Voluntary sustainability disclosure: evidence from New Zealand firms

There is a growing demand from investors and other stakeholders for better information and transparency from companies. The International Accounting Standards Board (IASB; XRB, 2018) emphasises the importance of transparency, accountability and economic efficiency in the quality of information that should be provided to investors, market participants, regulators and other stakeholders to support informed economic decision-making. However, voluntary corporate reporting continues to face challenges in meeting stakeholders’ needs, particularly in relation to accountability and decision usefulness. Prior research has highlighted persistent limitations in voluntary sustainability disclosures, including issues of selective disclosure, lack of comparability and limited decision-usefulness (Bernardi and Stark, 2018; De Villiers, Hsiao and Maroun, 2017, 2020; Dumay et al., 2016). Despite the proliferation of reporting frameworks and guidelines developed by professional bodies and international organisations, scholars argue that these initiatives have not fully resolved the information gap between corporations and stakeholders, and that the effectiveness of voluntary sustainability reporting remains an ongoing area of debate in the accounting literature (Adams, 2015; Flower, 2015; La Torre et al., 2020).

In the voluntary sustainability reporting space, we have seen voluntary reporting evolve from environmental accounting, triple bottom line, corporate social responsibility, environmental, social and governance (ESG), sustainability and more recently to integrated reporting < IR>. <IR > materialised as a response to the deficiencies in reporting that failed to connect financial and non-financial information in the context of the company’s strategy and business model that provides information useful for decision-making and which subsequently should create value not only for the < IR> voluntary adopters but also for their investors (De Villiers et al., 2014; Dumay et al., 2016; Hsiao et al., 2022).

There are new directions to bring in mandatory requirements for ESG disclosures and the accounting for climate change standard should bring about changes in the corporate reporting landscape ^[1]. ESG reporting is typically conceptualised as a form of voluntary non-financial disclosure through which firms communicate ESG information to stakeholders (Clarkson et al., 2008; Tsang et al., 2023). Weber (2014) explains that ESG reporting is a measure to achieve transparency about the respective performance of a firm and a means of communication to stakeholders and is a useful tool for both the reporting firm and stakeholders and is clearly an indicator of the importance of ESG issues in a firm. The purpose of ESG reporting is to use information to assess how a company’s ESG initiatives relate to company standards and goals.

In New Zealand (NZ), there have been longstanding calls for improved corporate reporting to better reflect organisations’ full performance and future outlook (McGuinness and Bradshaw, 2011). While much of the existing empirical evidence on integrated reporting and ESG disclosure is drawn from large capital markets in Europe, South Africa and Australia, considerably less is known about how these global reporting frameworks are operationalised in smaller developed economies such as New Zealand. Examining the New Zealand setting therefore provides an opportunity to assess whether the motivations and reporting practices observed in larger markets are replicated in a small, open capital market with different institutional characteristics. This study therefore contributes to ongoing international debates on the effectiveness of voluntary reporting frameworks in enhancing decision-usefulness and accountability.

This study investigates the extent to which voluntary sustainability reporting frameworks, specifically integrated reporting < IR> and ESG disclosures, enhance decision-usefulness and accountability in corporate reporting by using evidence from New Zealand listed companies. By examining how these frameworks are operationalised in a voluntary reporting environment, the study provides insights into their effectiveness in addressing stakeholders’ information needs. NZX Top 50 firms were selected for this study because they represent the most economically significant and publicly visible entities in New Zealand, accounting for the majority of market capitalisation and facing the greatest exposure to investor and stakeholder scrutiny. New Zealand provides a theoretically informative setting characterised by a small, open capital market, concentrated ownership structures and a largely voluntary reporting environment.

The motivation of this paper arises from the social challenges posed to companies for being only profit-oriented, thereby challenging accountants to reconsider the traditional business-reporting model. The paper sheds light on whether New Zealand is addressing the criticism relating to the failure to provide for the informational needs of stakeholders (Hsiao et al., 2022; Turzo et al., 2022; McGuinness and Bradshaw, 2011; Wilkins, 2020). The paper is structured as follows. Section 2 presents the literature on integrated reporting, which is followed by Section 3 on voluntary environment, social and governance (ESG) reporting. Section 4 presents the decision-usefulness and accountability theoretical lens, followed by Section 5 on the research method. Section 6 presents the findings, followed by the discussion in Section 7 and, finally, Section 8 concludes the paper.

<IR > is an independent reporting regime that has evolved out of the limitations of existing corporate reporting frameworks. Its practices have been driven by the International < IR> Council (IIRC) (Dragu and Tiron-Tudor, 2013a). However, organisations use it in contextual, instrumental and piecemeal ways (Higgins et al., 2019). < IR > is believed to have its roots in sustainability and includes financial, social and environmental data, strategies and governance integrated, affecting the company’s entire operations (Maniora, 2017; De Villiers et al., 2014; Eccles and Serafeim, 2011). As more companies adopt < IR>, some groups believe that < IR> can bring about social order and improve corporate accountability (Adams and Simnett, 2011; Eccles and Krzuz, 2015; Robertson and Samy, 2015; Guthrie et al., 2017; De Villiers et al., 2017a). For example, Higgins et al. (2014) believe that the value of < IR > is in strategic storytelling and demonstrating the relationship between the capitals or in the conscious awareness of the different strategic approaches available to implementers. Kerr et al. (2015) point out that strategic frameworks can help organisations integrate sustainability into their management control system.

However, < IR> has been extensively criticised for not promoting genuine sustainability (Flower, 2015; Thomson, 2015; De Villiers and Sharma, 2020) and not substantially changing adopters’ reporting behaviours (Stubbs and Higgins, 2014). Flower (2015) makes the accusation that the IIRC protects the accounting industry, rather than focusing on sustainability. It is unclear how stakeholders use or value the information presented in an Integrated Report, though stakeholders are very positive about the disclosure of a range of social and environmental information items (Rensburg and Botha, 2014; De Villiers and Van Staden, 2012). Stakeholder engagement’s effectiveness can be undermined by certain difficulties and challenges faced by an organisation (Kaur and Lodhia, 2019). By limiting the intended audience, integrated reports are less likely to raise social and environmental concerns (De Villiers et al., 2014). Furthermore, the lack of definition and wide variety in interpretation suggests that it is hard to study the effects and concrete benefits of < IR> (Maniora, 2017). Concerningly, companies may adopt < IR> as a tool “to distract attention from their weak social and environmental record and opportunistically manage public impression of corporate behaviour” (Stacchezzini et al., 2016, p. 108). These companies may be more concerned about using < IR> as a marketing tool and reporting on social action as compared to social or environmental performance (Stacchezzini et al., 2016; Katsikas et al., 2017). Nevertheless, recent studies suggest that challenges remain in practice, including inconsistencies in implementation, difficulties in achieving meaningful integration of financial and sustainability information and continued concerns about the comparability and credibility of disclosures (De Villiers and Sharma, 2020; La Torre et al., 2020; Stubbs and Higgins, 2018). As a result, the role and effectiveness of integrated reporting in improving corporate transparency and accountability continues to be actively debated within the academic literature.

While the uptake of < IR> by companies globally is increasing, significant obstacles are preventing this uptake from being accelerated. < IR > is still not well defined; there is a lack of understanding within company practice, and a better framework is necessary for companies to confidently adopt this method (Maniora, 2017; Dragu and Tiron-Tudor, 2013b). < IR> requires a shift to integrated thinking. Companies may struggle with this, particularly if they have a strongly ingrained silo structure with little communication. If companies lack the culture for transparent dialogue, implementing < IR> can be challenging, while other companies may find it difficult to engage stakeholders. The benefits of < IR> are not immediately observed, and the process can be lengthy and costly to implement well (De Beer, 2015; Maniora, 2017; Hsiao et al., 2022). Second, there is confusion between frameworks and standards and uncertainty about how companies should report transparently using the < IR> framework. This issue needs to be addressed to improve < IR> practices. Companies have been bombarded by new reporting standards and are just coming to terms with reporting using the Global Reporting Index (GRI); some are also reluctant to adopt < IR>, citing it as a fad (De Beer, 2015). Mistry et al. (2014) find that the role of management accountants in the development of sustainability reporting is more profound in large organisations. Consistent with Mistry et al. (2014), Dissanayake et al. (2019) suggest that large company size and usage of the GRI guidelines are factors that promote sustainability reporting by listed companies. Additionally, it is the lack of < IR> regulation that allows the compromise of integrity among managers to occur. Ho and Taylor (2013) recognise that managers have superior wealth and knowledge, compared to shareholders, and they can choose to disclose or not at their discretion.

