Integrated reporting and SDGs in the public sector: Insights from a small Italian municipality

This study explores the implementation of the integrated reporting (IR) framework in a small Italian coastal municipality, analyzing the challenges and opportunities encountered during the process. Designed to provide a comprehensive view of value creation in the short, medium, and long term, the IR framework serves as a strategic tool for integrating financial and non-financial indicators, thereby contributing to the alignment of municipal policies with the Sustainable Development Goals (SDGs). The study also highlights how the IR framework can address the separation of ownership and control in the public sector by increasing transparency and accountability in the management of public resources. The study adopts a qualitative, multi-method approach, combining multiple data sources: 1) document analysis of municipal resolutions, deliberations, and strategic plans; 2) semi-structured interviews with various stakeholders; and 3) participant observation during working sessions and stakeholder meetings. Data analysis was conducted using a triangulation approach, cross-referencing different sources to enhance the validity and reliability of the findings. The research highlights an initial lack of awareness of IR and the SDGs, underscoring the need for training. It also reveals a stronger understanding of financial and manufactured capital compared to intangible capital, alongside a limited perception of the municipality’s role in managing natural capital. IR emerges as a valuable tool for engaging employees and stakeholders in defining key parameters for evaluating outcomes in relation to the SDGs. Unlike previous studies focused primarily on the private sector, this research demonstrates that the IR framework can be effectively adapted to the public sector, providing a holistic view of value creation that goes beyond financial performance to include social and environmental impacts. Although limited to a single case, this study provides insights into the feasibility of IR in the municipal context, emphasizing the critical role of training and stakeholder engagement in fostering public value (PV) creation aligned with the SDGs.