Integrated reporting as organisational practice: a case study from Japan Open Access

Integrated reporting (<IR>) has been promoted as an innovative reporting practice to address the potential of accounting to reshape organisational behaviours to incorporate sustainability at both operational and strategic levels (Busco et al., 2018; Quarchioni et al., 2021). Proponents, notably the International Integrated Reporting Council (IIRC), argue that <IR> enhances accountability by encouraging companies to disclose their “value creation” processes across financial, social and environmental dimensions (IIRC, 2013) ^[1]. Central to this framework is the concept of integrated thinking – defined as managerial attention to interdependencies between operational units and the “capitals” (e.g. natural, human) they affect (IIRC, 2013, p. 3). However, critics question whether <IR>’s aspirational rhetoric translates into substantive organisational change, warning that <IR> may be reduced to a pragmatic tool or serve to privilege financial metrics over sustainability goals (Cheng et al., 2014; Feng et al., 2017; Flower, 2015; Humphrey et al., 2017).

Following establishment of the IIRC and publication of the integrated reporting framework (<IRF>), <IR> has received growing attention from both practitioners and academics. National-level adoption, such as South Africa's regulatory mandate and Japan's institutionalisation of <IR> as standard practice, has further embedded <IR> within corporate reporting systems. However, recent shifts in sustainability governance – notably the consolidation of the IIRC and Sustainability Accounting Standards Board (SASB) into the Value Reporting Foundation (VRF) in 2021, and subsequently its absorption into the International Sustainability Standards Board (ISSB) in 2022– have sparked debate about <IR>’s long-term viability (O'Dwyer et al., 2024; Rowbottom, 2022; Songini et al., 2023; Tweedie, 2024). While some question <IR>’s future under the ISSB, the board has reaffirmed its commitment to the IIRC's principles, emphasising <IR>’s foundational role in harmonising global sustainability reporting (IFRS Foundation, 2023).

Beyond regulatory shifts, persistent debate concerns how sustainability information is disclosed, prioritised, and utilised – highlighting tensions between compliance-oriented reporting and transformative sustainability integration (Adams and Abhayawansa, 2022; Michelon et al., 2020). As international sustainability disclosure standards evolve – exemplified by the European Union's (EU) recent Omnibus revisions, which highlight a gap between regulatory ambition and organisational realities – <IR> remains a valuable resource for examining how sustainability-related practices are enacted on the ground.

Although prior studies have explored <IR> implementation (e.g. Guthrie et al., 2017; Stubbs and Higgins, 2014), its contested nature – including debates over sustainable value creation and uncertainty regarding practical effects – has fostered a managerialist tendency (Doolin, 2003) that privileges outcome-based evaluations, often reducing assessments of <IR> to a binary of whether it “works” or “fails”. Such framings obscure how <IR> actually unfolds in organisational life, leaving limited insight into the situated, day-to-day practices through which sustainability ambitions are pursued, reshaped or constrained.

Critical questions remain: How are <IR> practices enacted within organisations, and in what ways do they engage with organisational dynamics? This study addresses this overarching gap by examining the everyday implementation of <IR>, focusing on how reporting work is negotiated and accomplished in practice.

While prior empirical studies (e.g. Higgins et al., 2019) have shown that <IR> is contextually mediated, few have traced how these dynamics materialise through the daily doing of organising. Drawing on Schatzki's (2002) theory of social practices, we analyse how <IR> is organised through rules, practical understandings, teleoaffective structures and general understandings. This holistic application extends existing practice-based <IR> research (e.g. Lodhia, 2015; Roszak and Laguecir, 2024), particularly by foregrounding the understudied concept of “general understanding”.

To this end, we conduct a longitudinal case study of Energy-Tech (pseudonym), a Japanese manufacturer that adopted <IR> in 2015. Using interviews, participant observations and document analysis, we examine how <IR> implementation unfolds in everyday organisational activities.

Our findings show that while <IR> prompted certain context-specific adaptations, its engagement with core management processes remained shaped by entrenched organisational arrangements. Initiatives such as materiality analysis did not function as direct strategic interventions but evolved through existing procedural rhythms, with limited debate about organisational priorities. Rather than acting as a catalyst for transformative change, <IR> practices became negotiated accomplishments within established configurations of practice and coordination. Understanding how such negotiations take shape has significant implications for advancing the integration of sustainability into management practices through corporate reporting – the original ambition of <IR> − and now a central concern for international standard setters such as the ISSB.

This study makes three key contributions. First, it advances practice-based accounting research by mobilising all four elements of Schatzki's (2002) theory – rules, practical understandings, teleoaffective structures and general understandings – to the analysis of <IR>. This holistic approach extends prior work that has either omitted general understanding (Lodhia, 2015) or emphasised specific elements within cross-sectional designs (Roszak and Laguecir, 2024). Second, it provides empirical insights into <IR> implementation in Japan by tracing the day-to-day work of multiple organisational actors, showing how managerial work unfolds as an emergent process shaped by regular, situated actions (Feldman and Orlikowski, 2011). Third, this study invites a reconsideration of constraint in change – not as the result of structural deficiency or individual resistance, but as an emergent effect of how organisational life is patterned through situated practices. In doing so, the study contributes to debates on sustainability integration by showing that the transformative potential of <IR> depends not on formal design but on how reporting practices are taken up, adapted and negotiated within everyday organisational routines.

The remainder of the article is structured as follows. Section 2 reviews prior research on the organisational dynamics surrounding <IR> practice. Section 3 introduces the Japanese institutional context, and Section 4 outlines the theoretical background, drawing on Schatzki's theory of social practices. Section 5 details the approach to data collection and analysis. The findings are presented and discussed in Sections 6 and 7, respectively, and Section 8 concludes with reflections on its implications.

The emergence of a new practice often carries a latent message suggesting, to some extent, the inadequacy of existing structures to meet current demands. <IR> was developed in the early 2010s by the IIRC in response to growing concerns about the disconnect between financial and non-financial corporate disclosures. Initially piloted in South Africa as part of mandatory reporting reforms, <IR> aimed to promote a more holistic view of value creation by integrating financial information with environmental, social, and governance (ESG) considerations (IIRC, 2013). Central to the <IRF> is the concept of integrated thinking, which encourages organisations to consider the interdependencies among various forms of capital – financial, manufactured, intellectual, human, social and natural (IIRC, 2013). While adoption remains largely voluntary, <IR> has achieved growing global recognition, particularly in South Africa and Japan.

Despite its growing visibility in practice, whether <IR> delivers substantive organisational change remains contested. Although the framework aspires to embed sustainability and long-term value into corporate decision-making, empirical studies suggest that its effects are largely incremental and context-specific (Stubbs and Higgins, 2014; Higgins et al., 2019). Its principle-based design, while intended to support flexibility, has enabled diverse interpretations and partial uptake (Feng et al., 2017). Moreover, integrated thinking may precede <IR> adoption (Al-Htaybat and von Alberti-Alhtaybat, 2018; Lodhia, 2015), which suggests that adopting the framework does not always trigger new ways of thinking or decision-making. Rather than driving structural change, <IR> often reinforces existing practices or leads to modest procedural adjustments (McNally et al., 2017). In this light, Higgins et al. (2019) characterise <IR> as a “toolbox” from which organisations selectively draw, rather than a coherent model of change.

Beyond its implementation challenges, <IR> has also been problematised as a discursive and ideological construct. Dumay et al. (2017) highlight how the IIRC's diffusion strategy relied less on demonstrated effectiveness and more on rhetorical appeals. Such framing helped promote <IR> as a moral imperative rather than a proven organisational approach. In a related critique, Flower (2015) contends that <IR>’s reformist ambitions were undermined by a strategic shift from stakeholder accountability to investor priorities, framing the initiative as a political compromise. Tweedie and Martinov-Bennie (2015) similarly argue that <IR> structurally prioritises financial capital and organisational continuity over broader notions of accountability. Humphrey et al. (2017) further contextualise this institutional positioning by describing <IR> as a boundary object – flexible enough to facilitate coordination among competing reporting logics, yet too malleable to impose structural change. Together, these critiques suggest that <IR>’s institutional appeal lies not in its transformative capacity but in its adaptability and ability to accommodate existing institutional arrangements.