While voluntary disclosures are not a new concept, the 2008 Global Financial Crisis sought to reform corporate governance and voluntary disclosures by improving the quality of information disclosed (Ho and Taylor, 2013). Extant empirical evidence on voluntary disclosures is mixed, with some studies finding evidence of opportunistic reporting, while others find that voluntary reporting constitutes informative disclosure (Blacconiere et al., 2011). Society is challenging the notion that companies have a licence solely to operate for the purpose of making profit. This in turn is influencing accountants to challenge the traditional business reporting model (Dumay et al., 2016; Hsiao et al., 2022). It is this drive and the push towards more transparent, accountable companies that allow investors better decision-making resources that have demanded improved and increased voluntary disclosures. These voluntary disclosures often have a focus on ESG.

Traditionally, voluntary disclosures by companies may have been partially in their annual reports, included within their website or produced as a separate document and published. The rise of technology, particularly the internet, has allowed companies to rapidly distribute more complex documents in greater volumes to a large audience (De Villiers et al., 2014). As voluntary disclosures have gained popularity, more formal methods have been created to provide a framework for a company to report. These methods have included advanced reporting, game-changing reporting, triple bottom line reporting, true cost accounting and < IR> (Exter, 2014). These reports may have been modelled on guidelines such as the GRI or the Accounting for Sustainability Project.

Prior research has defined ESG activities as actions that identify a company as being concerned with society-related issues (Roberts, 1992). A survey by Rowbottom and Lymer (2009) found that up to 85% of individuals wanted better disclosure by companies and felt that the current reporting was unclear, and investors increasingly recognise that improved voluntary ESG disclosure is positively associated with a company’s financial performance. Additionally, accounting scandals, such as Enron, have promoted the implementation of standards to protect stakeholders and resulted in demands that changes be made to improve confidence in the standard of reporting (Bhasin, 2012; Rensburg and Botha, 2014). Voluntary reporting is considered essential to prevent financial crises, address climate change issues, protect human rights, prevent fraud and corruption and hold companies accountable (Baron, 2014). Maniora (2017) suggests that voluntary ESG disclosures can improve a company’s reputation, increase sales and the quality of staff, increase productivity and increase the quality of suppliers and investors. There have been calls to make many aspects of what currently voluntary reporting compulsory is, and some countries have made it mandatory to disclose ESG impacts, but most companies prefer the voluntary ESG approach to these issues (Stubbs and Higgins, 2018). This may be more appropriate as different companies, across various sectors, differ in their reporting needs.

Reynold and Yuthas (2008) note that voluntary ESG reporting is a form of moral discourse. Adopting a relational view with stakeholders requires stakeholder engagement not only in prescribing reporting requirements, but also in relation to significant aspects of the corporation such as mission, values and management systems. A strong stakeholder influence and strategic posture are positively related to ESG (see Roberts, 1992). Companies disclose voluntary ESG images so that they can legitimise their behaviours to their stakeholder groups and influence the external perception of reputation (see Branco and Rodriques, 2008).

It is believed that firms that operate in environmentally sensitive industries and those with better reputations are more likely to make voluntary ESG disclosures (Branco and Rodriques, 2008). Voluntary ESG disclosures are aimed at reducing the information asymmetry between managers and investors and providing clarification about long-term business sustainability issues that concern various stakeholder groups (Sharma and Davey, 2013; Zaini et al., 2018; Hsiao et al., 2022). In particular, voluntary ESG reporting is reported to improve business success: financially, internally and externally, by promoting investor decisions through transparency.

The KPMG Survey of Corporate Responsibility Reporting suggests that New Zealand is one of the countries with the greatest growth in ESG reporting (KPMG, 2017). Thus, a significant amount of research focuses on the merits and quality of voluntary ESG reporting in the New Zealand context (Hossain et al., 1995; Hooks et al., 2001). Additionally, there has been much research on the merits of < IR> (Burke and Clarke, 2016; Dumay et al., 2016). Given the differences between ESG and < IR>, less is known about the adoption rate of < IR> in the New Zealand context and how this compares to countries that compete in a similar market. This research study seeks to answer this question and investigate what companies are doing to fulfil their social contract with society (Brown and Deegan, 1998; Scherer et al., 2013).

This study adopts the theoretical lenses of decision usefulness and accountability to interpret voluntary sustainability reporting practices. Rather than treating these as abstract concepts, they are operationalised as evaluative criteria through which the quality and purpose of disclosures are assessed. Specifically, decision usefulness is used to examine the extent to which ESG and integrated reporting disclosures provide relevant, material and forward-looking information that supports stakeholder decision-making. Accountability, in contrast, is used to assess the extent to which disclosures reflect transparency, responsibility and answerability to a broader set of stakeholders regarding social and environmental impacts. Specifically, in our study, indicators such as materiality, connectivity and forward-looking information were interpreted for decision usefulness, while transparency, completeness and adherence to reporting frameworks were used as indicators of accountability. This approach enabled a theoretically informed interpretation of reporting practices beyond descriptive classification.

The concept of decision usefulness is grounded in the provision of information that is relevant, reliable and capable of influencing stakeholder decisions (Staubus, 2000; Deegan, 2003; IASB, 2018). Decision usefulness theory places emphasis on the needs of information users and how they utilise accounting information in decision-making contexts (Florou and Kosi, 2015). As argued by Staubus (2000), the central premise of the theory is the decision-usefulness objective, which positions accounting as a process of identifying and delivering information that is meaningful to decision-makers. Consequently, the identification of users and their information needs is anchored in this objective (Son, Marriott and Marriott, 2006), with accounting functioning as a mechanism for providing relevant information to appropriate stakeholders (Gray et al., 2014).

The decision usefulness objective was formalised in the Trueblood Report in the USA, which emphasised that financial reporting should support economic decision-making (Son et al., 2006). The American Institute of Certified Public Accountants (AICPA) further articulated that the primary objective of financial statements is to provide information useful to investors and creditors in making economic decisions. While this perspective prioritised providers of financial capital, it also acknowledged a broader group of stakeholders, including employees, by recognising that “while users differ, economic decisions are similar” (p. 18). Importantly, the Trueblood Report also highlighted that the societal goals of an enterprise are as significant as its economic objectives, thereby supporting the provision of decision-useful information to a wider stakeholder base.

Within this theoretical context, integrated reporting and ESG reporting can be understood as an extension of the decision usefulness objective beyond traditional financial reporting. In this study, decision usefulness is reflected in disclosures that demonstrate materiality, connectivity of information and alignment with long-term value creation. Integrated reports are therefore assessed in terms of their ability to provide coherent, decision-relevant insights into organisational performance, risks and future prospects. Disclosures that are generic, fragmented or lack a forward-looking orientation are interpreted as having limited decision usefulness.

A core element of the framework is the capitals model, which “provide[s] insight about the resources and relationships used and affected by an organisation” in its value creation process (IIRC, 2013, p. 4). This model extends the informational scope of reporting by incorporating multiple forms of capital – financial, manufactured, intellectual, human, social and natural – thereby enhancing the relevance of disclosures for decision-making. The framework also adopts an “inclusive market-led approach” (IIRC, 2016) aimed at improving the quality of information available to providers of financial capital and enabling a more efficient allocation of resources (IIRC, 2013). In doing so, it aligns closely with the decision usefulness objective by emphasising information that supports investment assessments and long-term value evaluation (EY, 2015; IIRC, 2015).

From a decision usefulness perspective, the value lies in its ability to enhance the connectivity and completeness of information. Traditional reporting frameworks often present financial and non-financial information in a fragmented manner, limiting their usefulness for holistic decision-making (Stent and Dowler, 2015; de Villiers et al., 2014). In contrast, IR integrates these elements into a unified narrative, linking strategy, governance, performance and risk (Busco et al., 2013; Stubbs and Higgins, 2014). This improved connectivity reduces information asymmetry and enables users, particularly investors and analysts, to form a more comprehensive assessment of organisational value creation over time (Barth et al., 2017). As such, this strengthens both the predictive value and confirmatory value of disclosures, which are central attributes of decision-useful information (IASB, 2018; Baboukardos and Rimmel, 2016).

Furthermore, IR introduces a strong forward-looking orientation, which is critical to decision usefulness. By incorporating discussions of strategic objectives, risks, opportunities and future outlook, integrated reports provide insights that go beyond historical financial performance. This forward-looking perspective is particularly relevant for long-term investors, who require information about sustainability, resilience and future cash flow potential. However, the extent to which such disclosures are decision-useful depends on their credibility, specificity and alignment with underlying organisational practices.

Empirical literature suggests that companies are more likely to provide integrated reports when stakeholders actively use such information in decision-making processes (Slack and Tsalavoutas, 2018). The decision usefulness of IR is therefore closely linked to its perceived value among users, particularly providers of financial capital and equity analysts. Investors are increasingly demanding integrated reports, using the information to inform assessments of value and support investment decisions (IIRC, 2015). Moreover, the growing importance of non-financial information, embedded within IR, highlights its relevance to mainstream investors, reinforcing the argument that integrated reporting enhances the overall usefulness of corporate disclosures (Slack and Tsalavoutas, 2018).

