IC statement vs environmental and social reports. An empirical analysis of their convergences in the Italian context
| Pages | 441-464 |
| Date | 01 September 2005 |
| DOI | https://doi.org/10.1108/14691930510611166 |
| Published date | 01 September 2005 |
| Author | Michela Cordazzo |
| Subject Matter | Accounting & finance,HR & organizational behaviour,Information & knowledge management |
IC statement vs environmental
and social reports
An empirical analysis of their convergences in
the Italian context
Michela Cordazzo
Faculty of Economics, University of Ferrara, Ferrara, Italy
Abstract
Purpose – To verify if the intellectual capital (IC) statement has some points of contact with
environmental and social reports, or whether it can be considered as a brand-new reporting model,
which is completely detached and independent by the other two.
Design/methodology/approach – An empirical analysis of environmental and social reports in
Italy, and in particular an analysis whether some elements of IC statement are present in the
environmental and social reports.
Findings – A high level of dispersion in the information composing the environmental and social
reports; a significant overlapping of data between these two sets of documents; and a quite relevant set
of information in common between the environmental and social reports and the IC statement.
Research limitations/implications – The environmental and social reports analysed could be not
an exhaustive list, because Italian companies produce such reports on a voluntary basis and for
internal purposes.
Practical implications – The lack of uniformity in and between environmental and social reports,
and the correspondence between many elements of those documents and the IC statement information
seem to suggest that the environmental and social reports could probably serve as a support for the
development of IC statement in the Italian context in the near future.
Originality/value – Looks at the growing awareness of the multi-dimensional nature of firm
performance and the inadequacy of traditional accounting systems to account for issues posed by
economic and technological environments.
Keywords Disclosure, Financial reporting,Intellectual capital, Reports
Paper type Research paper
1. Introduction
In recent years one of the main features of accounting and management studies has
been the widespread search for appropriate measures in order to capture firm value
and its new sources. There is indeed a vast agreement in the scholarly and professional
community that the value of a firm performance is not adequately portrayed by the
traditional financial measurement tools, which appear to many as incapable of
representing the multidimensional nature of that performance.
On the other hand, it is more and more recognised that the process of value creation
in companies is also changing. New macro and micro events such as the
The Emerald Research Register for this journal is available at The current issue and full text archive of this journal is available at
www.emeraldinsight.com/researchregister www.emeraldinsight.com/1469-1930.htm
This study is part of the PRISM Research Project funded by the European Commission’s
Information Society Technologies Directorate General. The author wishes to thank Professor
Stefano Zambon for his suggestions and assistance, as well as the anonymous reviewers for their
comments. The responsibility for the contents of the paper remains entirely with the author.
An empirical
analysis
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Journal of Intellectual Capital
Vol. 6 No. 3, 2005
pp. 441-464
qEmerald Group Publishing Limited
1469-1930
DOI 10.1108/14691930510611166
dematerialization of economic activity, the knowledge society, the service-based
economy, the technological advances have profoundly undermined the bases on which
the traditional systems of value calculation rest. In particular, these systems seem to be
highly inadequate when addressing the valuation of intangibles. As well known, some
of them find a representation in the financial statements (purchased brands, intellectual
property, consolidation goodwill), but the large majority of them remain outside the
boundaries of a proper accounting detection.
On the basis of the joint consideration of the above two phenomena – the awareness
of the multidimensional nature of firm performance and the inadequacy of traditional
accounting systems – a new concept has been recently proposed aiming to cope with
the issues posed by the different economic and technological environment. The concept
is that of intellectual capital (IC), which has started to receive a growing interna tional
attention in these very years.
From a conceptual and scholarly point of view, already many interpretations and
connotations of IC have been pointed out in the literature, while at a corporate level an
increasing number of firms are supplying information on IC and its components. Some
companies prepare already an IC report, which is autonomous and separate from the
traditional annual financial report.The interest in the IC is also rising at an institutional
level, as it is witnessed by recent initiatives of the EU Commission (Eustace, 2000;
Zambon, 2003) and the Danish Agency for Trade and Industry (1998, 2001).
However, one delicate point – which could condition the future spreading of the IC
report among European companies – is the degree of “newness” of su ch reports, as
well as the magnitude of the effort to produce them. From the first point of view, it is
well known that other innovative forms of corporate reporting, such as the
environmental and social reports, have started to be adopted by European companies
in the recent past, also as a consequence of statutory or professional requirements. It is
therefore reasonable to raise the question whether with IC statement we are facing a
complete new reporting model, which is different in conceptual terms from the
environmental and social reports that are more established and recognised in the
business, institutional, and academic context. In this respect, can the social and
environmental reports be seen as expressions of a wider and growing concern with IC
“ingredients”? In other words, could the social and environmental perform ance of a
company be also interpreted as part of the wider IC performance of an organisation?
A second element, which may limit the adoption of IC statement, is the associated
technical need for accounting for new information and phenomena that are genera lly
disregarded by the information systems of companies. In this respect, if some
convergences could exist between the information required for the production of IC
statement and social and environmental reports, then some form of “informational
economies of scope” could be envisaged. The underlying assumption here is that these
common elements from an information point of view, if existent, could favour the
spreading of those innovative forms of company reporting.
The aim of the paper is to explore empirically these issues, and in particular
whether IC statement presents some elements of commonality in conceptual and
informational terms with the social and environmental reports. To this end, a detailed
content analysis of the social and environmental reports published by companies has
been carried out. This analysis has been primarily referred to the Italian context.
The work will unfold as follows. In the next section a short outline of the aims and
main contents of IC statement will be made. After an introduction to the regulatory
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