This malleability, while enabling broad alignment among actors, also made <IR> vulnerable to subsumption within more dominant standard-setting agendas – raising questions about the fate of its core principles (O'Dwyer et al., 2024). The IIRC was merged with SASB and absorbed into the IFRS Foundation, which later launched the ISSB to oversee global sustainability disclosures. While the <IRF> remains a reference point, it is no longer central to emerging sustainability standards. Some scholars interpret this transition as the dissolution of <IR>’s reformist ambitions (O'Dwyer et al., 2024; Rowbottom, 2022). Parfitt (2024) contends that IIRC and SASB together helped establish a regime of “ethical capital”, in which social and environmental concerns are converted into intangible assets for investor valuation. From this perspective, <IR> was not so much abandoned as strategically absorbed into dominant financial logics that neutralise its more progressive aims.

The continued relevance of <IR>, therefore, lies less in its formal status as a reporting framework than in what it reveals about how sustainability-related concerns are taken up and worked through in organisational practice. As sustainability reporting regimes evolve and regulatory ambitions increasingly confront organisational realities, <IR> offers a valuable empirical site for examining how sustainability-related practices are enacted in day-to-day reporting work.

Against this backdrop, earlier empirical research remains instructive for understanding how organisations engaged with <IR>. While much of the literature has focused on adoption decisions and disclosure outcomes (Rinaldi et al., 2018; Songini et al., 2023), a growing body of studies examines how <IR> is enacted within organisations, shedding light on the activities, interactions and organisational arrangements involved in implementation. Much of this empirical work (e.g. Stubbs and Higgins, 2014; Higgins et al., 2019), however, remains implicitly outcome-oriented, identifying recurrent configurations of organisational activities as mechanisms associated with change processes. While this approach highlights patterned forms of IR-related activity, it tends to neglect the situated and contingent ways in which such activities unfold. Positioning these mechanisms as empirical entry points opens up space for examining how reporting practices develop in practice, shifting attention from assessments of reporting outcomes to the day-to-day processes through which implementation is shaped.

Among research examining the motives and rationales underlying <IR> adoption, prior studies highlight that understanding why organisations embark on <IR> initiatives is central to explaining how reporting practices subsequently evolve. Early research tended to emphasise economic or isomorphic determinants (e.g. Fuhrmann, 2020), whereas more recent qualitative work reveals how internal actors frame <IR> as either a strategic opportunity or a symbolic gesture (Robertson and Samy, 2020). Stubbs and Higgins (2014) conceptualise this adoption dynamic as a push/pull approach, in which external pressures and/or internal aspirations shape the decision. Motivations, however, are rarely singular or stable. Studies show that different rationales – normative, strategic, reputational – can co-exist or evolve over time (Gunarathne and Senaratne, 2017; Robertson and Samy, 2020). These studies indicate that rationales are not merely precursors to <IR> adoption but continue to influence how <IR> is framed, coordinated and enacted.

A second stream of research examines how <IR> work is organised and who assumes responsibility for it, often discussed in terms of “ownership” (Stubbs and Higgins, 2014). Responsibility is rarely predetermined; instead, it is negotiated among departments and individuals as <IR> becomes embedded within existing organisational structures (Iacuzzi et al., 2020). This ambiguity complicates task allocation and, as Adams (2002) notes, the department that assumes responsibility can significantly influence the orientation and content of disclosures. Such dispersed responsibility can generate both productive collaboration and tension, particularly when roles are unclear or largely symbolic (Sabelfeld et al., 2023). Moreover, ownership is rarely stable. Higgins et al. (2019), for instance, document a case where responsibility shifted from the corporate social responsibility (CSR) department to a finance-linked team, catalysed by an internal champion. These variations suggest that the question of “who does <IR>” is not simply a matter of formal assignment but an ongoing process through which roles, authority and coordination are continually shaped.

A related stream of research examines how <IR> is coordinated across organisational boundaries. Prior studies frequently highlight the use of cross-functional teams to facilitate implementation (Stubbs and Higgins, 2014; Higgins et al., 2019). Such teams are typically intended to bring together representatives from different departments or units, with the aim of improving coordination around reporting activities. Ideally, these interactions are expected to break down silos and foster a more holistic understanding of organisational value (Busco et al., 2017). In practice, however, cross-functional collaboration often exposes tensions, for instance, when financial and sustainability objectives diverge, or when technical complexity impedes mutual understanding (McNally et al., 2017; McNally and Maroun, 2018). Recent research further suggests that these tensions may intensify and ultimately undermine implementation efforts (Amaral et al., 2025).

These tensions also shape how integrated thinking, often regarded as <IR>’s intellectual core, is interpreted and enacted. While the IIRC (2013) positions integrated thinking as a mindset shift toward long-term, multi-capital value creation, studies suggest it requires contextual adaptation (Dumay and Dai, 2017; Feng et al., 2017), with its effectiveness depending on specific organisational settings and institutional environments (Al-Htaybat and von Alberti-Alhtaybat, 2018; Le Roux and Pretorius, 2019; Lodhia, 2015). Even when departments interact more frequently, true cognitive integration may remain elusive (Mio et al., 2016). Ultimately, the impact of such structures depends on both formal arrangements as well as the subjective agency of individual actors – what Adams and McNicholas (2007) describe as the ability to “unfreeze” taken-for-granted views and foster change through group dynamics.

A further stream of research examines materiality analysis (MA), which has become widely institutionalised as a core component of the <IR> process (IIRC, 2013; Stubbs and Higgins, 2014). Intended to help organisations identify and prioritise information relevant to long-term value creation, MA ideally requires cross-functional dialogue and judgement. In practice, however, studies reveal that MA is often treated as a compliance exercise rather than an integrated learning process, remaining disconnected from broader organisational systems (McNally et al., 2017; Mio et al., 2016). Practitioners frequently report limited internal capacity to support such evaluation, relying instead on external frameworks such as the Global Reporting Initiative (GRI) guidelines (Mio et al., 2016).

Prior studies identify a range of organisational and external actors involved in shaping <IR> implementation. Internally, reporting-related responsibilities, interactions and decision-making processes are enacted through day-to-day activities involving multiple departments and individuals (Higgins et al., 2019; McNally and Maroun, 2018). Externally, consultants, professional associations, and standard-setting bodies influence how organisations interpret and operationalise <IR> (Dumay et al., 2017; Sabelfeld et al., 2023). Their involvement interacts with internal processes, jointly affecting how reporting work is coordinated and sustained. While such engagement can enhance legitimacy and provide methodological support, it may also reinforce standardised approaches and managerial priorities (Gunarathne and Senaratne, 2017). Overall, this body of research points to the complex interplay between internal and external actors in shaping <IR> implementation.

In summary, prior research has illuminated the various organisational elements, actors and interactions associated with <IR> implementation. However, the dynamic processes through which these elements interact and develop remain underexplored. Against this backdrop, the next section introduces the broader institutional setting in which our case is embedded, with particular reference to the Japanese <IR> landscape.

<IR> practices do not unfold in a vacuum but are shaped by the institutional conditions in which they take place. Prior research has largely focused on contexts with stronger regulatory backing – such as South Africa and parts of Europe – where <IR> adoption is mandatory or closely monitored (Songini et al., 2023). By contrast, Japan presents a distinctive case: while the uptake of <IR> among large listed firms is remarkably high, disclosure remains voluntary. This voluntary high uptake provides organisations with considerable discretion in how <IR> is taken up and enacted in practice. Understanding this regulatory backdrop is therefore important not as a macro explanation, but as a way of situating how <IR> is interpreted and worked out in everyday organisational activity. The following section outlines key features of Japan's disclosure system that frame the organisational context in which our case is embedded.

