Toward an Integrated Intellectual Capital and Sustainability Reporting: Made in Italy

The research about Traditional Financial Reporting Framework (TFRF) demonstrates a decline in the fullness of information included in Annual Report. This is a consequence of the limits that characterize TFRF: the possibility of improper uses of normative or illegal practices; the reporting limitation to financial and economic performances, and the myopia about competitive performance, opportunities and risks.
Awareness of these limitations has intensified the search for a new accountability framework to collect and report complementary and extended information. This paper reviews Intellectual Capital Reporting and Sustainability Reporting in order to propose the creation of an Integrated Reporting Framework (IRF). The IRF is the opportunity to monitor the joining of the Corporate Responsibility (CR) and the Intellectual Capital (IC) in a unique strategy that creates a virtuous circle of value creation in accordance with relations between the Corporate Responsibility, the Intellectual Capital and the Financial Performance.
This article presents a quantitative analysis of the voluntary development of IRF in 70 Italian firms that published a Sustainability Report in 2005. In particular the focus is on the main characteristics of the process of consolidating IC reporting with CR reports. The results of the analysis demonstrate that an IRF - which reports both CR and IC performances - is expected to be a useful tool and is on the Italian firms' agenda, but managers are facing many difficulties in grasping the integration process.


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