Multiple Capitals Disclosure in European Companies’ Integrated Reports: The Role of Organisational Complexity

Figures & data

Table 1. Multiple Capitals Disclosure checklist.

S/N	Type of Capital		Disclosure Items
1.	Natural Capital	1	CO2 emissions
		2	Energy consumption
		3	Amount of waste disposed
		4	Environmental accidents
		5	Recycled waste
		6	Investment in environmental protection
		7	Biodiversity and ecosystem
2.	Human Capital	8	Number of employees
		9	Employee diversity
		10	Investment in training
		11	Number of employees in corporate e-learning
		12	Average employee age
		13	Training days per employee
		14	Employee wage ratio
		15	Employee survey results
		16	Injuries per million working hours
		17	Rate of absenteeism
		18	Severance rate
3.	Social Capital	19	Great-Place-Work for employees ranking
		20	Number of volunteers
		21	Claims/lawsuits
		22	Involvement in social actions
		23	Involvement in cultural projects
		24	Customer satisfaction index
		25	Investment in customer relationship
		26	Investment in other philanthropic activities
4.	Intellectual Capital	27	Number of patent applications filed
		28	Expenditure on organisational change
		29	Money spent on research and development
		30	Brand awareness
		31	Number of new products developed
		32	Employee skills and knowledge
		33	Expenditure on software development for internal systems
		34	Sales generated by R & D-driven products
5.	Manufactured Capital	35	Production of goods and services
		36	Information on buildings
		37	Information on property
		38	Information on equipment
		39	information on infrastructure (roads, bridges, waste equipment etc.)
6.	Financial capital	40	information on debt capital
		41	information on equity share capital
		42	information on government grants
		43	Information on investments

Table 2. definition and measurement of variables.

Variable	Definition	Measurement	Nature
MUL_CAP	Multiple Capitals Disclosure	Disclosure index	Dependent Variable
IND_COMP	Industrial complexity	Sum of squares of product segment sales divided by total firm sales	Independent Variable
GEO_COMP	Geographical complexity	Sum of squares of geographical (international) segment sales divided by total firm sales	Independent Variable
F_SIZ	Firm size	Natural logarithm of total assets	Control Variable
PROF	Profitability	Return on Assets, i.e. Earnings Before Interest and Tax (EBIT) divided by total assets	Control Variable
B_SIZ	Board size	Number of directors on the board	Control Variable
B_­IND	Board independence	Ratio of non-executive directors to board size	Control Variable
GEN_DIV	Gender Diversity	Ratio of female directors to board size	Control Variable
DUAL	Duality	Dummy variable equals 1 if there is CEO and Chairman role separation and 0 otherwise	Control Variable
∅0 - ∅5	Parameters to be estimated.

Table 3. Descriptive statistics.

Variables	Mean	SD	Minimum	Maximum	Skewness	Kurtosis
MUL_CAP	0.727	0.123	0.432	0.955	−0.089	2.386
IND_COMP	0.447	0.209	0.115	0.872	0.064	2.064
GEO_COMP	0.316	0.198	0.027	0.982	1.014	3.046
F_SIZ	7.425	0.548	6.178	8.470	0.300	2.348
PROF	0.060	0.047	−0.076	0.161	0.098	2.701
B_SIZ	11	3.189	8	20	1.306	3.423
B_IND	0.622	0.059	0.461	0.727	−0.113	2.146
GEN_IND	0.287	0.123	0.137	0.567	0.772	2.493
DUAL	0.639	0.482	0	1	−0.581	1.337
n	567	567	567	567	567	567

Note: SD is Standard Deviation.

Figure 1. Yearly change in multiple capitals disclosures.

Table 4. Correlation matrix.

Variable	IND_COMP	GEO_COMP	F_SIZ	PROF	B_SIZ	B_IND	GEN_DIV	DUAL	VIF
IND_COMP	1.000								1.13
GEO_COMP	0.144	1.000							1.04
F_SIZ	−0.240	−0.088	1.000
PROF	−0.106	−0.076	−0.101	1.000					1.04
B_SIZ	−0.223	0.257	0.210	−0.317	1.000
B_IND	−0.290	−0.004	0.170	−0.021	0.156	1.000
GEN_DIV	−0.157	−0.058	0.023	−0.217	0.283	0.189	1.000		1.07
DUAL	0.239	0.187	−0.025	−0.079	−0.085	−0.145	0.168	1.000	1.17

Table 5. OLS, Fixed Effect and Random Effect regression results for predictors in the same period.