Voluntary sustainability disclosure has a relatively long history in Japan, supported by government initiatives since the early 2000s through a series of environmental reporting guidelines issued by the Ministry of the Environment. These non-binding frameworks, along with the uptake of GRI standards, contributed to a steady rise in stand-alone environmental and CSR reports, especially among large manufacturers. In parallel, because of the limited disclosure requirements under Japan's Companies Act, many firms relied on annual reports (AR) – produced outside formal legal frameworks – as their primary medium for corporate narrative. Meanwhile, the Financial Services Agency imposed rigid disclosure requirements for securities filings, which specified content in fixed formats and offered little flexibility to include sustainability information. This dual structure created both fragmentation and flexibility: while statutory disclosure remained minimal, AR and CSR reports became key sites of voluntary experimentation and narrative communication. <IR> was thus introduced into an environment already shaped by non-mandatory disclosure practices, offering a potential way to consolidate and reframe existing reporting practices within a more strategic format.

Alongside this disclosure tradition, the 2010s also marked a shift in Japan's institutional discourse on corporate value and competitiveness. A series of initiatives, such as the Ito Review (2014), the Stewardship Code (2014) and the Corporate Governance Code (2015, revised in 2018) [²], were introduced in response to concerns that Japanese companies were undervalued in global capital markets owing to weak governance and limited strategic communication. These measures formed part of a broader discursive environment that emphasised capital efficiency, corporate purpose and long-term value creation. While not designed to promote <IR> directly, these initiatives shaped the way firms and investors thought about corporate reporting – positioning strategic narrative as a desirable component of governance reform. Among these, the Guidance for Collaborative Value Creation (2017), issued by the Ministry of Economy, Trade and Industry, explicitly focused on value-oriented disclosure, encouraging companies to articulate how non-financial resources contribute to strategy and value creation. Within this evolving discursive setting, <IR> came to be seen as a legitimate and appealing means of responding to institutional expectations – a perception echoing investor responses. Voluntary <IR> disclosures in Japan have been positively received as indicators of governance quality and long-term orientation (Nakajima and Inaba, 2022).

These institutional features – voluntary disclosure norms, flexible narrative formats and policy discourses emphasising corporate value – help explain why <IR> has gained strong traction in Japan. Reflecting this institutional alignment, <IR> has seen remarkable growth over the past decade. According to KPMG Japan (2025), the number of <IR> issuers increased from just 22 firms in 2010 to 1,177 by 2024, now accounting for 60% of all companies listed on the Tokyo Stock Exchange Prime Market and 90% of total market capitalisation. This pattern stands in sharp contrast to global trends. Despite its concern of lost visibility following the IIRC's absorption into broader sustainability standard-setting initiatives, in Japan, it continues to thrive as a visible expression of alignment with national reform agendas and corporate legitimacy (Nishitani et al., 2021), rather than as a mere reporting format.

Despite the high rate of voluntary uptake, survey data suggest that many Japanese companies encounter practical challenges in implementing <IR>. According to KPMG Japan (2023), a majority of firms report difficulties in applying the concept of integrated thinking, struggling to connect non-financial considerations with daily decision-making processes. External evaluations echo these concerns. While <IR> adoption in Japan has expanded rapidly, the quality and substance of implementation remain less than satisfactory (Eccles et al., 2019; Vitolla et al., 2019); some firms have merely combined annual and CSR reports for cost-saving purposes, with limited engagement in integrated thinking (Edge International, 2018). In addition, <IR> responsibilities are often assigned to CSR or investor relations departments rather than to planning or finance units with greater strategic influence (KPMG Japan, 2023).

These patterns align with Hosoda's (2022) findings, which describe IR-related changes as largely “first-order”, that is, limited to procedural adjustments rather than deeper organisational transformations. While stakeholder orientation and long-termism are frequently cited as cultural strengths of Japanese firms (Aoki, 1994), these values alone do not ensure meaningful cross-functional integration or sustained organisational change. This may reflect deeper organisational conditions and understanding how <IR> is enacted under these conditions requires an analytical lens attuned to everyday organisational activity, a perspective developed in the following section.

To examine how <IR> is enacted in organisational settings, this study adopts a practice-based perspective informed by Schatzki's (2002) theory of social practices. Schatzki's work is grounded in what he terms a “site ontology”, which posits that all social phenomena are rooted in practices and material arrangements (Schatzki, 2002). He defines a practice as a “temporally evolving, open-ended set of doings and sayings linked by practical understanding, rules, teleoaffective structure, and general understanding” (Schatzki, 2002, p. 87).

From this perspective, practice cannot be reduced to regularities or routines; rather, it unfolds through ongoing activity shaped by practical intelligibility – what makes particular actions sensible to actors in specific situations (Schatzki, 2002). As practical intelligibility is inherently situated and contingent, one can never be certain a priori how a practice such as <IR> will unfold. In Schatzki's account, practical intelligibility emerges from the interplay of organising elements, including rules, practical understanding, teleoaffective structure and general understanding. These elements do not operate as variables or causal mechanisms, but as interrelated dimensions that shape what actions become intelligible and legitimate within a given practice.

Rules are defined as “explicit formulations, principles, precepts, and instructions that enjoin, direct, or demonstrate people to perform specific actions” (Schatzki, 2002, p. 60). They connect individuals to practices by guiding and regulating their actions. While rules aim to control activities or achieve specific effects, they do not rigidly determine actions; instead, “what people do determines what following rules amounts to” (Schatzki, 2010, p. 181). For example, in Lodhia's (2015) study of <IR> transition in an Australian customer-owned bank, rules were instrumental in structuring practices, including both general business regulations and specific guidelines for financial and non-financial reporting.

Practical understanding requires the capacity to carry out a practice, that is, “knowing how to X, knowing how to identify X-ings, and knowing how to prompt as well as respond to X-ings” (Schatzki, 2002, p. 60). This understanding helps practitioners to “connect principles and rules more effectively” (Ahrens et al., 2011, p. 320) and includes both procedural knowledge and the ability to navigate complex scenarios beyond formal rules. Informed by rules (Stacchezzini et al., 2020) yet rooted in empirical context (Caldwell, 2012), practical understanding shapes how <IR> practices are adapted through the integration of formal guidelines and experiential knowledge.

Teleoaffective structure is defined as “a range of normativized and hierarchically ordered ends, projects, and tasks, to varying degrees allied with normativized emotions and even moods” (Schatzki, 2002, p. 61). This concept combines teleological aspects – the goals and direction of a practice – with affective dimensions, including the emotions and moods associated with these goals. Teleoaffectivity involves several elements: “intentions, actions, emotions, and moods as well as ends, purposes, projects, and tasks” (Caldwell, 2012, p. 289). For instance, Sawabe (2017) demonstrates how decision-making in financial institutions, particularly in loan processes, is shaped by practitioners' emotional responses to specific objectives.

The concept of general understanding is described as Schatzki's “most opaque and underdeveloped idea” (Caldwell, 2012, p. 289) and refers to a broad grasp of how to perform tasks within a practice (Schatzki, 2002). It extends beyond the specific to encompass shared knowledge across multiple practices within a field, such as concerns about profitability in management control (Ahrens and Chapman, 2007) or managerial accountability (Jørgensen and Messner, 2010). Despite its utility, general understanding has been criticised for its vague definition and the need for its further theoretical development (Caldwell, 2012; Loscher et al., 2019; Nama and Lowe, 2014). It appears to be related to the teleoaffective structure that emerges through shared goals or values within social communities. Schatzki occasionally omitted the term from his later work, a trend also observed in empirical studies using his theory (e.g. Ahrens and Ferry, 2018; Lodhia, 2015).

