Brigitte de Graaff, an assistant professor and director of the CMA® (Certified Management Accountant) program at Vrije Universiteit (VU) Amsterdam in the Netherlands, president-elect of the IMA® (Institute of Management Accountants) Amsterdam-Netherlands Chapter, chair emeritus of IMA’s Sustainable Business Management Global Task Force, and a member of the IMA Global Board of Directors, wrote her doctoral dissertation on integrated reporting, beginning her research just after the International Integrated Reporting Council (IIRC) published the final version of its International Integrated Reporting Framework (commonly referred to as the <IR> Framework). The IIRC defines the aims of integrated reporting as:


  • Improving the quality of information available to providers of financial capital to enable a more efficient and productive allocation of capital;
  • Promoting a more cohesive and efficient approach to corporate reporting that draws on different reporting strands and communicates the full range of factors materially affecting the ability of an organization to create value over time;
  • Enhancing accountability and stewardship for the broad base of capitals—financial, manufactured, intellectual, human, social and relationship, and natural—and promoting understanding of their interdependencies; and
  • Supporting integrated thinking, decision making, and actions that focus on the creation of value over the short, medium, and long term.



Brigitte de Graaff’s doctoral dissertation was published as a book, The (R)evolution of Integrated Reporting.



The <IR> Framework defines integrated thinking as “the active consideration by an organization of the relationships between its various operating and functional units and the capitals that the organization uses or affects” that “leads to integrated decision-making and actions that consider the creation, preservation or erosion of value over the short, medium, and long term.”


As part of de Graaff’s research for her doctoral dissertation at VU, she surveyed Dutch supervisory board members, asking whether their organizations were already implementing integrated reporting and, if so, whether the hoped-for benefits materialized, as well as what they’re hearing and communicating about the concept of integrated thinking both inside and outside their organization. She then wrote multiple case studies of four Dutch companies that had implemented integrated reporting, noting in particular how it impacted their performance management and management control systems.


“We wanted to see if integrated reporting brings on any changes to [organizations’] performance management or management control system, and if it does, we consider that a lens or proxy for integrated thinking—if you’re considering integrated reporting aspects in your strategy, performance measurement and evaluation, communications, etc., then probably there is some level of integrated thinking happening in the organization,” de Graaff says. “We [studied] three different building blocks—strategy, governance, and performance management—and we did see that companies [enacted] changes to those due to <IR> implementation, some to a higher degree, some to a somewhat lower degree, but organizations definitely changed their management control systems due to integrated reporting.”


After companies started integrated reporting, executives became aware of the need to report on various metrics related to sustainability and environmental, social, and governance (ESG) factors. By extension, most realized that they needed to make sure that the data included in integrated reports is also incorporated in the organization’s performance management system and strategy.



Brigitte de Graaff, Ph.D., CMA, CSCA


“Integrated reporting raised more awareness within the organizations that we studied, which were already aware of multistakeholder perspectives, but integrated thinking is basically making sure that different aspects that are relevant for the value-creation capabilities of the organization over time are always considered in your day-to-day operations, so it should be in your strategy—you shouldn’t have a separate strategy for sustainability, but your strategy should be sustainable,” de Graaff says. “For sustainability and governance, it needs to be very clear who’s responsible for what, and ownership must be felt for those different concepts or factors.”


It’s important to measure certain sustainability and ESG factors the same way throughout your organization. ESG objectives and benchmarks informed by integrated thinking should be part of organizations’ performance evaluation, investment decision making, budgeting, short-term value-creation initiatives, long-term strategic planning, etc., according to de Graaff.


“The value-creation concept is taken more broadly, so officially integrated reporting has always been focused on the providers of financial capital,” she says. “In that sense, it always seems like financial capital remains a little bit more important than the other types of capital—however, financial and nonfinancial value creation can’t be seen separately.”


Integrated thinking illustrates that prioritizing nonfinancial value creation by setting ESG objectives and benchmarks helps organizations to become more sustainable over the long term. That means maintaining a focus on multiple stakeholders’ wants and needs, not just shareholders’ concerns.


“If you’re creating value for shareholders but you’re eroding value on all the other capitals, that means you aren’t creating value over the long run and probably aren’t being a very sustainable company that still has a license to operate in 10 years or so,” de Graaff says.




Integrated reporting that includes ESG factors can be perceived in either a positive or negative way, so it doesn’t necessarily say anything about an organization’s value-creating capabilities. Leaders often consider ESG factors to be relevant for long-term value creation.


“The easiest factors for companies to report are usually related to the environment, because we all know that scarce resources such as water are something that you need to be able to deal with in your organization in order to be able to be a sustainable organization because if you are operating in a water-scarce environment, this is probably going to be more extreme over the next 10-plus years,” de Graaff says. “You need to be able to deal with [climate risk] in order to continue to be able to create both the financial value that you’ve been creating over time and nonfinancial value creation, which needs to be considered in order to be a sustainable organization—I hate the distinction between financials and nonfinancials because I think everything ultimately can be seen as having a financial impact.”



Brigitte de Graaff participated in a symposium about integrated reporting and integrated thinking before successfully defending her Ph.D. dissertation about integrated reporting on July 7, 2023, at the Vrije Universiteit Amsterdam.



For companies with leaders considering implementing integrated reporting and integrated thinking, it requires being more process-minded, de Graaff says. Those new procedures aren’t necessarily based on a reporting framework of guidelines or standards such as those being developed by the U.S. Securities & Exchange Commission, International Sustainability Standards Board, or European Financial Reporting Advisory Group in the European Union, which outlines mandatory rules and regulations for what needs to be reported externally.


“In simple terms, integrated reporting is a way of making sure that you collect the information that you need within your organization to enable decision making based on the complete information that is required for long-term value creation,” de Graaff says.


Integrated reporting that tracks climate-risk factors can also bolster organizations’ risk management. Integrated thinking takes into consideration both transition risks and acute physical risks stemming from the long-term climate shifts leading to increasing frequency and severity of extreme weather events such as heat waves, droughts, and floods. It’s vital to calculate various potential scenarios that could impact your business, including supply-chain disruptions, that may be precipitated by climate change.


“Climate change can definitely be a financial risk, and the same goes for changes in the perception of society of what should be acceptable or not on how you treat your employees or what companies and suppliers you’re working with, so you have to evaluate your whole value chain. You may be even held responsible for these ESG factors,” de Graaff says.

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