Integrated reporting, non financial information and Financial Performance
The focus of annual financial reporting is still what information to include in order to satisfy the stakeholders as well as investors. As time passes the stakeholders demand more than just financial information. Some corporations already include non financial information in a standalone sustainabilityor Corporate Sustainability Report (CSR) The new reporting system which represents all information, financial and non financial, combined into one single report, is called an Integrated Report (IR) It can help companies to explain their value creation more effectively to the stakeholders and capital markets. As the Global Reporting Initiative (GRI) guidelines envision that economic, environmental and social performance shall be as widely accepted and standardized as financial reporting (Larsson and Ljungdahl, 2008, p.63) It is crucial to know and understand, especially for those who are interested in adopting the IR, what the effect of the non financial part will be on the financial performance (FP) Therefore, this study was focused upon whether the publishing of an IR has any effect on the Financial Performance (FP) and if there is any influence of the Environmental, Social Performance (ESP) the so called non financial information (NFI) on the FP. The empirical results show that the publishing of the Integrated Annual Report (IAR) and the Environmental and Social Performance (ESP) is also negatively related with the Financial Performance (FP) in the accounting based model. The same results were found when using the market based model.