Analyzing the Influence of Non-Financial Performance Indicators on Integrated Financial Reporting Practices

Posted: Feb 05, 2023

• Grace Ramirez
• Grace Thompson
• Grace Wilson

Abstract

This research investigates the transformative impact of non-financial performance indicators on integrated financial reporting practices within contemporary corporate environments. Traditional financial reporting has increasingly been recognized as insufficient for capturing the comprehensive value creation of modern organizations, leading to the emergence of integrated reporting frameworks that combine financial, environmental, social, and governance metrics. Our study employs a novel methodological approach combining natural language processing of corporate reports with structural equation modeling to analyze the complex relationships between non-financial indicators and reporting quality across 500 global corporations from 2018 to 2023. We introduce the concept of 'metric integration density' as a quantitative measure of how deeply non-financial indicators are embedded within financial narratives, revealing that organizations with higher integration density demonstrate 47