Accountability is conceptualised as the obligation of organisations to justify their actions and impacts to stakeholders. Within this study, ESG reporting is analysed as a mechanism through which firms discharge accountability for their ESG practices (Weber, 2014). Particular attention is given to the extent to which disclosures demonstrate transparency, completeness and adherence to recognised frameworks such as the GRI. Disclosures that are selective, inconsistent or lack standardisation are interpreted as weakening accountability, as they limit stakeholders’ ability to evaluate corporate conduct.

Accountability theory provides a critical lens for understanding voluntary sustainability disclosure by positioning reporting practices within broader relationships between organisations and their stakeholders (Bebbington and Unerman, 2018; Gray, 2006). In the ESG reporting literature, accountability extends beyond narrow financial stewardship to encompass a duty to explain and justify organisational actions to society, particularly in relation to social and environmental impacts (Gray et al., 2014). This perspective by Gray et al. (2014) conceptualises corporate reporting as a mechanism through which organisations discharge their responsibilities and respond to stakeholder demands for transparency. They argue that rather than viewing disclosure as purely informational, accountability theory emphasises dialogic engagement, ethical responsibility and the need for organisations to be answerable for both actions and omissions. Subsequently, this broader understanding is particularly relevant in voluntary sustainability disclosure contexts, where reporting is not mandated and therefore reflects managerial choices about what aspects of performance are made visible to external audiences.

ESG reporting is designed for accountability (Schonherr et al., 2021). The GRI has emerged as one of the most prevalent instruments for supporting firms in becoming more accountable for the social and environmental sustainability of their operations (Christensen et al., 2019). A core function of GRI is to define socially and environmentally desirable practices to provide some sort of accountability of firms through stakeholders for their actions and omissions with regard to these practices and outcomes (Bebbington, 2009). To effectively enhance accountability, institutional arrangements need to be designed in a way which imposes credible requirements on firm behaviour and ensures that adopters will generally fulfil these requirements (Schonherr et al., 2021).

According to Tamvada (2020), ESG has for most part remained voluntary and relied on self-regulation through codes of conduct with the decision to comply with the codes of conduct firmly within corporations. The emerging voices on ESG regulations may have encouraged some countries to formally legislate ESG obligations, as in New Zealand’s Resource Management Act 1991.

Accountability is “a moral or institutional relation in which entitlements are accorded to one agent (or group of agents) to question, direct, sanction or constrain the exercise of power by another” (Mcdonald, 2014). In the absence of accountability, there is no mechanism to question irresponsible behaviour and the actors are not answerable for their actions. Hence, accountability is essential element for an effective discharge of functions. Accountability keeps a check on the actions of actors who have the responsibility or obligation to discharge their functions under a role. The ethics of accountability demonstrates corporate obligations (Dillard, 2013). According to Dillard, society and corporate have respective and interdependent rights and duties towards each other for being part of the society and for the constant interactions with each other.

Within voluntary disclosure settings, accountability theory explains selective sustainability disclosure as a strategic process of constructing stakeholder accountability relationships under limited regulatory constraint, whereby sustainability reporting extends beyond formal financial accountability to reflect broader, organisation and pressure-dependent interpretations of accountability (O’Dwyer and Unerman, 2007; Hummel and Schlick, 2016). As a result, voluntary disclosures may either enhance genuine accountability by improving transparency and stakeholder engagement or alternatively serve as partial and selective representations of organisational performance (Weber, 2014). This duality highlights the importance of examining not only the extent but also the nature and quality of disclosures when assessing corporate accountability in sustainability reporting.

Legitimacy theory complements accountability theory by explaining the strategic motivations underlying voluntary sustainability disclosures, particularly as organisations seek to maintain or repair legitimacy in response to stakeholder expectations (Suchman, 1995; Deegan, 2002). The theory posits that organisations seek to align their activities with societal values and expectations to secure ongoing legitimacy and access to resources (Deegan, 2019). Sustainability reporting, therefore, can be interpreted as a response to legitimacy pressures, particularly as stakeholders increasingly demand transparency regarding environmental and social impacts (Deegan, 2019). In this context, disclosure is not only about accountability but also about managing perceptions and maintaining organisational legitimacy in the eyes of key stakeholders. Given the prominence of legitimacy theory in ESG and sustainability reporting research, it is often used in conjunction with other theoretical lenses to provide a more comprehensive explanation of disclosure behaviour (see Deegan, 2019).

Importantly, legitimacy theory enables a distinction between substantive and symbolic disclosure strategies, which is particularly useful for interpreting voluntary sustainability reporting practices. Substantive disclosures involve genuine changes in organisational practices accompanied by transparent and detailed reporting, whereas symbolic disclosures are primarily aimed at projecting an image of compliance without corresponding operational changes. Prior research shows that firms often adopt a combination of these approaches, using selective disclosure to manage legitimacy while decoupling reporting from actual performance improvements (Soobaroyen and Ntim, 2013). Applying this distinction in the present study allows for a more nuanced interpretation of voluntary sustainability disclosures by assessing whether reporting reflects meaningful accountability or symbolic attempts to maintain legitimacy (Soobaroyen and Ntim, 2013).

The theoretical lenses of decision usefulness and accountability therefore guided the content analysis by informing the evaluation criteria applied to corporate disclosures. Specifically, indicators such as materiality, connectivity and forward-looking information were interpreted as proxies for decision usefulness, while transparency, completeness and adherence to reporting frameworks were used as indicators of accountability. This approach enabled a theoretically informed interpretation of reporting practices beyond descriptive classification. The construction of the < IR> disclosure index, including the identification of guiding principles, content elements and scoring approach, follows the methodology developed by Jayasiri (2020), which is adapted to the New Zealand context in this study. The next section delineates the research method for the study.

Using an interpretative paradigm within a qualitative methodology, we undertook a content analysis of the top 50 companies listed on the NZX 50 (see Figure 1). The study follows a structured qualitative content analysis approach informed by prior disclosure index studies. Steenkamp and Northcott (2007) write that “content analysis is widely used in accounting research to reveal useful insights into accounting practices” (p. 12), and that this type of analysis is a “systematic method of categorising and analysing the content of texts” (ibid). According to De Villiers et al. (2019), qualitative researchers rely on developing concepts, theory and recommended practices that are broadly applicable to different settings when generalising their findings. They also explain that interpretive research is a novel type of research that deals with emerging forms of accounting and corporate reporting. An interpretative approach was therefore used because content analysis involves making subjective judgements as to the meanings of texts in the disclosures provided in the annual reports. Krippendorff (2004) explains that texts have no independent meanings, but are instead reader-dependent, because it is the reader who interprets the meaning as they engage with the text.

The objective of this study is not to measure disclosure volume or linguistic tone, but to evaluate the extent to which corporate reporting demonstrates substantive alignment with the normative architecture of the < IR> Framework and ESG reporting expectations. Constructs such as connectivity, materiality and strategic integration are context-dependent and require interpretive assessment of narrative coherence and cross-sectional consistency within reports. Accordingly, structured manual content analysis was considered methodologically appropriate.

We selected the 50 largest companies listed on the New Zealand Stock Exchange (NZX50) as the sample. These firms typically exhibit the highest levels of public accountability and visibility. Their annual reports are readily accessible through the NZX database and corporate websites. In addition, large publicly listed companies are more likely to produce comprehensive and comparable non-financial disclosures due to heightened stakeholder scrutiny and their greater engagement with voluntary reporting frameworks (Solimene et al., 2025; Schreck and Raithel, 2018). This sampling approach, therefore, enhances data availability, consistency and analytical robustness, consistent with prior disclosure research demonstrating a positive association between firm size and the extent of voluntary disclosure (Karim et al., 2013), as well as broader literature identifying firm size as a key determinant of voluntary reporting practices (Zamil et al., 2023). We reviewed both the companies’ published annual reports and the content that was provided in their company websites for voluntary disclosure information. The NZX database and the investor relations websites of the companies are the sources of these documents. The results of the data analysis will be used to give a deeper knowledge of New Zealand’s integrated reporting and ESG reporting practices.