Variable	OLS Coef. (p-value)	Fixed effect Coef. (p-value)	Random effect Coef. (p-value)
Constant	0.561***(0.000)	0.561***(0.000)	0.581***(0.000)
IND_COMP	0.014***(0.000)	0.014***(0.071)	0.001***(0.001)
GEO_COMP	0.001(0.180)	0.001*(0.071)	0.001(0.989)
F_SIZ	−0.047***(0.000)	−0.047***(0.000)	−0.027(0.132)
PROF	0.053(0.739)	0.053(0.732)	−0.073(0.379)
B_SIZ	0.020***(0.000)	0.020**(0.000)	0.008***(0.007)
B_IND	0.100(0.320)	0.100(0.223)	0.214**(0.018)
GEN_DIV	0.346***(0.000)	0.348***(0.000)	0.128***(0.000)
DUAL	0.065***(0.000)	0.065***(0.000)	0.029***(0.000)
R2	0.6679	0.6679	0.6057
F/Wald chi2	78.45	685.30	64.28
Prob.	0.000	0.000	0.000

Note: *** Significant at the 1% level; ** Significant at the 5% level and *Significant at the 10% level.

Table 6. Panel regression results for the first lag of organisational complexity dimensions with robust standard errors.

Variable	Coefficient	Robust Standard Error	z. Value	Prob.
Constant	0.551	0.124	4.45	0.000***
IND_COMP (L1)	0.002	0.002	1.07	0.286
GEO_COMP (L1)	0.003	0.001	0.27	0.786
F_SIZ	−0.010	0.016	−0.63	0.527
PROF	−0.010	0.090	−1.11	0.268
B_SIZ	0.009	0.004	2.47	0.014**
B_IND	0.133	0.090	1.47	0.140
GEN_DIV	0.137	0.032	4.35	0.000***
DUAL	0.028	0.017	1.65	0.098*
R2 (overall)	0.6902
Wald chi (2)	53.81
Prob.	0.000***

Note: *** Significant at the 1% level; ** Significant at the 5% level and *Significant at the 10% level; IND_COMP (L1) is prior year industrial complexity; GEO_COMP (L1) prior year geographical complexity.

Table 7. Analysis of individual capitals disclosures.

Variable	Natural Capital	Manufactured Capital	Human Capital	Intellectual Capital	Social Capital	Financial Capital
Constant	.982 (.000)***	.941 (.000)***	.598 (.000)***	.557 (.029)**	.133 (.430)	1.025 (.000)***
IND_COMP	.013 (.000)***	-.001 (.647)	-.004 (.050)**	.002 (.727)	-.002 (.378)	.009 (.015)**
GEO_COMP	−.002 (.057)*	−.001 (.714)	−0.001 (.821)	.014 (.000)***	.003 (.014)**	.009 (.000)***
F_SIZ	−.114 (.000)***	.008 (.626)	−.149 (.000)***	−.032 (.279)	−.017 (.429)	−.042 (.129)
PROF	.016 (.368)	-.177 (.502)	.611 (.050)**	.599 (.100)	.501 (.039)**	.401 (.191)
B_SIZ	0.007	-.004	.027	.041	.024	.019
	(.003)***	(.376)	(.000)***	(.000)***	(.000)***	(.000)***
B_IND	.748 (.000)***	−0.008 (.965)	.480 (.053)**	-.780 (.004)***	.409 (.027)**	-.380 (.073)*
GEN_DIV	.047 (.409)	.220 (.004)***	.490 (.000)***	.312 (.011)**	.296 (.001)***	.189 (.102)
DUAL	.037 (.092)*	.022 (.380)	.090 (.000)***	.054 (.071)*	.011 (.674)	.032 (.366)
R2 (overall)	.4646	.0859	.4727	.2253	.2861	.1924
F./Wald chi2	20.40 (.000)***	2.63 (.010)**	28.20 (.000)***	9.98 (.000)***	7.57 (.000)***	6.98 (.000)***
OLS/FE/RE	OLS	FE	RE	OLS	OLS	RE

Note: *** Significant at the 1% level; ** Significant at the 5% level and *Significant at the 10% level.