Annual Report and Sustainability Report: A Theoretical proposal for an Integrated Reporting.

The objective of the article is to propose a theorization regarding ethical reporting and the proposal – particularly relevant for listed companies – consists in reporting to investors and to stakeholders the ESG performances measured through an accounting model in which, on the one hand, sustainability reporting can acquire from the annual report the accounting information necessary for the drafting of its documents and, on the other hand, it is able to return the environmental, social and governance performances in the annual report, thus influencing the accounting results contained in the document. The novelty of the model derives from the fact that in current documents and in those relating to the ethical reporting model (such as, for example, the social report, the environmental report, the sustainability report, etc.) the information flow from the annual report to the sustainability report is unidirectional (the directionality is from the annual report to the sustainability report). In other words, the accounting data included in the annual report has never been directly influenced by the information provided by non-financial reporting (or sustainability reporting): the only identifiable connection has been in the use of the sustainability reports of some quantitative data produced by the accounting records. In the theoretical proposal, pertinent to the ethical accountability model, a bidirectional connection is instead envisaged between traditional accounting information and ethical information. This would materialize through the inclusion of the accounting valuation of the ethical dimension in the annual report, with a significant and positive impact on the accounting valuation of the company itself. The topics of the paper are addressed to a heterogeneous audience of subjects made up of academic researchers, stakeholders and shareholders: for academic researchers the implications of the paper should serve to create a new theoretical model of connection between annual report and sustainability report disclosure; for stakeholders the model could provide greater transparency in financial reporting, which is particularly significant in companies listed on stock exchanges and for shareholders the proposal could provide a significant revaluation of the financial investments made.