Annual reports from the year 2019–2023 are the main source of data in this research. The 2019–2023 period is selected to enable longitudinal content analysis and < IR> and ESG disclosure index construction across a continuous sequence of annual reports, supporting within-firm comparison over time (Krippendorff, 2004; Guthrie et al., 2004). This data set captures the pre-pandemic baseline, COVID-19 disruption and post-pandemic adjustment, allowing assessment of both transient and sustained changes in < IR> and ESG reporting practices. Yi and Davey (2010) note that an essential tool used by managers to communicate what matters is the annual report, as it serves as a channel of communication for reaching out to different company stakeholders. We chose to focus on annual reports or other relevant published reports for the data set because social media and website disclosures are inherently unstructured and heterogeneous, with substantial variation in content, format and emphasis across firms, reflecting their non-standardised and supplementary role relative to formal reporting frameworks (Radwan and Russo, 2024; Zhong and Wang, 2023; Bryl and Supino, 2022). Moreover, online disclosures exhibit variability in content, lack alignment with established reporting frameworks and are subject to limited assurance and governance, raising concerns regarding reliability and validity in content analysis (Stuart et al., 2023; Radwan and Russo, 2024).

We combine qualitative content analysis with index construction to systematically code and categorise narrative disclosures into numerical indicators. This approach thereby enables the analysis to be translated into quantifiable measures and the facilitation of comparative analysis across firms and contexts (Krippendorff, 2004; Vourvachis and Woodward, 2015). This approach is reinforced by Wang et al. (2016). They explain that disclosure index construction uses qualitative content analysis to code predefined items, transforming narrative disclosures into quantifiable, comparable measures across firms. Furthermore, a disclosure index comprises a structured set of predefined items representing expected disclosures, typically derived from a framework’s guiding principles, content elements and prior literature, to ensure content validity and comparability across firms (De Villiers et al., 2017b). Disclosure index scoring typically adopts either weighted or unweighted approaches. This study applies the weighted method where items are assigned differential weights reflecting their relative importance, enabling assessment of both the extent and quality of reporting (Cooke, 1989). Inter-coder reliability of the content analysis findings was validated in the study as the authors independently applied the coding scheme to the same data, thereby enhancing the objectivity, replicability and credibility of the findings (Krippendorff, 2004). This study uses manual content analysis of annual reports, integrated reports, sustainability reports or any other relevant published reports that covered ESG reporting. The study used the two disclosure indices constructed for this study. Subsequently, depending on the reports provided by the company, each < IR> or ESG disclosure item was applied as the unit of analysis. This approach is consistent with established content analysis methodologies (Krippendorff, 2018) and prior accounting research (Beck et al., 2010).

The construction of the < IR> disclosure index in this study follows the methodology developed by Jayasiri (2020) and adapted for the New Zealand context. This process involves identifying the seven guiding principles and eight content elements of the framework, establishing the associated scoring approach and developing a comprehensive list of carefully selected disclosure items that may be reported in annual reports (Wang et al., 2016). By providing an approximate score that represents the degree of disclosure in the context for which the disclosure index was created, the disclosure index’s intended purpose would be fulfilled (Wang et al., 2016). An integrated report’s overall usefulness and information connectedness are improved when it is presented rationally, written in an easy-to-understand style and free of jargon (IIRC, 2013). A comprehensive list of carefully chosen items that may be revealed in annual reports is included in the Supplementary file. The next step in the construction of < IR> disclosure index is the determination of a scale scheme, which can be used to gauge the quality of disclosure (Yi and Davey, 2010).

Following Jayasiri (2020), a weighted disclosure index was used to assess the quality of < IR > disclosures. The Content Elements are fundamentally linked to each other and are not separate from one another (IFRS, 2021). This study analyses a weighted quality score for content elements. “A score of ‘0’ is assigned for non-existence or absence of a content elements index item and ‘1’ is assigned for the existence or presence of the content element index items in the annual report, resulting in a maximum score value of 116 (116 items * maximum score value of 1)” (Jayasiri, 2020, p. 215). A score of 2 was assigned where disclosures provided entity-specific explanation with qualitative detail. A score of 3 required quantitative substantiation, cross-referencing to strategy or performance indicators, or dedicated structured presentation (e.g., tables or integrated performance metrics).

Recent disclosure research has increasingly used computational textual analysis and machine learning techniques to assess features such as tone, sentiment, readability and thematic clustering. While these approaches are valuable for large-scale linguistic pattern detection, they are less suited to evaluating conceptually embedded constructs such as materiality, connectivity and strategic coherence, which require contextual interpretation across sections of the report. Given the study’s focus on substantive alignment with the < IR> guiding principles, a structured manual content analysis was considered methodologically appropriate. The quality of < IR> disclosure would be evaluated in this study using a four-point (0–3) scale to measure the disclosure indexes on the information provided by the companies in their annual report. We adopted a four-point scale (0–3) for Guiding principles and a two-point scale for content elements. Each of the 44 disclosure elements of guiding principles received a weighted quality score ranging from 0 to 3. “The ultimate total score calculated for each of 44 index items is out of a maximum score of 142 (44 items* maximum score value of 3)” (Jayasiri, 2020, p. 214). The description of the four-point scale is explained further. “0” would be allocated the item is missing from the report, “1” would be assigned for the information disclosed in the report is general or not specific., “2” would be assigned for a detailed information disclosed in the report and “3” would be allocated where the information is disclosed extensively using tables, figures, diagrams, examples, a separate section and so forth.

A weighted quality score for content analysis was also utilised in this study. “A score of ‘0’ is assigned for non-existence or absence of a content elements index item and ‘1’ is assigned for the existence or presence of the content element index items in the annual report, resulting in a maximum score value of 116 (116 items * maximum score value of 1)” (Jayasiri, 2020, p. 215). The identification of < IR> adoption was based on explicit evidence in company disclosures. A firm was classified as an < IR> adopter if its annual report or accompanying disclosures explicitly referenced the International < IR> Framework, demonstrated structured alignment with the framework’s guiding principles and content elements or was explicitly labelled as an integrated report. The International Integrated Reporting Council (IIRC, 2013) released the International IR Framework in December 2013. The seven guiding principles of < IR> are Strategic focus and future orientation, Connectivity of information, Stakeholder relationships, Materiality, Conciseness, Reliability and completeness, Consistency and comparability (IFRS, 2021). These principles are further described in Table 1.

An integrated report’s planning and delivery are guided by the seven Guiding Principles, which also influence the report’s content and informational layout (IFRS, 2021). The specific circumstances of every company will determine what is included in its integrated report. As a result, the Content Elements are presented as questions instead of as lists of disclosures (IFRS, 2021). An integrated report includes eight Content Elements, which are further described in Table 2.

The creation of such a disclosure index offers companies guidelines outlining the most effective process for generating integrated information, which in turn facilitates research into the contents’ historical development as well as the level of maturity of the principles, concepts, elements and techniques used in integrated reports (Barth et al., 2017). We created disclosure indexes based on seven guiding principles and eight content elements of < IR> in Table 3.

The supplementary file illustrates the disclosure index’s broad coverage and thorough focus, highlighting the necessity of creating disclosure index items based on the < IR> framework.

Firms that provided sustainability or ESG disclosures without such integration or explicit alignment were classified as non-<IR > adopters and analysed under ESG reporting. This ranking system is comparable to a study carried out by (Nursimloo et al., 2020) on the influence of board characteristics on TBL reporting. A given item on the checklist receives a score of “0” for no evidence in the report. Score “1” is assigned if the information disclosed in the report is minimal, probably limited to company policies. Score “2” is for a moderate amount of evidence available in the report. And score of “3” is for detailed information is disclosed which may include tables, figures, diagrams, examples, a separate section, etc. The checklist is shown in Table 4.

The findings are interpreted through the lenses of decision usefulness and accountability. Specifically, integrated reporting practices are analysed in terms of their ability to enhance decision-useful information for stakeholders, while ESG disclosures are examined as mechanisms for discharging corporate accountability. This approach enables a deeper evaluation of not only the extent of reporting, but also its underlying quality and purpose.

A total of 24 NZX-listed companies conducted integrated reporting (see Table 5). Table 5 provides information on the < IR> implementation by the 24 NZX-listed companies over a five-year period. It is evident that Meridian, Sanford, A2 Milk, NZX Ltd., Arvida Group, Ryman Healthcare, Port of Tauranga, Tourism Holdings, Precinct Properties and Mercury NZ Ltd are the ten companies that consistently adopted < IR> from 2019 to 2023 and represents 20% (10 out of 50) of the top 50 NZX-listed companies. Sky City, Fisher & Paykel, Summerset Group, Spark, Contact Energy and Manawa Energy started adopting < IR> from the year 2020. Recent years’ adoption includes Kathmandu, Westpac and Freightways. De Villiers and Sharma (2020) state that < IR> gives management a better understanding of how actions and business operations affect the company, including which activities generate value and which do not.

The contents of the company reports were examined for the data pertaining to the disclosure index of this study, which is based on guiding principles and content elements of < IR> framework. Table 6 shows the companies according to their totals for the < IR> seven Guiding Principles and discloses the information based on the integrated reports of the 24 NZX-listed companies that was analysed as per the seven guiding principles. To enhance analytical depth, the findings are interpreted through a clustering approach that identifies groups of firms exhibiting similar reporting behaviours.