Taken together, these organising elements provide a framework for examining how <IR> is enacted as a situated organisational practice. Table 1 summarises these key theoretical elements drawn from Schatzki's (2002) theory of social practices. Rather than serving as a classificatory framework or a template for coding, the table functions as a sensitising reference that informs our interpretation of <IR> in the subsequent analysis.

Although Schatzki's work has advanced our knowledge of practice in management studies, its evolving nature presents challenges for its consistent application. Different phases of Schatzki's ideas show variations as some concepts change, while others remain or emerge (Loscher et al., 2019). This complicates applying his concepts in specific contexts (Nama and Lowe, 2014). Nonetheless, several studies have drawn on Schatzki's (2002) theory of social practices to examine <IR> in different contexts. Lodhia (2015) explores the transition to <IR> in a customer-owned bank, highlighting the importance of ethical values rooted in its organisational structures. Abhayawansa et al. (2019) examine the irrelevance of <IR> to financial analysts, demonstrating how existing teleoaffective structures and practical understanding prevented <IR> from reshaping assessment practices; and Roszak and Laguecir (2024) focus on managerial sense-making during the early implementation of <IR> in private firms, showing how teleoaffective dynamics shaped local adaptation.

These studies demonstrate the relevance of Schatzki's concepts – particularly rules, practical understanding, general understanding and teleoaffective structure – for theorising <IR>. Understanding <IR> as an organisational practice requires attention to its practical accomplishment: what people actually do and how they make sense of their actions in context. The next section outlines the research design, including research setting and our approach to data collection and analysis.

This study focuses on Japan and reports on Energy-Tech (a pseudonym), a traditional Japanese manufacturing company, as a case study. Energy-Tech operates in the technology hardware, storage, and peripherals industry. It has a dynamic history marked by significant transitions. Originally a division of Electric-N, it became independent in the early 1960s, later joining Electric-H and going public in the late 1970s. Despite a golden era in the 1980s and 1990s, the company faced obsolescence owing to technological evolution and undertook product diversification. Following the Lehman Brothers bankruptcy, Energy-Tech delisted but relisted in 2014 and transitioned to a holding company structure in 2017. The COVID-19 pandemic in 2020 disrupted operations, resulting in its first loss, since breaking away from Electric-H. Following a successful restructuring, the company returned to profitability in FY2020 and dissolved the holding company structure in 2021 to emphasise group synergy.

Energy-Tech has made substantial efforts to adapt to changing circumstances, and has been actively engaged in addressing ESG issues, such as controversial sourcing and electronic waste. Its commitment to non-financial reporting began with an environmental report in 1999, evolving later into a CSR report in 2006. Alongside mandatory financial statements, it also initiated issuing annual reports in 2000 to provide investors with comprehensive corporate narratives. With the adoption of <IR> in 2015, Energy-Tech maintained and adapted its existing reporting structures. The primary actors included: internal actors (Energy-Tech's reporting departments, see Figure 1) and external actors (consultants).

1. CSR department: Responsible for environmental and social aspects and their reporting, collaborating primarily with departments at the Kyoto head office. In 2020, it was reorganised to report directly to the chief executive officer (CEO) for a stronger focus on sustainability.

2. Brand strategy department: Initially tasked with producing annual reports and corporate strategy communication, the brand strategy department (BSD) oversees financial and governance information under <IR>. It also coordinates the overall <IR> process, manages interactions with consulting firms and ensures strategic communication.

3. Support departments: These departments provide essential data to the CSR and BSD based on their areas of expertise, which vary annually according to reporting needs.

Although the CSR and BSD are both lead departments (jimukyoku in Japanese) for <IR>, the BSD coordinates the process as the main liaison with external consultants to ensure departmental alignment.

External consultants have always been involved in Energy-Tech's <IR> process, providing editorial and managerial support. Consultancy A primarily offered editorial services ^[3], Consultancy B handled the materiality analysis (MA), and Consultancy D focused on enhancing ESG ratings. Consultancy C was involved in both editorial and management consultancy, particularly after material issues were identified. As Energy-Tech's approach to <IR> evolved, the company transitioned from Consultancy A to Consultancy C for the 2022 report. Coordination with consultants was managed by the BSD for editorial tasks (Consultancy A and C) and the CSR for sustainability initiatives (Consultancy B, C and D).

A longitudinal case study approach was adopted to gain an in-depth understanding of how <IR> unfolds, allowing for a direct exploration of activities in their “actual context” (Bromley, 1986, p. 23) and the “inner life” of practitioners as they develop their practices (Travers, 2001, p. 8). Empirical data (Tables 1–4) were gathered through participant observation, interviews and from archived documents.

Fieldwork comprised two rounds of data collection conducted by the first author via an internship with Energy-Tech's CSR department. The internship, based on a formal agreement between the organisation and the researcher's university, allowed for embedded access to reporting processes, internal coordination and interactions with external consultants. Ethical approval was granted by the ethics committee of the researcher's home institution.

Although the organisation formally adopted <IR> in 2015, the implementation process has remained dynamic, with ongoing negotiations, adaptations and coordination activities. Our fieldwork, conducted from 2019 onward, captures how <IR> practices continued to be interpreted, sustained and reshaped through everyday organisational processes. Rather than focusing on a specific stage of adoption, the analysis traces how <IR> was enacted and made meaningful in practice.

The first round of data collection took place from December 2019 to March 2020 and focused on preparations for the 2020 report. Observations centred on the role of the CSR department (Table 3). During and after this period, interviews were conducted with relevant personnel to explore their reflections on <IR> implementation and internal coordination practices (Table 2).

The second round began in 2021 and involved deeper engagement in ongoing reporting activities. The researcher participated in regular <IR> meetings, MA discussions, and initiatives related to ESG evaluations. Particular attention was paid to how internal actors coordinated with external consultants. Observations of meetings and informal conversations were documented in a detailed research diary and field notes. Archival materials such as internal reports, meeting minutes, presentation slides and editorial drafts were also collected (Table 4). All data were analysed in the original language (Japanese). The fieldwork covered the preparation of three successive reports, IR2020, IR2021, and IR2022, [⁴] comparable to that of Gibassier et al. (2018), who utilise similar ethnographic methods to study <IR> adoption. Figure 2 illustrates the key events chronologically.

To ensure a comprehensive understanding of how <IR> practices were developed, coordinated, and communicated, interviewees were purposively selected based on their direct involvement in these processes. Participants were identified through the researcher's embedded engagement in the CSR department, with additional interviewees selected via internal referrals to include a range of roles across departments responsible for sustainability reporting, corporate communication and cross-functional collaboration. Semi-structured interviews were then conducted with employees involved in different aspects of <IR> implementation, including content development, cross-departmental coordination and external communication. The interview protocol was designed to explore participants' experiences and interpretations of <IR> practices, focusing on three main areas.

1. their background and involvement in IR-related activities;

2. their views on the motivations behind <IR> adoption and what <IR> means to them; and

3. reflections on any changes, ongoing challenges, or issues encountered during the <IR> process, with particular attention to how participants retrospectively described the evolution of their involvement. This approach allowed for flexibility while ensuring that core themes were consistently addressed across interviews.

In addition to interview data, participant observation during regular <IR> meetings, MA sessions and internal debriefs enabled the researcher to observe first-hand how internal actors interacted with external consultants. These observations also provided insight into how external input was interpreted, negotiated and incorporated into the reporting process, offering a dynamic view of how <IR> was enacted in practice through ongoing coordination across organisational boundaries.

