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Subject. The article considers approaches to determining information that is material for corporate reporting and analyses the way they affect the usefulness of the information presented to stakeholders and required for decision making. The choice of a particular approach determines the identification and formulation of material topics, information sources, and the target audience. Users need to understand the principal approach of the company to determining material information in corporate reporting in order to avoid controversies and unreasonable decisions. Objectives. The purpose of our study was to analyse approaches to defining material information for non-financial reporting and assess their impact on the usefulness of the information for stakeholders, primarily for investors. Research methods. The research involved using methods of comparative, logical, and financial analysis. The materials analysed were standards of financial and non-financial reporting, including frameworks and guidelines. The analysis was performed in order to define the concept of material information and requirements for it as well as suggested methods of identification of material topics and parameters to be presented in corporate reports of organisations. The following standards were analysed: GRI standards; standards by the International Sustainability Standards Board (ISSB); standards of the Sustainability Accounting Standards Board (SASB); Corporate Sustainability Reporting Directive (CSRD), and recommendations on disclosure of financial consequences of climate change of the Task Force on Climate-related Financial Disclosures (TCFD). The analysis of information disclosure practices was performed based on the sustainability statements of leading Russian companies operating in oil and gas industry and in steel industry for 2019-2021. We also used data from ESG ratings and rankings of Russian rating agencies. Results and discussion. The results of our study showed that while basic approaches to defining materiality suggested by leading international initiatives in corporate reporting have a lot in common, there are still crucial differences. The main difference is the focus on either the impact of external factors on the company (financial materiality) or the impact of the company on the society and environment (impact materiality). The understanding of these differences can help stakeholders to integrate the ESG information in the decision making process and use it to substantiate the decisions made. The problems revealed by the study, as well as the dynamic nature of the assessment of materiality of ESG data make it difficult to regulate the process of non-financial disclosure as compared to the disclosure of financial data. At the same time, the existing methods of determining material ESG information, taking into account industry specifics and based on the analysis of the organisation’s activities, its context, and requirements of the stakeholders, make it possible to find a practical solution to the problem. Conclusions. The conclusions and results of the study can be used to develop recommendations on public non-financial reporting for Russian companies taking into account the requirements of stakeholders. |