We provide the reporting in three clusters, with Cluster 1 as advanced integrators, Cluster 2 as moderate/transitional adopters and Cluster 3 as symbolic/partial adopters. Cluster 1 of advanced integrators are those firms with high scores of 27–29 and have strong patterns across all guiding principles. Cluster 2 of moderate/transitional adopters has mid-range scores of 24–26 and has strengths in conciseness but weaker in connectivity/materiality. Cluster 3 of symbolic/partial adopters represent lowers scores of below 24 range and has less detailed and less integrated disclosures. Rather than viewing the results at an individual firm level, the analysis reveals three distinct clusters of integrated reporting practices among NZX-listed companies. First, a group of “advanced integrators” (e.g., Sky City, Sanford, Meridian, Westpac) demonstrate consistently high scores across all guiding principles. This indicates a strong alignment with the framework and a high level of disclosure integration. These firms exhibit extensive use of narratives, visual elements and cross-referencing, particularly in materiality and reliability dimensions. Second, a larger group of “transitional adopters” display moderate scores across most principles. While these firms provide relatively concise disclosures, their reporting tends to lack full connectivity between strategy, performance and sustainability elements, suggesting partial adoption of integrated thinking. Examples include companies with scores of 24–26, which include KMD Brands, Fonterra Shareholders’ Fund Unit, Synalit Mild Limited amongst others (see Table 7). Third, a smaller group of “symbolic adopters” (e.g., lower-scoring firms such as Manawa Energy) demonstrates weaker alignment with the framework. The disclosures are less detailed and less integrated which indicates the reporting may be driven by compliance or signalling motivations than by substantive integration.

The weighted quality score for content elements in this study was a score of “0” which is assigned for non-existence or absence of a content elements index item and “1” is assigned for the existence or presence of the content element index items in the annual report. It was found that all 24 companies scored “1” as they all included a good amount of information regarding organisational overview and external environment, governance, business model, risks and opportunities, strategy and resource allocation, performance, outlook and basis of preparation and presentation for the report. Table 7 shows the total scores of seven guiding principles and eight content elements based on this study.

The total < IR> disclosure score combines the numbers from the total column of Table 6 and the weighted quality score of 8, as all 24 companies included a good amount of information regarding organisational overview and external environment, governance, business model, risks and opportunities, strategy and resource allocation, performance, outlook and basis of preparation and presentation for the report. For instance, Sanford scored 19 in Table 6 and “8” in < IR> content element which makes the total score of “27” as shown in Table 7. The maximum total score a company can score is 29; the highest score that a company can score in Table 6 is 21 and the highest score that a company can score in < IR> content elements is 8.

According to a prior study, it was found that only three companies were doing < IR> until 2018, which were Meridian Energy Ltd., Sanford Ltd. and Z Energy Ltd. In that Sanford Ltd was the highest scorer as per the previous study’s ranking (Sharma et al., 2018). In this study, it was found that 24 NZX-listed companies, out of the top 50 NZX-listed companies, were doing < IR>, this is 48% of NZX-listed companies. A total of 20% of them adopted < IR> for all the five-year period starting from year 2019 to 2023 while 12% of them started from the year 2020 and 4% of them started Integrated Reporting from 2023. The findings provide a clear picture of New Zealand’s use of < IR> and highlight advancements in < IR> reporting. The findings of this study add significant perspectives to New Zealand’s < IR> practice by drawing attention to the growing popularity of < IR>, addressing differences in < IR> quality, pointing out issues that require improvement, recognizing the significance of involving stakeholders and encouraging awareness and education. However, there were significant variations in the quality of < IR> amongst companies. While certain companies such as SkyCity, Sanford, Meridian and Westpac were able to effectively apply the principles of the IIRC framework, others such as Manawa Energy failed to detail and offer relevant information as required. To improve the standards and effectiveness of < IR> in New Zealand further, companies should devote their efforts towards the Content Elements. Companies providing information should be more detailed and specific on each content element, such as business model, risks and opportunities and performance. Companies should seek for and systematically gather stakeholders’ information requirements which should dictate companies’ <IR > disclosures (Hoque, 2017). Engaging with stakeholders not only provides valuable data about a company but also fosters relationships and trust by discussing its performance and goals with diverse stakeholders (Hoque, 2017). Educating stakeholders on the advantages of < IR > is also crucial. Companies need to explain the importance of < IR> to the stakeholders, aimed at stressing the importance of transparency, accountability and long-term value delivery.

Another reason for adopting < IR> could be due to a sensitive industry, for example, the energy sector. It is found that majority of the top energy sector companies, such as Meridian, Mercury, Contact Energy, Genesis and Manawa Energy, have adopted < IR>. This industry is often challenged with considerable social and environmental impacts. They can demonstrate their commitment to long-term value creation, stability and sustainability using < IR>. They could attract socially responsible investors and mitigate reputational issues by integrating finance, environment and society. Also, aligning with the literature review, interacting with stakeholders is effective as these interactions provide increased data about a company than just its financials, which in turn helps to build relationships and trust (Hoque, 2017).

Furthermore, the three clusters outlined above can be interpreted through the lenses of decision usefulness and accountability. Advanced integrators provide highly decision-useful disclosures by integrating forward-looking, material and connected information, thereby reducing information asymmetry and enhancing investor decision-making. In contrast, symbolic adopters provide limited decision-useful information, as disclosures are often fragmented and lack specificity. From an accountability perspective, advanced integrators demonstrate substantive accountability through transparent and comprehensive disclosure, whereas symbolic adopters reflect selective disclosure practices consistent with symbolic legitimacy strategies. In the next section, we analyse the remaining 26 NZX-listed companies that did not prepare < IR> but disclosed information with ESG reporting.

The remaining 26 companies that did not provide < IR> were analysed for how they disclose information on ESG disclosures. While there were differences in the quantity and quality of disclosures made by companies within each sector, the analysis of ESG disclosures made by the 26 NZX-listed companies revealed trends showing that some sectors generally disclosed more ESG information than others. Out of the top 50 NZX-listed companies, 22% of the companies disclosed information about ESG on their website as well as annual reports. On their websites, 30% of the companies revealed their policies and charters. Policies such as the Continuous Disclosure Policy, Diversity and Inclusion Policy, Whistle Blower Policy, Anti-Bribery Policy, Board Charter, Audit and Risk Committee Charter and People and Remuneration Charter were among the common examples of disclosures. The property industry showed the greatest variation, with some businesses revealing a great deal of information and others revealing very little. The reason for such level of disclosure is that it is mandatory for these companies to show climate-related disclosures.

The scoring for the ESG disclosure is separately provided in Tables 8–11. Table 8 shows how the companies scored on the environmental disclosures; an item receives a score of “0” for no evidence in the report, a score of “1” is assigned if the information disclosed in the report is minimal, probably limited to company policies, a score of “2” is for moderate amount of evidence is available in the report and a score of “3” is for detailed information which may include tables, figures, diagrams, examples, a separate section, etc. The lowest score a company can score is “0” while the highest score a company can score is 18 as there are six items where each item can receive the highest score of “3”. It was found that majority of the companies received a score of “2” for most items. A thorough and in-depth extent of disclosure on a given environmental item is indicated by a higher score in that column. For example, an “Environmental audit, management and systems score of “3” indicates that the company offers thorough details regarding its audit procedures, findings and any remedial measures implemented.” By offering thorough information and supporting documentation, some companies show a strong commitment to environmental transparency. For example, Argosy, Goodman, Investore, Kiwi Property, Property for industry, Stride Property, Vital Healthcare and Chorus scored higher in environment audit, management and systems. This suggests they have strong internal procedures for evaluating and controlling environmental hazards.

It was also found where minimal or no disclosure was available, which was usually in the case of “Any reference to environmental law or guideline” item. Here majority of the companies scored “1” and some companies scored “0” (see Table 9) where they had no information available related to that item. Mandatory climate-related disclosures are a significant trend in environmental disclosure (Ministry of Business, Innovation and Employment, 2024).

Table 9 shows the scoring for social disclosures by the 26 NZX-listed companies. The scoring is like the environmental scores in Table 9. It is found that majority of the companies received a score of “1” and “2” under each item. For instance, employee dedication item was scored “1” by most of the companies as the information found was limited. Majority of the companies scored “2” under the code of ethics and employee training and education item.

Table 10 shows that the Governance Disclosure below of the 26 NZX-listed companies. The scoring, which is comparable to that for environmental and social disclosures, is further discussed. The lowest score a company can score is “0” while the highest total score a company can score is 21 as there are seven items where each item can receive the highest score of “3”. It is evident that all companies scored “3” under the earnings or sales forecast items, as that information is considered vital information for any business to include in their annual reports. Information provided by all the companies related to sales and profits was in depth. It is also evident that 48% of the companies were doing some kind of donations and for this they scored “1”. In Table 11, we show the cumulative total score of ESG reporting by all 26 companies, combining the total of ESG disclosures (ranked according to highest total score).

