Integrating Reporting in SMEs. Issues and perspectives from a pioneering experience in Italy

Within the vast literature on non-financial and integrated reporting up to now very few studies have been addressed to SMEs. Accordingly, the work discusses the most critical aspects faced by SMEs in releasing an integrated report and adapting the Integrated Reporting (IR) principles to their needs and features. Adopting a deductive and inductive approach, the first part of the paper presents a literature review while the second one is empirically constructed and follows the action research approach in analysing a single case-study relative to an Italian company - Costa Edutainment Spa - belonging to the NIBR (Italian Network Business Reporting) working group which has been involved in the drafting process of the Guidance for IR in SMEs and has released its pioneering integrated report in 2014. Results emphasize the main criticalities faced by an SME in the IR process and the need for simplifying the main concepts (such us materiality, integrated thinking and connectivity) and understanding the benefits deriving from the adoption of the integrated report. The work has both theoretical and practical implications. On the one hand, it contributes to nourish the debate on the benefits and critical issues relative to the diffusion of IR among SMEs in a research field which has not been adequately investigated. On the other hand, it contributes to support the diffusion of the IR among SMEs, practitioners, consultants and chartered accountants and to sensitize entrepreneurs by emphasizing that a possible approach toward “the IR journey” should follow an evolutionary path which drives the evolution of the entrepreneurial and organizational culture.