Natural Capital Disclosure for Integrated Reporting

Abstract

The concept of integrated reporting assumes that the value of the enterprise and its future development is determined not only by financial but also by human, intellectual, social, and natural capital. Traditional financial indicators are not enough to fully assess the company's investment attractiveness and sustainable development. The article aims to structure financial and non-financial information about natural capital, which can be disclosed in integrated reports to obtain future economic and social effects. Natural capital is the used natural resources and ecosystem services that support people's lives and well-being. Unlike financial capital, which can be measured in monetary units, natural capital does not have a standard unit of measurement. It can include elements such as soil quality, availability of water resources, biodiversity, availability of natural landscapes, and much more. Disclosure of information about natural capital in integrated reporting may include the following elements: assessment of natural resources used by the company; the cost of ecosystem services, namely air and water purification measures, control of soil purity, storage of water resources, flood control; assessment of the impact of the company's activities on the environment; minimization of the impact on the environment through the use of advanced technologies in the energy sector and resource-saving technologies; environmental risks and threats. An environmentally-oriented approach in the company's development strategy will have an ecological, social, and economic effect since resource-saving and energy-saving technologies significantly reduce the costs of activities and the cost of products. Companies demonstrating their commitment to sustainable development receive more opportunities to attract investment and participate in government programs and projects.