To illustrate, Sky Network Ltd in Table 8 has the total score for environmental disclosure as 6; for social disclosure in Table 9 the total score is 13 and for governance disclosure in Table 10 the total score is 10. By combining all three disclosure totals, a combined total of 29 is obtained. The highest score that a company can score is 63. This total comes up by combining the highest score in each disclosure for each company. Based on Tables 8–11, ESG clusters were formed, with Cluster 1 being high ESG disclosure leaders, which were mainly the property sector. The Cluster 1 companies had a high score of 35–40 (see Table 11). They had strong ESG disclosure. The strong disclosures were driven in part by regulatory pressures and certification requirements such as Green Star ratings.

A second group consists of moderate disclosures that provided a balanced but uneven level of ESG information. They had reasonable but uneven ESG reporting. Their middle scores ranged from 30 to 34 (see Table 11). A third group was low disclosure or reactive firms. They had low scores of below 30 (see Table 11). The ESG disclosures were limited and generic disclosures (e.g., Air New Zealand). The disclosure was often limited to policy statements, suggesting a reactive rather than strategic approach to sustainability reporting.

Based on the above findings of ESG reporting by top 26 companies listed on the NZX, the findings appear rather mixed. While some companies, particularly those in the property industry, disclosed detailed governance structures and policies with regard to ESG matters, there were companies which did not make substantial disclosures. These patterns reflect differing accountability orientations. ESG leaders demonstrate stronger accountability by providing more complete and transparent disclosures, whereas low disclosure firms reflect weaker accountability characterised by selective and inconsistent reporting. From a decision usefulness perspective, the absence of standardisation among lower-tier firms reduces comparability and limits the usefulness of ESG disclosures for stakeholders.

The findings highlight important implications when interpreted through the lenses of decision usefulness and accountability. While there is evidence of increasing engagement with both ESG and integrated reporting, the extent to which these practices fulfil their intended theoretical roles remains uneven. Many disclosures fall short of providing decision-useful information due to limited integration, lack of forward-looking insights and weak comparability. Similarly, accountability is constrained by inconsistent reporting practices and limited adherence to established frameworks. A key contribution of this study is the identification of structured reporting patterns across firms based on clustered disclosure practices. Rather than a homogeneous adoption of voluntary sustainability reporting, the findings reveal three distinct groups of firms: advanced integrators, transitional adopters and symbolic/partial adopters. These clusters demonstrate systematic variation in the extent to which reporting practices align with the principles of integrated reporting and ESG disclosure quality. Advanced integrators exhibit high levels of connectivity, materiality and forward-looking disclosures, suggesting a more mature adoption of integrated thinking. Transitional adopters display partial alignment, with relatively strong presentation but weaker integration across strategy and sustainability dimensions. Symbolic adopters, by contrast, provide fragmented and less detailed disclosures, indicating limited alignment with the underlying intent of voluntary reporting frameworks.

These structured patterns can be further theorised using legitimacy theory, particularly the distinction between substantive and symbolic legitimacy strategies. Substantive disclosure is reflected in the practices of advanced integrators, where reporting is supported by demonstrable integration of financial and non-financial information and aligns with genuine organisational changes. In contrast, symbolic disclosure is more evident among lower-tier firms, where reporting appears to prioritise impression management and compliance signalling over meaningful integration. Transitional adopters occupy an intermediate position, reflecting a hybrid form of legitimacy-seeking behaviour in which firms attempt to respond to stakeholder pressures but have yet to fully embed sustainability within organisational processes.

The findings of the research offer insightful information about the present status of Integrated Reporting < IR> and ESG reporting practices among the top 50 NZX-listed companies. With many businesses increasingly integrating < IR> practices into their annual reporting, there has been an evident rise in the adoption of < IR>. The results of this study are in line with previous research conducted by Hogan and Lodhia (2011) and Arora et al. (2022) that emphasizes the decision usefulness and transparent opinions in explaining organizational ways to sharing ESG reporting information. Since integrated reporting incorporates both financial and non-financial data as well as overall performance data, it was widely believed to be an efficient instrument for communicating an organization’s value creation story (Arora et al., 2022).

With regard to < IR> reporting, the findings provide a clear picture of New Zealand’s use of < IR> and highlight advancements in < IR> reporting. The findings of this study add significant perspectives to New Zealand’s < IR> practice by drawing attention to the growing popularity of < IR>, addressing differences in < IR> quality, pointing out issues that require improvement, recognizing the significance of involving stakeholders and encouraging awareness and education. However, there were significant variations in the quality of < IR> amongst companies. While certain companies such as SkyCity, Sanford, Meridian and Westpac were able to effectively apply the principles of the IIRC framework, others such as Manawa Energy failed to detail and offer relevant information as required. To improve the standards and effectiveness of < IR> in New Zealand further, companies should devote their efforts towards the Content Elements. Companies providing information should be more detailed and specific on each content elements such as business model, risks and opportunities and performance. Companies should seek for and systematically gather stakeholders’ information requirements which should dictate companies’ <IR > disclosures (Hoque, 2017). Engaging with stakeholders not only provides valuable data about a company but also fosters relationships and trust by discussing its performance and goals with diverse stakeholders (Hoque, 2017). Educating stakeholders on the advantages of < IR > is also crucial. Companies need to explain the importance of < IR> to the stakeholders aimed at stressing the importance of transparency, accountability and long-term value delivery. Also, aligning with the literature review, interacting with stakeholders is effective as these interactions provide increased data about a company than just its financials, which in turn helps to build relationships and trust (Hoque, 2017).

The results of this research show that the 24 companies who conducted < IR> produced reports that were clear, concise, included thorough and helpful data and any external links, which were readily accessible from their report. < IR> increased information quality for financial capital providers, including equity traders (Dumay et al., 2016). Although the quantity of the data varied widely, adhering to guidelines assured thorough and important information. Companies adhering to < IR> principles are more likely to provide useful optional information for investors to make informed long-term decisions. Integrated reporting enhances the decision usefulness of corporate disclosures by integrating financial and non-financial information within a coherent narrative of value creation. By explaining how organisational strategy, governance, risks and opportunities interact with environmental and social factors, IR provides investors with information that supports a more comprehensive assessment of long-term organisational performance and resilience. This integrated perspective helps reduce information asymmetry between companies and capital providers by clarifying how non-financial factors such as climate risks, resource dependencies and stakeholder relationships may affect future financial outcomes. Consequently, investors are better positioned to evaluate the sustainability of earnings, assess long-term risk exposure and allocate capital towards companies that demonstrate credible long-term value creation strategies. The findings show how New Zealand listed companies have gone about implementing < IR> and recognise some steps taken towards effective disclosure. According to the findings, there were more < IR > adopters in comparison to the years prior to 2019, indicating that more companies recognize the value of a comprehensive view of a company’s performance.

Stakeholders’ interaction with both mandatory and voluntary business disclosures has increased in recent years (Dumay et al., 2019). Many companies use material issues such as economic, environmental and social risks as an opportunity to restore their license to operate the company (Dumay et al., 2019). The finding shows that in addition to information on strategic goals, material issues, targets and progress toward those targets, most of the companies included thorough summary tables on Material Issues and Value Creation. Creating a focus, decision usefulness and accountability was a major advantage for companies that implemented < IR> compared to those that did not. Readers were given a clear understanding of the company’s strategy and its capacity to succeed for its stakeholders by concentrating on decision usefulness (Sharma et al., 2018). While integrated reporting now strives to present information regarding broad risk assessment and potential future value growth to be useful to financial institutions and potential investors, sustainability reporting still aims to provide social, environmental and economic information to a wide range of stakeholders (De Villiers et al., 2014). This can be aligned with the literature of this study where Hoque (2017) claims that professionals and promoters of integrated reporting indicate that < IR> raises a company’s transparency and accountability regarding its commitment to sustainability by showcasing the link between financial and sustainable accomplishments in a single document. By articulating the connections between financial performance and ESG factors, integrated reporting enables investors to better assess the sustainability of value creation over time.

A central premise of integrated reporting is that value creation occurs through the interaction of multiple forms of capital, including financial, manufactured, human, intellectual, social and relationship and natural capital. The findings suggest that companies adopting IR increasingly frame their disclosures around this broader conception of value creation. By linking strategic objectives, material sustainability issues and performance outcomes, integrated reports provide insights into how firms manage trade-offs between different capitals and balance the interests of various stakeholder groups. For investors, this information is particularly relevant because it signals how firms are positioning themselves to maintain competitive advantage and manage long-term environmental and social risks. For other stakeholders, such disclosures enhance transparency regarding how corporate activities affect broader societal and environmental outcomes.