In total, 11 semi-structured interviews were conducted across two rounds of fieldwork, alongside participant observation in over 100 <IR> meetings, MA sessions and ESG-related discussions. Archival materials spanning from 2015 to 2022 included internal reports, editorial drafts, presentation slides and meeting records. This multi-source design enabled triangulation across interviews, observations and documents to capture the situated enactment of <IR> and supported the credibility, authenticity and contextual transparency throughout the research process (Parker and Northcott, 2016; Steccolini, 2023).

Data analysis focused on tracing how <IR> was enacted in practice, with particular attention to the situated actions, interactions and organisational processes that shaped reporting activities. Analysis proceeded iteratively, moving back and forth between empirical materials and theoretical ideas in a manner consistent with practice-based accounting research (Ahrens and Chapman, 2007; Jørgensen and Messner, 2010). This theory-informed, iterative engagement also aligns with recent studies that apply Schatzki's (2002) theory of social practices to empirical settings (van Erkelens et al., 2024) and is structured in two phases.

In the first phase, open coding was applied to a variety of empirical materials, including interview transcripts, field notes, internal documents and corporate reports. These data varied in format and level of formality, from informal meeting observations to standardised public disclosures. They were all analysed in the original Japanese to preserve contextual nuance. This phase was primarily descriptive, focusing on what actors did and said in the course of their reporting work and identifying recurrent activities, situated interactions and coordination patterns without imposing pre-defined categories. Coding and memo-writing were conducted manually using colour-coded annotations and iterative reflection to support close engagement with the data.

In the second phase, the initial codes were refined through engagement with sensitising concepts derived from Schatzki's (2002) theory of social practices. Particular attention was paid to practice-organising elements, such as activities, ends, rules, emotions and understandings, which served as interpretive lenses for examining how <IR> practices were enacted, coordinated and adapted over time. This phase enabled a move from descriptive coding to a more interpretive analysis, situating observed reporting activities within broader patterns of organisational meaning and coordination. A working codebook was maintained throughout the analysis to support consistency and facilitate iterative refinement (Saldaña, 2016).

This analytical process enabled the construction of three thematic clusters that structure the findings section.

1. the multiplicity of motivations behind the transition to <IR>;

2. the adaptation and enactment of reporting practices, including the coordination of internal actors across reporting cycles; and

3. the emergence of MA as a distinct practice during the observation period. Rather than being a pre-defined component of the reporting process, MA crystallised as a site of negotiation and sense-making among actors in response to evolving reporting demands.

Together, these themes illustrate the situated nature of <IR> and reveal how actors negotiated meanings, roles, and priorities through their participation in everyday activities.

As with many qualitative case studies, our aim is not statistical generalisation but the development of analytical insights that may be informative for similar organisational contexts (Lukka and Kasanen, 1995; Parker and Northcott, 2016). The bounded scope of a single case necessarily limits breadth, yet it enables close examination of the situated micro-processes through which <IR> was enacted. Finally, we acknowledge that our interpretations were shaped by the particular access and engagement we experienced in the field, as is common in qualitative accounting research (Irvine and Gaffikin, 2006).

Consistent with Japan's broader reporting movement, Energy-Tech has a long history of non-financial information disclosure. This historical commitment reflects the company's proactive approach to corporate reporting and serves as a foundation for its transition to <IR> (Lodhia, 2015). An editorial note in the first report (IR2015) stated the following.

According to the CSR department, the decision to adopt <IR> was driven by the former chair in response to its growing popularity in Japan, where soft-law policy signals and reputational incentives, rather than regulatory mandates, play a critical role in shaping corporate disclosure practices (Nakajima and Inaba, 2022). This environment of voluntary adoption may explain the pragmatic framing of <IR> within the company. A few interviewees (E1/E3, CSR) indicated that the adoption of <IR> also appeared “impure” as it was aimed at reducing design and production costs. This ambivalence over motivations also reflects underlying power dynamics, whereby CSR-related initiatives remain peripheral to core financial planning processes, echoing the structural marginalisation of CSR units observed in many Japanese firms (Hosoda, 2022; Sabelfeld et al., 2024). However, this view was not shared among everyone, as noted by the reporting co-ordinator (E4, BSD).

Despite the initial motivation, interviewees (E1, E4) emphasised that Energy-Tech, which used to rely heavily on the management resources of its parent company, needed to chart its own course, and that <IR> would be an appropriate platform for asserting an independent identity. The presence of multiple, sometimes conflicting, motivations for <IR> adoption – ranging from cost-saving to trend-following – illustrates the negotiated and evolving nature of such decisions (Robertson and Samy, 2020).

Nevertheless, the claim that <IR> adoption aligns with the development of integrated thinking was not substantiated by our findings. The inaugural report (IR2015) solely consolidated the existing annual and CSR reports into a single document, and thus saved costs, rather than introducing a new approach to reporting.

Although Energy-Tech adapted its internal reporting structure to accommodate <IR>, these adjustments were primarily aimed at reducing duplication and minimising unnecessary effort, rather than reflecting any deliberate strategic reorientation. While the CSR and BSD shared leadership roles on paper (Figure 1), our findings suggest that interpretive control over <IR> remained largely within the BSD, demonstrating limited interdepartmental collaboration and contested ownership. The changes did not result in a new organisational structure (Guthrie et al., 2017; McNally and Maroun, 2018; Stubbs and Higgins, 2014) or automatic integration with enhanced communication. Existing practices remained largely intact, indicating that <IR> adoption was more of a continuation of previous practices than a significant shift in operating ones.

This continuity may partly be attributed to entrenched organisational routines and relational inertia. At the same time, we observed multiple motivations that were articulated differently over time as implementation progressed. The following subsection illustrates how these dynamics materialised through the company's routine report preparation activities.

The enactment of <IR> at Energy-Tech unfolded through a set of interrelated activities that gradually stabilised into the organisation's reporting routine. Our observations reveal multiple, overlapping activities that together constituted a recurrent reporting cycle (Figure 3), involving both internal and external participants whose interactions shaped what <IR> came to mean in practice.

The process commenced with gathering feedback on previous reports focused on the teleologies (Schatzki, 2002) – the goals and intended outcomes – to assess current practices and pinpoint areas for improvement. Feedback sources varied but encompassed both internal (e.g. employee questionnaires) and external inputs (e.g. investors, reviewers from reporting awards). This feedback was shared through meetings and addressed various aspects, such as content (e.g. storytelling and strategy presentation) and design/readability considerations (e.g. text-to-image ratio and PDF interactivity).

The company did not have a standardised evaluation method or adhered to specific rules (Schatzki, 2002). Moreover, our observations did not indicate that practitioners intended to strictly follow rules. Minimal discussion, particularly about the <IRF>, occurred in practice. This flexible approach to feedback gathering aligns with prior research highlighting that report preparation is rarely a matter of strict compliance (Gibassier et al., 2018) but instead involves interpretive work and negotiation among actors.

Following the feedback gathering and reflection process, an annual launch meeting established the direction, central theme and timeline for preparation of the new report. Content discussions were primarily based on proposals developed for each reporting cycle, which, despite changes in the consultant over time, typically addressed mandatory information, current trends and criticisms of previous reports. Some feedback comments were revisited, but not all were addressed.

For instance, the launch meeting for IR2020 centred on restoring investor confidence in Energy-Tech following a financial crisis. The atmosphere of the meeting was marked by a sense of gravity, reflecting the company's ongoing losses and operational strain. Feedback from investors and experts emphasised the urgency of the situation and enjoined Energy-Tech to articulate objectives and implement effective measures to improve performance. An advisor from Consultancy A remarked:

Such concerns had been voiced earlier by interviewees (e.g. E1, E4, and E12) and focused on the need for the company to address uncertainties about its future amid questionable mergers and acquisitions (M&A) and develop its own brand post-independence. The pandemic had further exposed and amplified management risks. With the <IR> scheduled for release in October 2020, lead departments viewed it as a crucial platform to communicate the company's situation and emphasise its commitment to “significant reforms for the prompt return to a growth trajectory” (E4). This focus continued to influence IR2021, which aimed to present “a scenario for return to growth, based on the new medium-term management plan, and content highlighting social issues, together with a clear picture of a sustainable, value-driven company” (Meeting materials, March 2022).

