Non-financial Reporting Challenges in Monitoring SDG`s Achievement: Investment Aspects for Transition Economy
Purpose: The purpose of the article is to reveal and deepen the investment aspects of the methodology for monitoring the achievement of Sustainable Development Goals (SDG`s) in transition countries. Design/Methodology/Approach: The methodological approach of the paper is based on comparative analysis of core investment indicators proposed by main sustainable reporting initiatives. Conducted analysis helped to identify significant differences in methodological recommendations complicating the process of data comparability for VNR`s compiling purposes. Findings: As a part of SDG`s monitoring process reporting challenges include: the use of so-called “SDG-washing” practices in non-financial reporting; selective presentation of facts through the use of “Cherry-picking” practice in non-financial reporting; the difficulty in measuring progress of the entity's contribution to the achievement of the SDGs on the basis of available indicators in the non-financial reporting; a weak corporate governance culture for reporting as in transition economies; the necessity to develop approaches to assess the materiality of information received for investment purposes. Practical Implications: Sustainability investment indicators in non-financial reporting requirements today do not reflect investing in cost-effectiveness in the context of evaluating the progress of the SDG`s implementation. In order to reveal the entity's attempts to use “SDG-washing” and “Cherry-picking” practices is proposed to include an investment priority ratio to the list of economic indicators. Originality/Value: The paper contains a methodology for a new non-financial reporting indicator allowing to evaluate the purpose of enterpeise`s capital investments policy.