DEVELOPMENT OF CONCEPTUAL FOUNDATIONS OF FINANCIAL REPORTING IN THE CONTEXT OF SUSTAINABLE DEVELOPMENT

Abstract

Modern global challenges, including climate change, social inequality, and depletion of natural resources, necessitate that companies adapt their business processes to the principles of sustainable development. This requires a revision of traditional approaches to financial reporting, which predominantly focuses on financial indicators and overlooks the impact of business on society and the environment. Revising the conceptual foundations of financial reporting is crucial as it enables a holistic approach to assessing business activities, incorporating economic, social, and environmental aspects. This study employs methods of theoretical analysis, comparison, and synthesis of scientific approaches and reporting standards, particularly the Global Reporting Initiative (GRI) and Integrated Reporting (IR). Key approaches to sustainable reporting are considered, which include comprehensive data on a company's activities and its impact on the external environment, providing stakeholders with complete and reliable information. The analysis shows that the implementation of integrated reporting and GRI standards allows companies to increase transparency, investor trust, and competitiveness. The integration of environmental and social indicators into financial reporting also enhances the company’s reputation, ensures compliance with international standards, and strengthens company readiness for environmental and social challenges. GRI standards provide a framework for structured reporting that covers key aspects of sustainable development and ensures data comparability at the international level. Further development of the conceptual foundations of financial reporting to support sustainable development is a crucial direction for Ukrainian enterprises, especially in the context of European integration. Adapting international standards, such as GRI and integrated reporting, to national conditions can significantly enhance business competitiveness in international markets, while also laying the groundwork for more sustainable economic development. Prospective tasks include improving the legislative framework to support mandatory sustainability reporting and raising awareness among companies about the strategic benefits of integrating sustainable practices into reporting.