Integrated Reporting quality and negative media coverage: Empirical evidence

This study investigates the influence of negative media coverage around environmental, social and governance (ESG) issues on the quality of Integrated Reporting (IR), drawing upon legitimacy, media agenda setting and stakeholder theories. We examine the top 100 South African listed companies in the 2013-2018 timeframe. Our results reveal that IR quality is positively related to ESG negative media coverage levels, suggesting that companies adapt IR disclosure to respond to pressures – in terms of increased scrutiny and potential reputational damages – deriving from the media. This relationship is weaker for companies markedly committed to ESG accountability and stakeholder engagement. Our findings extend previous knowledge on the determinants of IR quality in a mandatory IR context and the effects of ESG media coverage on reporting. Moreover, we add fresh evidence to the continuing debate on the role of media coverage in capital markets.