18 recalled deliberating such a question by stating that, “If we have touched [X] million people, what does that mean from an impact perspective and maybe some touches are less impactful than others and should we make a distinction? And how are we going to measure it?” Furthermore, Interviewee C-5 reflected on [company M-1], which:

As Interviewee C-5 summarised, “You can create a better balance in what you are willing to invest versus what you are expecting to get out of it”, reinforcing the idea that <IR> can support informed decision-making by balancing short-term costs with long-term benefits across multiple capitals. The above examples demonstrate how firms are tracking the societal benefits of products and services. However, tracking stakeholder impact is restricted to the extent that the firm first assesses these issues as material. Interviewee M-8 expressed this plainly:

Firms that adopt even a broad interpretation of financial materiality, as outlined by the IIRC, may miss negative or positive societal impacts if they are deemed to have no impact on the value creation of the firm.

Identifying external synergies and trade-offs. For some firms, <IR> introduced the opportunity to look beyond their own direct impact and consider how their value creation activities were enabling or hindering other stakeholders to create a positive impact. <IR> stimulates these firms to understand the ripple-effects of their business activities. As Interviewee M-5 explained, “ … we see so many opportunities in this transition to sustainability of our customers, that we will help them. It's not about us being so sustainable – we are, but it's about helping our customers”. Interviewee M-5 further elaborated on the need to consider the full scope of their customers' operations; “These companies have their own value chains, and these value chains are not always in Amsterdam Zuid [South] or Rotterdam Centre. They are in Brazil, wherever and things happen there”. Identifying how firms can capitalise on external synergies to create more meaningful and far-reaching impact is illustrated by Interviewee M-18 as follows:

By identifying these effects, firms can gain a more systemic perspective on impact, which could alter how they see their own impacts. For instance, outcomes that are small in magnitude may reveal themselves to be highly meaningful because they enable and nudge other firms to improve their positive impact, as emphasised by Interviewee M-5:

The value of <IR> as a mechanism for organisational change is contested, as scholars have yet to establish whether and how <IR> can fulfil this role (Stubbs and Higgins, 2014; McNally and Maroun, 2018; Higgins et al., 2019; Rodríguez-Gutiérrez et al., 2019; Garcia-Torea et al., 2022; Songini et al., 2023). By examining the mature reporting context of the Netherlands, our study contributes to extant literature by empirically exploring how it may act as an internal change mechanism for sustainability. Through a qualitative analysis, our study inductively derived that <IR> may initiate organisational change through four distinct practices: (1) Value creation narration, (2) Organisational alignment, (3) Integrated management and (4) Stakeholder impact reflection. We conceptualise these practices into two sets of empowering and implementing practices. In Figure 2 we present an empirically grounded model of how <IR> functions as an internal mechanism of organisational change by leveraging these practices.

Empowering practices, comprising Value creation narration and Organisational alignment, establish a platform for activities that may enhance sustainability performance but, on their own, do not directly make the company more sustainable. For instance, <IR> fosters interconnectivity among departments and hierarchical levels by promoting shared KPIs and reducing siloed thinking, positioning the firm for improved collaboration and internal alignment without directly addressing its sustainability outcomes. Implementing practices, comprising Integrated management and Stakeholder impact reflection, build upon these foundations and are more execution-oriented, directly contributing to potential improvements in sustainability performance. For example, <IR> prompts firms to measure the impact of their current activities on the capitals they depend upon, enabling more informed decision-making that supports sustainable value creation in the future.

Our model indicates that <IR> can invoke organisational change through a range of distinct practices. While earlier studies suggest that <IR> primarily functioned as a tool for reporting reforms and structural adjustments (Stubbs and Higgins, 2014; McNally and Maroun, 2018; Higgins et al., 2019; Rodríguez-Gutiérrez et al., 2019), our findings offer evidence that <IR> can induce broader change to strategic frameworks, managerial mindsets and decision-making processes. By providing an empirically grounded framework, our study responds to calls to support conceptual claims and extends extant knowledge on the differentiated ways in which <IR> may be harnessed in practice. Furthermore, our analysis provides a nuanced understanding of the practices through which <IR> generates change, offering detailed insights into their functioning. In doing so, our findings expand beyond prior empirical contributions, advancing <IR>’s recognition as a managerial tool with a broader role in meaningfully advancing sustainability within firms.

