A New Method of Assessing the Quality of Non-Financial Reporting (on the Example of Energy Companies)

Abstract

The aim of the paper is to compare and harmonize Russian and foreign corporate practices of non-financial reporting in order to improve the mechanism of data ranking and generalizing assessment of reports quality on the basis of the experience acquired. Quantitative and qualitative data analysis methods and their synthesis were applied. The average frequency of publications by Russian companies of economic indicators was 56,8%, foreign — 60,8%, environmental indicators — 40,5 and 54,6%, social indicators — 59,7 and 61,7%, respectively. The quality of social and environmental reporting in the Russian practice is lower compared to economic indicators reporting. We analyze 58 reports out of 250 from Platts Top 250 2017 list, we do not impose limits but adhere to the following: the reports should appear in the GRI Database, be prepared in accordance with GRI’s G4 Reporting Guidelines and should be in the English or Russian languages. We tested a new methodology for assessing the quality of Russian non-financial reporting, analyzed representation of key performance indicators and compared the structure of Russian and foreign reports. The authors’ modification is connected with the proposal of an in-depth historical data analysis and with the inclusion of a quantitative assessment of indicators representation from the GRI’s G4 guidelines directly in the qualitative assessment. The increase in the quality of non-financial disclosure by the firm is able to increase the loyalty of consumers and investors to it, which will result in its revenues increase relative to the whole industry and the attraction of long-term borrowed funds, respectively.