The craft of reporting is an ongoing and iterative process, subject to change as the final report takes shape. Routine meetings with lead departments and consulting firms were held to monitor progress and make necessary adjustments. For example, IR2020 was influenced by strategic activities that included the incorporation of fundamental management principles established during its preparation. These principles, which Energy-Tech regarded as cherished strengths, were intended to set a new management direction and foster shared aspirations among employees. The report elaborated on the fundamentals of value creation, focusing on core technologies and detailing their characteristics with concrete examples. Although the refinement of these management principles was not the initial focus of the launch meeting, it became a central theme in IR2020. This shift was justified as a “crucial component of the new management direction to ensure a shared sense of purpose among employees” (E12).

This process illustrates how the focus of <IR> reporting can evolve beyond its original objectives, moving from a general consolidation of CSR content toward addressing immediate strategic concerns, such as crisis communication and investor reassurance. Such developments exemplify how motivations for <IR> adoption may be reframed and reinterpreted throughout the implementation process (Robertson and Samy, 2020).

Support departments were heavily involved in this phase, although their participation in earlier meetings was inconsistent. When they did attend, their comments on the report's direction were infrequent; however, generally, they cooperated with requests from lead departments or consulting firms. Contrary to concerns raised by McNally and Maroun (2018) regarding resistance due to a lack of understanding, Energy-Tech staff did not reject the decision to produce an integrated report. While they might not have fully grasped the rationale, they recognised the potential benefits for both the organisation and its stakeholders. For them, the primary value of <IR> lay in enhancing stakeholders' understanding of the company's non-financial aspects.

Each department's engagement was shaped by its specific role and the context of its involvement. For example, R&D’s contribution was primarily focused on presenting core technologies and “linking past activities to present” (E1), especially in light of recent M&As. Despite recognising the importance of clear communication, R&D was less proactive in content creation owing to the sensitivity of technical information and a belief that “decisions should not be R&D's alone” (E9). By contrast, the purchasing department was actively engaged, proposing policy revisions aligned with global supply chain and sustainability trends, including the pursuit of sustainable development goals (SDGs). The department “consciously utilised integrated reports” (E5) to enhance internal communication and collaboration. The HR department focused on its specific functions, such as employee training, diversity and recruitment figures, although this represented only “a part of the actual work” (E10). Despite being involved since the CSR reporting phase, the HR interviewee felt that their contribution remained largely unchanged, suggesting minimal impact of <IR> at the ground level.

These varying levels of departmental engagement highlight how <IR> practices are “highly context-specific” (Ahrens and Chapman, 2007, p. 21), and are shaped by the particular needs and functions of each department. The observed variation also reflects broader dynamics identified in previous studies, where cross-functional coordination becomes a negotiation arena in which ownership remains ambiguous and interpretive control contested (Higgins et al., 2019; Mio et al., 2016). These dynamics reflect how interdepartmental coordination becomes an ongoing negotiation, shaped by functional roles and power asymmetries.

The responsibility for drafting and designing the report primarily rested with the consulting firms (Consultancy A and C). The consultants proposed the general outline, design and content from the launch meeting and provided practical and technical information as content preparation partners. Rather than supplying a specific guidance framework, they shared “best practices” from other firms, aligned with Energy-Tech's needs and offered ideas based on recent trends, such as incorporating references to SDGs or conducting interviews with the chief financial officer (CFO). Their role extended beyond merely delivering the report layout.

Practitioners in the lead departments acknowledged the consultants’ significant authority and expertise. Nevertheless, Consultancy A was perceived as providing insufficient input (E12), particularly in terms of offering strategic advice or generating innovative content. This dissatisfaction ultimately led Energy-Tech to switch to Consultancy C in 2022. According to E12, the primary rationale for this change was the desire for a more engaged, advisory role from the consultant – one that would contribute to enhancing the company’s operations rather than merely repeating established reporting templates. The dissatisfaction with existing consultants also reflects, to some extent, the expectation that <IR> should exceed a mere disclosure function.

The central role of consultants in shaping the reporting content and structure reflects the broader dynamics of fashion-setting and templating observed in <IR> practices (Gunarathne and Senaratne, 2017). However, the decision to replace consultants at Energy-Tech also exemplifies practitioner agency in resisting passive adoption and negotiating for more substantive engagement (Robertson and Samy, 2020). Rather than simply accepting the templated solutions provided by external actors, the company actively sought to reposition the consultant's role toward a more participatory and dialogical approach.

Once the structure of the new report was finalised, its content was presented to executive members for evaluation and feedback. This meeting served as a platform to discuss key project issues and determine subsequent directions. Following this review, the report was revised based on top management input and ultimately approved by the board of directors. Notably, the involvement of top management throughout the broader reporting process remained relatively limited. As E12 described, Energy-Tech maintained direct communication channels with the CEO, CFO and other senior leaders, which appeared to mitigate the need for more formalised, extensive engagement from top management. In many instances, such involvement took the form of informal interactions outside the formal disclosure process.

Our findings indicate that formal approval structures alone did not necessarily translate into active engagement by senior executives. Their participation in the reporting process largely followed established organisational protocols, reflecting a governance that was oriented toward procedural consensus and continuity (Yoshikawa and McGuire, 2008). This pattern suggests that executive involvement was shaped less by direct engagement with reporting content than by broader institutional expectations regarding organisational harmony and compliance, particularly when the issues at hand were not perceived as central to financial performance or core business concerns.

Rather than unfolding according to a predetermined plan, the report preparation process reflected ongoing adjustments, actor-specific engagements and evolving interpretations of <IR>’s purpose. While much of the activity followed established organisational routines, our observations also suggest that certain new practices may emerge as part of these situated enactment dynamics. Among these, MA stands out as an activity that was not originally embedded within the reporting process but gradually took shape through feedback, negotiation, and shifting understandings. The following subsection examines how MA emerged and evolved within this organisational context, highlighting how IR-related practices came to open up moments of reflection and engagement, while remaining embedded within existing routines.

In the <IR> literature (see Stubbs and Higgins, 2014), MA has frequently been highlighted as a key practice for identifying and prioritising issues relevant to long-term value creation. However, at Energy-Tech, MA did not appear as a pre-defined or systematically embedded procedure; it evolved gradually as an emergent, opportunity-driven activity shaped by external feedback, consultant guidance and ongoing internal negotiation among departments and leadership levels. From our observation, MA came to occupy multiple roles within the reporting process, functioning both as a disclosure-oriented task and as a potential coordination tool for internal dialogue.

MA was not previously included in CSR reports and gained prominence only during the <IR> process. The first reference to MA in relation to <IR> emerged during the IR2019 feedback meeting, where investor comments and reviewer notes highlighted its absence. The first substantial internal discussion about MA took place during the IR2020 feedback meeting and emphasised the need to address its deficiencies. E4 (manager, BSD) noted that, although efforts had been made to conduct MA, these attempts were unsuccessful owing to significant challenges with limited manpower and time constraints. The specific details were not shared in the meeting, leaving the CSR department without a clear understanding of the exact issues. The BSD director proposed that the responsibility for MA be shifted to the CSR department; however, the latter wanted it to be under BSD, given its strategic management implications. This contestation over ownership reflects the ambiguous and negotiated nature of responsibility in <IR> practices, where control over key activities such as MA is often subject to internal power dynamics rather than formal structures (Higgins et al., 2019).

