Development of the Narrative Component of Integrated Reporting

Oksana Nesterenko and Nataliia Kashchena
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Oksana Nesterenko: V.N. Karazin Kharkiv National University, Ukraine
Nataliia Kashchena: State Biotechnological University, Ukraine

Oblik i finansi, 2026, issue 2, 63-71

Abstract: Strengthening regulatory requirements for corporate transparency, the implementation of the CSRD Directive, and European integration are transforming reporting practices, significantly increasing the role of the narrative component of integrated reporting as a tool for strategic communication with stakeholders. Traditional financial reporting is increasingly unable to meet the information needs of investors, regulators, and society, who seek a holistic view of the strategic prospects, risks, and socio-environmental impacts of business entities. Instead, the narrative that allows for explaining the cause-and-effect relationships between events, conveying the strategic context, and building stakeholder trust – functions that no numerical indicator can perform. The article aims to substantiate the theoretical and methodological principles for the formation of the narrative component of integrated reporting and to identify directions for its development in the context of the transformation of corporate reporting practices and the strengthening of regulatory requirements for the disclosure of non-financial information. The research methodology includes abstract-logical, monographic, comparative methods, a systematic approach, analysis, and synthesis. The article presents a conceptual model for the formation of the narrative component of integrated reporting, which explains the logic of transforming disparate quantitative accounting data into a meaningful information base for a business entity capable of responding to stakeholders' requests in both retrospective and prospective dimensions. Such a model ensures methodological unity among financial, environmental, social, and strategic accounting as subsystems for the formation of narrative disclosures, increases the reliability and verifiability of the report's text content, and creates institutional prerequisites for the implementation of automated solutions based on digital technologies. Enterprises can use the results of this study to improve the quality of their integrated reporting, in particular in terms of standardization and verification of text disclosures in accordance with the requirements of ESRS and CSRD, as well as to form effective mechanisms for interaction between the accounting system and the process of preparing an integrated report in the conditions of digitalization.

Keywords: integrated reporting; narrative component; non-financial reporting; accounting system; sustainability reporting; CSRD; ESRS; stakeholders; value creation; digitalization (search for similar items in EconPapers)
JEL-codes: M14 M41 Q01 (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:iaf:journl:y:2026:i:2:p:63-71

DOI: 10.33146/2518-1181-2026-2(112)-63-71

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