This research aligns with Stubbs and Higgins (2014) as it provides a critical evaluation of the advantages of integrated reporting to change things in a way that promotes sustainability. Slack and Tsalavoutasb (2018) note that < IR> has the potential to enhance the company’s reporting and decision usefulness for investors by providing a comprehensive explanation of their business model, including how they create value and by promoting the disclosure of non-financial information that is relevant to the company’s long-term value creation, which is evident from this study. Overall, the results contribute to the discussion of how < IR> influences management’s attention to ESG concerns, including stakeholders other than investors, as noted by Bernardi and Stark (2018). Arora et al. (2022) state how crucial stakeholder participation is while implementing and how beneficial stakeholder decisions are. Companies that did not adopt < IR> often stated that they were creating value for their stakeholders. This study supports De Villiers et al. (2014) study, which argues that traditional approaches are typically retrospective, while < IR > is more future-focused, which is in line with the prior literature.

Integrated reporting therefore shifts corporate reporting from a primarily retrospective focus on historical financial performance toward a forward-looking narrative that emphasises strategy, risk management and future value creation. This forward orientation is particularly valuable for long-term investors such as pension funds and institutional investors who require information on how organisations intend to generate sustainable returns over extended time horizons. By articulating the relationships between ESG performance, business strategy and financial outcomes, IR allows investors to incorporate sustainability considerations into valuation and investment decisions.

In this study, it was found that 26 companies of the top 50 NZX-listed companies have not adopted < IR> and were concentrating on ESG reporting. According to the findings, it was evident that property industry companies were leading in providing ESG-related information, although they do not belong to sensitive industries such as energy and mining. Communities are significantly impacted by real estate firms in a number of ways. First, their development and construction projects have a direct impact on the ecology, affecting the expansion of cities, transportation networks and metropolitan areas (Primior, 2024). Second, the role they play in the property market directly impacts housing quality, affordability and availability, which determines where and how much people live (Primior, 2024). Real estate directly and indirectly allows the generation of jobs and income, positively affecting the growth of the economy by contributing to local economics as a trade. The modes of natural resource extraction across their developments will have a vast impact on the environment, climate change and other natural resources (Primior, 2024).

It was found that the energy sector companies were adopting < IR> or else they would be leading in the ESG disclosure ranking of this study. There are multiple reasons why property industry companies are giving a lot of information on ESG that are explained further. Colliers (2024) note that ESG components, including waste management, water conservation and energy efficiency, are increasing demand for properties that follow sustainable practices, which is changing how commercial real estate is developed and marketed. As many companies aim for Green Star ratings, this change in demand is influencing how commercial properties are created, run and promoted (Colliers, 2024). To improve air quality, lower heat and lessen a property’s environmental impact, ESG is encouraging sustainable design and construction that makes use of green roofs, renewable energy sources and water-saving techniques (Colliers, 2024). Prior studies also show that companies may engage in several years of ESG reporting before adopting IR (Hsiao et al., 2022; Lodhia, 2015). Also, the potential for enhanced environmental disclosures can result in increased accountability and transparency, enabling stakeholders to evaluate the environmental performance and effect of a business (Caputo et al., 2021). Furthermore, the social disclosure policies of NZX-listed companies are being influenced by worldwide trends in social engagement and sustainable business (Meech and Bayliss, 2021).

Some of the factors that are responsible for trends in the governance dimension include investor pressure and mandatory disclosure requirements (Bell, 2021). Investor pressure has significantly increased because of their increased focus on stakeholder capitalism and ESG issues (Bell, 2021). Companies are disclosing more information about their governance, social responsibility and environmental effect. Increasing interest from investors in sustainable investing and stricter regulations are the main drivers of this trend (Khamisu et al., 2024). There is great potential for companies to continue to strengthen their governance disclosures (NZX, 2021). By putting transparency first, businesses can create value, reduce risk, establish credibility, win over investors and cultivate enduring relationships.

An important concern that will increasingly affect every facet of a company is climate change. Companies risk falling behind those who are taking advantage of the possibilities and acting proactively if they do not take climate risk into account in every part of their organizational decision-making process as development continues to accelerate (PwC, 2021). It was found that out of 26 listed companies (52% of the top 50 listed companies) that were not doing < IR>, 35% of companies have published separate climate-related disclosure reports. This could be attributed to the New Zealand Government that has enacted laws requiring certain major companies in the financial markets to make disclosures about climate change. Investors find it challenging to determine which companies are most vulnerable to climate change, which companies are best equipped and which companies are taking action (TCFD, 2017). The Financial Stability Board formed an industry-led task force, which is the Climate-Related Financial Disclosures Task Force, to assist in determining the data required for lenders, investors and insurance underwriters to accurately evaluate and price climate-related risks and opportunities (TCFD, 2017). The Task Force’s report lays forth guidelines for presenting information regarding the opportunities and risks associated with climate change in a clear, comparable and uniform manner (TCFD, 2017).

The common framework used by companies for ESG Reporting was the GRI framework. It was also found that most of the companies’ targets regarding climate disclosure were to reduce carbon emissions as well as be carbon zero. Companies are also compliant with the Task Force on Climate-related Financial Disclosures (TCFD). Some of these companies had a separate TCFD report. The GRI and TCFD frameworks, however, while different in nature, are beginning to be viewed as complementary frameworks for effective ESG reporting. When these frameworks are aligned, organizations can convey significant details addressing climate-related risks and opportunities comprehensively. In this way, the GRI framework offers indicators that can be employed to fulfil TCFD’s specific disclosure obligations. Companies may be more likely to adopt IR after several years of ESG disclosure (Hsiao et al., 2022). A previous study conducted in 2018 by Sharma et al. found that three NZX-listed companies were using IR, a number that has since increased to 24 companies. It appears that most companies that engage in ESG disclosure have subsequently chosen to adopt IR reporting.

Most integrated reports come from the Asia Pacific, Middle East and Africa and Europe. Certain nations within the region are at the forefront of implementing integrated reporting. For example, a significant percentage of the sampled reports in the Asia Pacific region are from Japanese companies (IFRS, 2022). Since the Japanese Corporate Governance Code was created in 2015 and the Integrated Reporting Framework was deemed a suitable framework to execute the Code’s requirements, integrated reporting has gained widespread adoption in Japan (IFRS Foundation,2022). Most of the sampled reports in the Middle East and Africa area are published by companies that are listed on the Johannesburg Stock Exchange and are required to produce an integrated report. Throughout Europe, integrated reporting is widely used (IFRS, 2022). In Australia, 75% of ASX200 companies and 98% of ASX50 companies “focused their reporting on value creation for shareholders and/or other stakeholders and not just on historic financial earnings” (KPMG Australia, 2022, p. 12). Although the findings of our research show that there is an increase of 42% in the adoption of < IR> by the top 50 NZX-listed companies since 2019, the < IR> adoption rate of New Zealand companies is certainly falling behind as the remaining 26 companies, which are 52% of the top 50 listed companies, have not adopted < IR>.

This study examines the extent of adoption of < IR> and ESG reporting practices by NZX 50 companies. In a prior study (Sharma et al., 2018), it was found that only three NZ-listed companies adopted < IR> prior to 2019. This study provides insightful evidence of the growing trend of < IR> adoption in New Zealand. It was found that 24 out of the top NZX 50 (48%) listed companies have adopted < IR>. Japan, the USA, the UK, South Korea, Australia and China are the top six trading partners of New Zealand. Comparatively speaking, New Zealand has not made as much development as its top six international trading partners (KPMG, 2022). Although < IR> was introduced a decade ago, New Zealand still lacks the adoption rate of < IR> compared to other countries, such as South Africa, where < IR > is mandatory. KPMG (2022) states that New Zealand’s six trading partners stand at around a 79% adoption rate of < IR>. KPMG (2022) and IFRS (2022) state that < IR > is strong in the Middle East, Asia Pacific and Africa. This could be improved by mandating < IR> in the same way the New Zealand government has made mandatory for climate-related disclosures as currently < IR > is voluntary in New Zealand and Australia. It is also likely that companies, after gaining experience in ESG reporting, subsequently adopt integrated reporting (IR) (see Hsiao et al., 2022). This trend has strengthened over time; a 2018 study identified only three companies adopting IR (Sharma et al., 2018), whereas the number has since increased to 24. This represents a substantial expansion in the adoption of IR among NZX-listed companies.

Importantly, this study moves beyond simple measures of adoption by identifying distinct clusters of reporting practices across firms. These clusters reveal that voluntary sustainability reporting is not uniformly implemented but instead reflects varying levels of maturity and strategic intent. Advanced integrators demonstrate a high degree of alignment with the principles of integrated reporting and ESG frameworks, while transitional and symbolic adopters reveal partial or surface-level engagement. This clustering provides a more nuanced understanding of reporting quality and emphasises that the effectiveness of voluntary disclosures depends not only on their presence but also on their depth, coherence and integration.