Despite disagreements between the lead departments, both sides recognised the critical importance of MA for internal management purposes. E12 (director, CSR) stressed the need for executive understanding of ESG investments, underscoring that management's leadership in the MA process is essential for articulating the company's values and demonstrating its capacity for value creation.

Ultimately, the CSR department took the lead in initiating the MA process, selecting Consultancy B at the beginning of 2021 to support its implementation. While CSR managed communication with Consultancy B, BSD personnel were actively involved in the consultant selection and participated in subsequent meetings. Although Consultancy A had also offered MA-related services, they declined further involvement, citing a focus on report preparation. E12 interpreted this decision as reflecting a lack of proactive engagement, emphasising the company's preference for consultants who could contribute strategic insights rather than merely facilitate routine reporting tasks.

The reliance on external consultants throughout the MA process underscores their dual role as both enablers of practice development and potential sources of constraint (Dumay et al., 2017; Sabelfeld et al., 2023). At the same time, Energy-Tech's deliberate choice to engage consultants positioned as strategic partners reflects a degree of practitioner agency and active negotiation over the direction and interpretive framing of the MA process.

The MA process depicted in Figure 4 followed the framework provided by Consultancy B. It involved input from all the relevant stakeholders, including board member interviews, employee questionnaires, customer surveys and expert consultations. Throughout the process, Energy-Tech relied significantly on Consultancy B to lead the MA process, facilitate discussions, prepare the social issues list, develop training materials, design questionnaires and interview questions, and present the MA results with relevant content recommendations. Consultancy B's involvement, as E12 anticipated, seemed to be “functional and efficient” but weak in terms of “human interface” (i.e. limited interpersonal engagement and emotional resonance), leading to a process and results that closely resembled those of other companies.

Unlike preceding <IR> activities embedded in organisational routines focused on report production, the MA process witnessed increasing participation from top management. This partial but increasing involvement of top management underscores the processual and negotiated nature of MA enactment. Rather than being institutionally embedded from the outset, managerial engagement developed through sustained dialogue, feedback and ongoing efforts to build consensus across different actor groups – a pattern also noted in studies of Japanese corporate coordination (Aoki, 1994; Yoshikawa and McGuire, 2008).

Lead departments acknowledged the importance of top management's participation, although achieving consistent understanding of MA across managerial levels remained a challenge. As E12 highlighted, one difficulty was ensuring that managers shared a coherent view of what MA involved and why it mattered. To address this, E12 facilitated direct conversations with the CEO to secure leadership support and organised training sessions for middle managers. In addition, a questionnaire survey was distributed to employees and interviews were conducted with top management to gather internal perceptions on material issues and align expectations.

Upon reviewing the results, several executives expressed concerns about the generic nature of some issues, feeling that they lacked a specific Energy-Tech focus. Discussions were held regarding the public release of the MA, with executives contemplating necessary changes; these mostly centred on determining material issues, rather than interpreting and addressing the implications for management. For example, the CEO suggested avoiding using complex terms like Katakana ^[5] to facilitate understanding among employees. These discussions, while signalling growing attention from top management, remained largely surface-level and focused on presentation and wording. This suggests that, despite increased engagement, a shared and substantive understanding of what MA entails was still lacking, a challenge similarly noted in earlier studies (e.g. McNally et al., 2017).

The publication of the MA results in IR2021 was a significant milestone, but did not mark the end of the MA process. As E12 emphasised, the true purpose of the MA is to improve management practices, highlight the importance of subsequent actions, and develop key performance indicators. Similar dynamics to the earlier consultant transition were noted following the identification of follow-up actions for the MA (a shift from Consultancy B to Consultancy C). These MA activities, driven by the lead departments, demonstrate the prevailing influence of external consulting firms on the process. Nonetheless, they provided opportunities for internal actors to reflect on and relate sustainability issues to strategic management, or at least to initiate discussions. Although the process did not result in a fully integrated mechanism or strategic repositioning, the episodic nature of MA at Energy-Tech opened up spaces for dialogue and reflection.

Such emergent practices may be understood as situated responses within the constraints of organisational routines and cultural norms, rather than as the outcome of top-down strategic design (McNally and Maroun, 2018; Mio et al., 2016). These observations invite further reflection on how the enactment of IR-related practices interacts with organisational dynamics, enabling certain forms of change while constraining others, an issue explored in the following section.

This study examined how IR-related practices are accomplished within organisations, focusing on how they may enable, constrain or reshape management activities in situated ways. Rather than focus on adoption decisions or intended outcomes, we sought to understand the situated unfolding of these practices as they take shape within organisational life. To address this question, we adopt Schatzki's (2002) theory of social practices, which conceptualises social practices as organised through teleoaffective structures (ends, projects, purposes and emotions), general understandings (shared assumptions about roles, appropriateness and meaning), rules (formalised instructions and guidelines) and practical understandings (knowing how to go on in everyday practice). Such a perspective allows us to move beyond outcome-oriented narratives and attend to the processual dynamics through which practices unfold.

Our analysis shows that the enactment of IR-related practices is not simply a consequence of adoption or mechanism design but a process that unfolds through embedded arrangements such as routines, intentions, and understandings that define what becomes possible, legitimate, or meaningful in practice. These arrangements condition both the scope for change and the ways in which new activities are taken up, sustained, or absorbed into existing practices.

Such arrangements do not operate as isolated or neatly separated factors; they co-constitute the conditions under which agency is exercised and practices unfold (Caldwell, 2012; Schatzki, 2002). In our case, these dynamics take shape through the interplay among strategic priorities, role expectations, formal procedures and routinised ways of working. Strategic priorities reflected the organisation's teleoaffective structures, particularly the emphasis on financial recovery and brand positioning in the aftermath of corporate restructuring. These priorities were not simply formalised objectives; they were intertwined with a broader constellation of shared concerns and assumptions about what is seen as legitimate and worthwhile within the organisation. In this sense, teleoaffective structures and general understandings were not entirely distinct categories but mutually implicated (Nama and Lowe, 2014): role expectations and ownership allocations were shaped, and often justified, through the strategic ends they were meant to serve. Rules formalised these expectations into procedural arrangements, while practical understandings stabilised them through everyday reporting routines.

These internal arrangements were further reinforced by external framings. Investor expectations and consultant advice did not act as independent drivers of change but exerted influence through their alignment with these patterned conditions. Rather than challenging established priorities and assumptions, such external inputs often sustained or amplified the existing dynamics through which organisational actions were made meaningful and legitimate (Sabelfeld et al., 2023).

Overall, these dynamics suggest that constraint unfolds not through simple resistance (e.g. McNally et al., 2017) or structural blockage (e.g. Higgins et al., 2019) but through the patterned processes by which certain forms of action become viable while others are rendered peripheral. Change, where it occurs, does not result from mechanism design itself (Higgins et al., 2019; Stubbs and Higgins, 2014). Instead, it results from the negotiation between new practices and entrenched organisational arrangements. To further explore how this embeddedness shaped the enactment of <IR> (Loscher et al., 2019; Schatzki, 2002), we revisit three key domains identified in our findings: the initial framings of adoption, routinised reporting processes and development of MA. In each, the negotiation between agency and constraint was particularly salient.

Although aligned with the multiplicity of motivations observed in prior research (e.g. Fuhrmann, 2020; Robertson and Samy, 2020), the rationales articulated for <IR> adoption at Energy-Tech, such as cost reduction, reputational enhancement and global alignment, did not operate as fixed, pre-existing drivers of action. Rather than preceding practice, these rationales were themselves products of enactment, shaped through the embedded arrangements that organised what was recognised as meaningful, appropriate and legitimate within the organisational context (Ahrens and Chapman, 2007). External expectations – including investor interests and Japan's soft-law governance environment – further reinforced these internal arrangements, amplifying rather than challenging the dominant strategic framings. What counted as a valid reason for pursuing <IR>and what ends <IR> was expected to serve was not simply decided in advance but continuously negotiated and stabilised through these patterned configurations (Schatzki, 2002). Such framings positioned <IR> not as a transformative intervention but as an extension of existing strategic orientations.