Notably, our findings should not be interpreted to mean that organisations will necessarily utilise <IR> through all four practices. Our analysis indicates that implementing practices may be more strongly associated with firms that have advanced reporting capabilities. We invite future research to delve deeper into the interplay between the empowering and implementing practices to examine their contingency and reinforcement. A longitudinal process study could provide valuable insights into the shifting practices of <IR> within firms over time, their potential complementarities or trade-offs and the evolving role of <IR> in driving organisational change.

Our empirical model unveils two insights and related implications for advancing our understanding of the role of <IR> as an internal change mechanism. Firstly, the repertoire of practices offers potential avenues for <IR> to generate change and shows how <IR> has the capacity to advance firms from their existing maturity levels in managing sustainability. Our findings confirm that these practices may be employed such that they only generate limited change within a firm by fine-tuning existing ways of working. For instance, consistent with extant studies (Stubbs and Higgins, 2014; Higgins et al., 2019; Rodríguez-Gutiérrez et al., 2019), our findings offer that <IR> can enable organisations to negotiate a coherent value creation story and can act to support ongoing initiatives for sustainability. For example, some organisations used <IR> to encourage greater organisational engagement with sustainability targets and missions. In other instances, these efforts aimed at enhancing internal communications or implementing procedural adjustments – such as fostering cross-departmental collaboration or achieving narrative consensus – rather than addressing critical structural misalignments needed for more substantive change, echoing earlier findings (Stubbs and Higgins, 2014; Higgins et al., 2019).

However, our findings reveal that the repertoire of practices could be applied to induce more substantive change, whereby new ways of thinking and operating are introduced. For instance, our analysis indicates that for some firms <IR> acted as a catalyst to define corporate purpose for the first time. For firms without strong sustainability reporting legacies or deeply rooted commitments to sustainability such changes could be important building blocks to enhancing sustainability management. <IR> also triggered a reassessment of foundational strategies in other firms, instilling a broader focus on material issues and extending beyond traditional sustainability reporting to address capital dependencies and long-term value creation. In this sense, contrary to extant studies (Higgins et al., 2019), <IR> was not restricted to supporting change already underway but also induced new ways of working. Our findings offer that <IR> can prompt firms to establish new CSR governance frameworks to embed sustainability into strategic and governance considerations, integrate multiple capitals into decision-making and set up integrated dashboards and shared KPIs that transcend departmental and hierarchical boundaries. Thus, our findings demonstrate <IR>’s capacity to go beyond its use as a “toolbox” (Higgins et al., 2019), but potentially serve as a mechanism to drive substantive organisational change.

Future research could move beyond the binary framework of limited versus substantive change by developing processual understandings of how <IR> enables organisational change over time. For instance, changes that could simply be perceived as limited in the short-term may have a role in generating significant shifts in organisational practices in the long-term as they accumulate and interact with other adjustments (see Plowman et al., 2007). This underscores the importance of adopting longitudinal research designs to capture the evolving dynamics of <IR> over time, and we encourage future studies to employ such designs to gain deeper insights into these dynamics.

Secondly, our findings begin to uncover much-needed insight on how <IR> may support broader integrated thinking and enhance understanding of impact beyond the firm and across the value chain through the Integrated management and Stakeholder impact reflection practices. While prior conceptual work argued that <IR> could stimulate more holistic perspectives, our analysis illustrates how these practices unfold in organisations. Our findings reveal how <IR> may enable managers to think more holistically across the entire organisation, including senior hierarchical levels and integrate multiple capitals into decision-making processes. This aligns with previous studies suggesting that <IR> can promote more holistic discussions across the organisation, increase involvement of the board (Guthrie et al., 2017) and elevate the position of sustainability departments and topics across the organisation (Rodríguez-Gutiérrez et al., 2019).

Our findings extend beyond these studies by offering that <IR> can cause changes to decision-making that incorporate environmental and social criteria and allow for a deeper reflection on value creation and impact. For some companies, which we believe were most mature in their corporate reporting practices, <IR> was used to enable managers to make decisions that prioritise positive impacts across various types of capital, even favouring such decisions over those aimed solely at achieving maximum financial gain. Additionally, new understandings of value creation and impact were being realised, which transcended the firm itself to incorporate their supply and value chains, stakeholders and society at large.

