Integrated Reporting and Integrated Thinking in Italian Public Sector Organisations

Purpose - This paper aims to explore the linkages between integrated reporting (IR) and organisations' internal processes, specifically focusing on investigating the internal mechanisms of change that can lead organisations to adopt IR disclosure and how this impacts on integrated thinking internally. Design/methodology/approach - The paper draws upon previous analysis and insights provided in the IR academic literature, as well as analysing several directives, policy and framework pronouncements. The study also draws on the management accounting change literature, using it as a lens to observe early adopters' practice. In addition, it provides detailed case studies considering the internal processes of change in five early adopters of the integrated reporting framework (<IRF>) and whether the adoption leads to internal "integrated thinking". Five Italian public sector organisations are analysed, and the authors make use of official documents, press releases and in-depth semi-structured interviews with the major internal actors. Findings - The research highlights that the processes of change in organisations adopting IR is their adoption of a way of thinking, that is, integrated thinking, as a result of the process of internalisation. Research limitations/implications - Given the short history of IR, this sample is small due to the small number of early adopters. Originality/value - The paper provides academics and policymakers with insights into the process of change to be considered while adopting the <IRF> and responds to calls in the IR literature for further fieldbased studies on IR's impact on internal processes. Also, the paper highlights that the European Directive on the disclosure of non-financial and diversity information (2014/95/EU) has the potential to increase environmental, social and governance disclosures amongst European companies