Algorithms for Incorporating Sustainable Development Indicators into Integrated Reporting

Abstract

The purpose of this article is to address the methodological challenge of reliably developing indicators for integrated reporting, taking into account the need to present a comprehensive picture of the process of value creation by a business entity in the short and long term while adhering to the fundamental goals of sustainable development. An original classification of quantitative, qualitative, and financial performance indicators of a business entity subject to disclosure in the company’s integrated reporting has been developed, organized by sections of the integrated report. A unified set of indicators has been compiled by sections of the integrated report, with indicators categorized by type (e.g., quantitative, qualitative, and financial), a description of the information they characterize, and an identification of the Sustainable Development Goal (SDG) that the indicator represents to determine the enterprise’s contribution to achieving it. An algorithm has been developed to determine the feasibility of calculating and including an indicator in the integrated report depending on its impact on decisions made by interested users, the complexity of the calculation, and the mandatory nature of disclosure in accordance with GRI requirements. The developed methodological toolkit eliminates uncertainty regarding the preparation of integrated reports by business entities, establishes a theoretical foundation for assessing the appropriateness of disclosing indicators in an integrated report, and enhances the reliability of the integrated report.