Nevertheless, we acknowledge that the conceptualisation of <IR> as advocated by the IIRC could act as an important limitation. The narrow interpretation of financial materiality may impede an organisation from reporting and giving due consideration to the full scope of positive and negative impacts, thereby missing potentially critical information to understand sustainability performance. Considering the institutional shifts and complexity of the standard-setting processes taking place globally in this area, this might be of relevance to companies that will need to fulfil jurisdictional requirements in line with the IFRS (de Villiers and Dimes, 2023). We recommend future research to seek further insight into how <IR> and other frameworks of sustainability reporting may support understanding of impacts on social-ecological systems – for instance, whether they can be used to support managerial understanding of system properties such as resilience.

Finally, while our findings indicate that <IR> has the potential to serve as a useful mechanism for inducing change, it should not be perceived as an all-encompassing panacea. In some instances, <IR> changed the mental models of managers, altering how they understand sustainability challenges through the adoption of a multi-capital perspective. Yet, little evidence emerged from our analysis regarding its impact on deeply rooted value paradigms that underlie how managers organise their operations. This reflects the continued persistence of business case perspectives in sustainability reporting (Brown and Dillard, 2014). Although <IR> led to the discontinuation of some unsustainable business activities, we did not find evidence of <IR> prompting a broader reorientation of inherently unsustainable business models. This indicates that there may be potential boundaries to <IR>'s ability to drive foundational reconfigurations of the organisation and/or that practitioners are not seeking to utilise it for such purposes (Eccles and Serafeim, 2015). These considerations also resonate with a broader debate – reaching beyond the scope of <IR> alone – regarding the extent to which sustainability accounting and reporting can fundamentally change organisations (Garcia-Torea et al., 2022; Hahn et al., 2023). Accordingly, future research could explore additional contingency factors influencing the actual impact of <IR>, including the role of market forces, individual agency and organisational culture in shaping its effectiveness.

We also acknowledge that our study is not without limitations. Firstly, our findings are based on an in-depth analysis of <IR> practices within large organisations in the Netherlands. Future research is needed to ascertain the transferability of these findings to other contexts and firm sizes. Notably, our findings were drawn from a mature sustainability reporting context, which has significant institutional support for <IR>. This could be further explored to gain insights into the institutional, industry and organisational conditions that need to be met for substantive change to occur within organisations. Secondly, our data collection relied on the retrospective accounts of interviewees, which may not be completely free from bias. While our analysis sought to triangulate data incidents across data sources, we recognise that an interviewee's inaccurate recall or purposeful deception could potentially distort our findings.

This study explores whether and how <IR> can drive organisational change. Our findings reveal how <IR> can act as a mechanism of organisational change by providing an inductively generated repertoire of empowering and implementing practices. The relevance of this research is underscored by the emergence of the newly established IFRS sustainability standards, which closely align with the principles and framework of <IR>. Although the adoption of these standards remains optional for national jurisdictions, recent evidence shows significant momentum towards their implementation. As of June 2025, the IFRS Foundation (2025) reported that 36 jurisdictions have either adopted the ISSB Standards in full or in part or are progressing towards embedding them into their regulatory frameworks. If fully adopted, these standards may have the potential to drive changes in firms' sustainability management practices through the four practices identified in this study.

Our analysis highlights how <IR> can empower managers to engage in integrated thinking and consider factors beyond purely financial capital when making decisions. In some instances, decision options that yielded advantageous financial results but negatively affected other capitals began to create frictions, prompting them to be reconsidered. Furthermore, for a few firms, <IR> supports the emergence of broader perspectives on value creation and impact that extend beyond the scope of the organisation itself to include how sustainability efforts of value chain actors can be enabled. This expanded conceptualisation of impact also comprises various stakeholder groups and society, with firms striving to evaluate their societal impact in light of broader sustainability themes, such as eradicating poverty or minimising inequalities.

In some instances, the focus of <IR> on long-term value creation encourages firms to re-assess their existing products and services to identify those capable of unlocking future value. This is rooted in proactive anticipation of the changing needs and expectations of different stakeholders, as well as changes in the firm's operating environment. Although these developments signify an important step toward recognising <IR> as a managerial tool to drive more sustainable business outcomes, the shortcomings of a rigid application of the <IR> Framework – such as its strong focus on financial materiality – should not be overlooked.

The authors express their gratitude to the editor, Prof. Lee Parker, and to the anonymous reviewers for their detailed comments and constructive critiques. The authors also thank the interviewees for generously sharing their insights. Furthermore, we are grateful to colleagues at the Department of Business-Society Management at RSM for their insightful feedback, particularly Prof. Joep Cornelissen. Finally, the authors thank members of the CSEAR community for fruitful discussions on an earlier version of the manuscript at the 31st International CSEAR Conference.