Research on the promised benefits of integrated reporting for companies in the energy sector

The global energy sector is facing a major challenge: adapting to the impacts of climate change while meeting society's growing energy needs at reasonable prices. Energy companies need to be aware of these challenges, identify risks and opportunities accurately and in a timely manner, and create a sustainable corporate roadmap. This study analyses the potential benefits of integrated reporting for energy companies, which offers a new business model based on integrated thinking and value creation. The impact of integrated reporting on a company's market value is analyzed using an econometric panel data methodology. The sample consists of twelve energy companies listed on Borsa İstanbul for the period 2014-2023. The regression equation includes book value and net profit as continuous explanatory variables and integrated reporting, sustainability report, corporate governance index and sustainability index as dummy variables. To account for heterogeneity at the company level, the fixed effects model, the random-effects model and the pooled data model are statistically compared, with the fixed effects model being chosen. The latter model shows that book value is the most influential factor, while the corporate governance index is also positive and significant. The publication of a sustainability report has a nonsignificant but positive effect, while the inclusion of the variables in the sustainability index, net profit, and preparation of an integrated report have negative but non-significant effects. These results suggest that market participants value good corporate governance as much as a good financial position reflected in book value while signaling the financial potential of focusing on the benefits of integrated thinking.