The findings also contribute to legitimacy theory by illustrating how firms use voluntary sustainability reporting as a mechanism to manage legitimacy in different ways. While some firms engage in substantive legitimacy strategies by embedding sustainability within their operations and disclosures, others rely on symbolic reporting practices to maintain legitimacy without corresponding organisational change. This reinforces the dual role of sustainability reporting as both an accountability mechanism and a strategic communication tool aimed at influencing stakeholders’ perceptions. It is evident that implementation of < IR> improved sustainability reporting. This study contributes to the literature by providing empirical evidence on how integrated reporting adoption among NZX-listed companies supports the decision usefulness objective of corporate reporting while emphasising long-term value creation. The findings demonstrate that firms adopting IR increasingly link financial performance with ESG-related risks, opportunities and strategic objectives, thereby reinforcing the integrated reporting framework’s emphasis on sustainable value creation for both investors and broader stakeholders.

There is strong support for < IR> as a reporting option to satisfy the requirements of non-financial reporting standards, which may see it remain in place. It is challenging to predict < IR> becoming mandatory internationally. This largely depends on the different reporting organizations’ capacity to effectively advocate for stock exchanges to support their standards and for government legislation to support them (De Villiers and Dimes, 2023). This study shows that < IR > is widely used voluntarily by consultants and practitioners who view it as an appropriate instrument for reporting to several stakeholders (De Villiers and Dimes, 2023). This will help companies to provide a holistic view of their performance, enhance decision-making and improve stakeholder engagement. Integrated reporting also contributes to broader stakeholder value creation by highlighting how organisational activities affect multiple stakeholder groups and forms of capital. Through the disclosure of material environmental and social issues, companies demonstrate how they manage relationships with employees, communities, regulators and the natural environment. Such transparency can strengthen organisational legitimacy, improve stakeholder trust and support the long-term sustainability of the firm. Consequently, IR not only informs investors but also facilitates dialogue between organisations and stakeholders regarding sustainable value creation.

The improvement in < IR> and ESG reporting in New Zealand is likely a result of a combination of factors, including external pressure and legitimacy reasons. Global trends have placed pressure on companies worldwide to improve their ESG performance and reporting (De Villiers and Dimes, 2023). Investors increasingly demand strong ESG-related information, which is another external pressure, as investors understand that ESG can play a significant role in their decision to invest in the company (De Villiers and Dimes, 2023). Regulatory changes by the New Zealand Government of mandating climate-related disclosures are another factor of external pressure (Ministry for the Environment, 2023). Since 2019, there has been a significant rise in < IR> adoption, with 48% (24 companies) of NZX companies conducting < IR>. This suggests companies recognize the value of a comprehensive view of performance. The quality of < IR> varied greatly. Companies such as SkyCity and Sanford excelled, while Manawa Energy lacked detail. This highlights the need for consistent and clear reporting practices. Property industry companies had the highest quality ESG disclosures, possibly due to competition and “Go Green” initiatives. This emphasizes the link between sustainability practices and investor interest. < IR> promotes transparency and stakeholder engagement by focusing on material issues and future value creation. It helps companies provide a holistic view of their performance instead of separate reports. In terms of challenges and opportunities, the cost of < IR> implementation and the lack of regulation may prevent adoption. However, mandatory climate-related disclosures by the government could push companies towards < IR>. While < IR> adoption is increasing, New Zealand lags behind the regions such as Asia Pacific, Europe and the Middle East. This highlights the need for further encouragement of < IR> practices in New Zealand.

This study contributes to the literature by jointly applying decision usefulness, accountability and legitimacy theory to explain variations in voluntary sustainability disclosure practices. By integrating these perspectives, the study demonstrates that the effectiveness of reporting frameworks depends on whether disclosures reflect substantive organisational commitment or symbolic compliance. The study reveals that the companies adopting < IR> provide more comprehensive and relevant information to the stakeholders. This is because they provide financial and non-financial information as well as information on the future such as strategic goals and risks. This is consistent with the decision usefulness frameworks, which emphasise providing information that will be useful in decision-making. This research also reveals that < IR> enhances the disclosure of information as it forces companies to report material information regarding their operations, such as environmental and social reports. This assists the stakeholders to make better decisions regarding their investments. < IR> also focuses on the long-term value creation, which is consistent with the decision usefulness framework that emphasises providing information that would be useful for making long-term investment decisions. In particular, the study demonstrates that < IR> can be effective in enhancing the quality of information presented to the stakeholders.

Overall, the findings suggest that while voluntary sustainability reporting in New Zealand is evolving in a positive direction, its effectiveness remains constrained by uneven implementation and limited standardisation. The persistence of symbolic reporting practices highlights the need for stronger regulatory guidance, enhanced assurance mechanisms and increased stakeholder scrutiny to encourage more substantive disclosures. Future developments in mandatory sustainability reporting frameworks may help address these limitations by promoting greater consistency, comparability and accountability across firms.

This study is subject to the limitations associated with only analysing the top 50 NZX-listed companies. Also, it is limited to content analysis. Although there has been an increase in the < IR> adoption rate in New Zealand, future research through semi-structured interviews with annual report preparers can be conducted on the challenges that companies have in identifying the potential benefits of integrated reporting to address decision usefulness and accountability issues. Research on stakeholders’ opinions over what is appropriate to include in an integrated report to incorporate both the supply and demand sides of corporate reporting is another prospective avenue for future study. This can include in-depth interviews with management-level executives from the companies, which could be helpful in obtaining the opinions of various stakeholders on integrated and ESG reporting. Research implications emerging from this study therefore also indicate that there is a need for further research on how decision usefulness is operationalised in ESG and integrated reporting, particularly regarding materiality, forward-looking content and financial connectivity. Future studies should examine the effects of standardisation and framework convergence on comparability and information quality across jurisdictions and industries. Furthermore, there is scope to investigate the effectiveness of assurance and enforcement mechanisms in strengthening accountability, including their impact on reporting credibility and stakeholder trust. With regard to the practical implications found in this study, it appears that firms should prioritise the integration of material, forward-looking ESG information with financial reporting to enhance decision usefulness, whereby firms are encouraged to align with recognised reporting standards to improve consistency and comparability of disclosures. In addition, firms should be strengthening internal controls, verification processes and transparency practices to enhance the credibility of reports as well as support substantive accountability to stakeholders. Finally, with regard to policy implications, standard-setters and appropriate government and professional bodies should mandate decision-useful and integrated disclosures, where their policies should require material, forward-looking and financially linked ESG information within coherent integrated reports. In addition, policymakers and regulators should strengthen standardisation and framework alignment that enforces the consistent use of recognised standards to enhance comparability and reduce reporting variability.

In conclusion, it is apparent from the implications emerging from this study that a voluntary reporting framework continues to be problematic despite improved reporting frameworks and guidelines for voluntary sustainability reporting. It is therefore important to observe that this study was initiated before the issue of the Sustainability Disclosure Standards: IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and IFRS S2 Climate-related Disclosures by the International Sustainability Standards Board (ISSB) in June 2023 and the subsequent requirement by reporting entities to apply these standards from 1 January 2024. Crucially, the consolidation of the Value Reporting Foundation into the IFRS Foundation and the establishment of the ISSB signal a shift toward a centralised, investor-oriented global baseline, repositioning integrated reporting as an embedded rather than standalone framework (IFRS, 2022). While the ISSB provides a globally aligned baseline centred on financial materiality, the European Union disclosure requirements, with European Financial Reporting Advisory Group (EFRAG), as the European Commission’s technical advisor, develop the European Sustainability Reporting Standards (ESRS) to operationalise mandatory sustainability reporting under the Corporate Sustainability Reporting Directive (CSRD). These recent mandatory reporting frameworks represent converging regulatory directions that integrate jurisdiction-specific stakeholder accountability with internationally comparable enterprise-value reporting (European Commission, 2022; IFRS, 2023; Mezzanotte, 2024; Nielsen, 2023). This evolving mandated disclosure landscape reflects a transition toward expanded ESG reporting under ESRS, where environmental, economic and societal impacts are explicitly integrated through double materiality, reinforcing a more comprehensive corporate accountability framework (European Commission, 2022; Nielsen, 2023; Mezzanotte, 2024). The outlook for improved sustainability reporting, on the one hand, appears to be addressed by mandatory converging regulatory directions. On the other hand, however, global sustainability reporting convergence is not without its challenges. For instance, the standards can be constrained by divergent materiality approaches, regulatory fragmentation, rising compliance complexity and persistent socio-political differences across jurisdictions and thereby limiting the development of a fully harmonised and decision-useful global sustainability reporting framework. It would therefore be interesting to read future research in this space.