The routinised preparation of <IR> reports at Energy-Tech further illustrates how constraint emerged through established ways of working. Prior studies on <IR> implementation have implied organisational fragmentation, procedural inertia and limited cross-functional engagement as common challenges to integration (e.g. Higgins et al., 2019; Iacuzzi et al., 2020). Our analysis offers a different reading: rather than mere implementation challenges, these dynamics were manifestations of embedded organisational arrangements through which reporting was understood and enacted (Feldman and Orlikowski, 2011). Reporting activities were shaped by rule-bound procedures and practical understandings (Schatzki, 2002) that stabilised familiar rhythms of document preparation – prioritising readability, compliance and investor reassurance over strategic dialogue or contestation. Similarly, external inputs, including investor feedback and consultant framings, were routinely absorbed into these processes as procedural checkpoints, reinforcing rather than challenging the organisation's prevailing reporting logic. Constraint, in this sense, did not arise from resistance alone but from the patterned enactment of reporting as a procedural and formalised practice.

The emergent trajectory of MA at Energy-Tech demonstrates how efforts to introduce new practices encountered constraints through organisational arrangements of ownership, role expectations and procedural norms. While prior research has positioned MA as a site for strategic dialogue and contestation (e.g. McNally and Maroun, 2018; Hosoda, 2022), our analysis reveals a more contingent process. At Energy-Tech, implementation emerged only after repeated negotiation – rather than as a straightforward strategic choice – and did not operate as an inherently transformative mechanism. Even with formal endorsement from top management, enactment remained channelled into CSR-led processes, reflecting persistent assumptions about the proper locus of responsibility for sustainability-related tasks.

This pattern reflected not an absence of intent but the strength of general understandings (Schatzki, 2002) – shared assumptions about roles and ownership that stabilised functional boundaries and channelled new initiatives into existing reporting routines. One clear manifestation of this was the absence of the finance department from <IR> activities altogether. While prior research often describes finance as insufficiently involved (e.g. Stubbs and Higgins, 2014), in this case, its non-participation was not experienced as problematic. Rather, it reflected an implicit assumption that sustainability-related reporting fell outside the remit of finance – an understanding that shaped practice not through resistance but through its taken-for-granted status. In a similar vein, efforts to broaden the scope of MA or reposition it as a management tool encountered constraint not through overt opposition (McNally et al., 2017) but through the reproduction of embedded organisational arrangements. Consultant involvement further reinforced this procedural framing, facilitating the process within existing parameters rather than challenging the underlying organisational logics. Thus, the case of MA exemplifies how constraint unfolded not from the failure of individual will or formal mechanism but through situated negotiation between agency and structured conditions – organised through teleoaffective structures, general understandings, rules and practical understandings (Schatzki, 2002).

Taken together, these accounts of <IR> enactment at Energy-Tech illustrate that constraint, rather than being a matter of resistance or technical failure, emerges through patterned organisational arrangements. Rather than being straightforwardly implemented or entirely blocked, IR-related practices were processually negotiated within structured conditions that shaped what was recognised as feasible, legitimate, and worth pursuing. This analysis moves beyond accounts (e.g. Higgins et al., 2019; Iacuzzi et al., 2020) that treat challenges to <IR> implementation – such as limited cross-functional engagement or procedural inertia – as contingent impediments to effective execution. Instead, we argue that these dynamics are not external barriers but products of enactment itself, embedded in organisational routines, role expectations and shared understandings. This framing invites a reconsideration of constraint not as the absence of agency or structure but as an emergent property of how organisational life is patterned and sustained.

This study has examined how IR-related practices are enacted and negotiated within organisational life. It focused on the embedded organisational arrangements through which agency and constraint are processually co-constituted. Rather than assuming that change follows directly from the adoption of mechanisms or the intent of individual actors, our analysis highlights how these practices are shaped by teleoaffective structures, general understandings, rules and practical understandings (Schatzki, 2002). Constraint, in this view, does not simply reflect a lack of effort or a failure of mechanisms but emerges from the situated interplay between new initiatives and the patterned configurations of action that define what is seen as legitimate, feasible and worth pursuing.

These insights carry important implications for both policymakers and organisations. For standard setters, such as the ISSB, our findings suggest that the effectiveness of sustainability reporting frameworks depends not only on the design of disclosure requirements but on their alignment with how action is made meaningful. Recent policy debates in Europe, including the European Commission's Omnibus package (European Commission, 2025), have underscored the practical tensions that arise when regulatory ambitions to advance sustainability reporting outpace organisational capacities for meaningful implementation. When reporting standards fail to engage with the core strategic concerns or shared assumptions of firms – what Schatzki (2002) refers to as their teleoaffective structures and general understandings – their potential to foster substantive change remains limited. Promoting integration, therefore, requires more than formal mandates: it calls for attention to the situated processes through which reporting activities are interpreted, negotiated and enacted.

For reporting organisations, these findings highlight that the adoption of <IR> should not be approached merely as a compliance exercise but as an opportunity to engage with underlying assumptions about roles, ownership and strategic purpose. Sustainability information, when treated as part of a broader management dialogue rather than a peripheral reporting task, may offer greater scope for learning, coordination, and reflexivity across organisational boundaries. Yet, as this study illustrates, such shifts depend not only on structural support but on what kinds of change are imaginable, legitimate and actionable within the situated settings of organisational life.

This study contributes to practice-based accounting research by showing how the enactment of <IR> unfolds through the patterned arrangements of organisational life. Drawing on Schatzki's (2002) theory of social practices, we offer a process-oriented account of change – one that foregrounds how shared ends, role expectations, rules and practical routines collectively shape what forms of action are seen as legitimate, feasible, or meaningful. In particular, we bring attention to the role of general understandings – a concept often viewed as elusive, but here empirically grounded through ethnographic engagement – as a key part of the structures that sustain or constrain new practices over time.

These insights emerge from a longitudinal case study of a Japanese firm not characterised by exceptional sustainability ambition but rather by routinised reporting practices and incremental adaptation. By focusing on such a context, the study offers a more grounded account of how IR-related practices evolve – not as technical implementations but as situated accomplishments shaped by everyday negotiation. This study reframes constraint not as organisational failure or resistance but as a situated outcome of how meaning, legitimacy and relevance are patterned in practice. This perspective offers both conceptual insight and practical orientation for researchers, standard setters and organisations seeking to understand how sustainability initiatives take shape on the ground. In this way, we contribute to the long history of literature that treats accounting and reporting not as neutral mechanisms but as socially and materially situated practices (Ahrens and Chapman, 2007; Hopper and Powell, 1985; Hopwood, 1987).

This study opens several avenues for further research on the enactment of <IR> and related organisational practices. First, while our analysis focuses on a single organisational context, future research could examine how similar configurations of agency and structural arrangements unfold across different organisational settings, offering comparative insight into how organisational action is shaped, sustained or reworked over time. Second, further work could build on this study by more closely examining how external actors are drawn into the enactment of organisational practices over time. Finally, future studies might investigate how shifts in organisational conditions shape the unfolding of practices, influencing the scope for redefinition and change. This invites further exploration of how efforts toward sustainability unfold within, and are negotiated through, the patterned dynamics of organisational practice.

The authors would like to thank Prof. Lee Parker and the anonymous reviewers for their constructive guidance and insightful comments throughout the review process. We also acknowledge the valuable feedback received at the 33rd CSEAR Conference (St Andrews, 2023) and at a research seminar at Audencia Business School in March 2024. Finally, the authors are deeply grateful to the participating organisation and its members for their time, openness and willingness to share their experiences.