Integrating intellectual capital disclosure in an integrated thinking perspective

Abstract

Purpose

The purpose of this research is to verify whether the disclosure of intellectual capital (IC) positively affects the level of integration of financial and sustainability information.

Design/methodology/approach

The sample of the analysis relies on European public companies. The data were gathered from Refinitiv, focussing on a multi-year observation from 2013 to 2021 and performing a fixed-effect regression. According to the extant literature, the authors developed the Intellectual Capital Score and the Integrated Thinking and Reporting Score.

Findings

The more disclosure of IC, the more financial and sustainability information is integrated. Indeed, the results confirm that the disclosure of IC enhances the level of integration of financial and sustainability information.

Research limitations/implications

The study enriches academic knowledge about IC in conjunction with integrated reporting (IR) and integrated thinking by highlighting its relevance in the value-creation process and acting as a trait d’union of the disciplines.

Practical implications

For standard setters, the research may be framed to redefine the guidelines explaining the information on IC to be disclosed. Moreover, it could be helpful for practitioners when identifying the IC information that deserves to be disclosed, other than being exploitable to conduct enterprises geared towards adopting integrated reports.

Originality/value

This study answers the call for further research on the relationship between financial information and sustainability information to highlight their joint perspectives quantitatively.