A Qualitative Model of the Firm’s Sustainability Reporting(SR) Requirements in the Iranian Capital Market, Inspired by the Global Reporting Initiative (GRI) and the Sustainability Accounting Standards Board (SASB) Standards

Document Type : Original Article

Authors

• Mohsen Zhaleh Azadzanjani
• Naghi Fazeli
• Khosro Faghani Makrani

Department of Accounting, Semnan Branch, Islamic Azad University, Semnan, Iran

10.22067/ijaaf.2025.44716.1424

Abstract

The paper primarily aims to provide a qualitative model of the company's sustainability reporting requirements in the Iranian capital market, inspired by the Global Reporting Initiative (GRI) and the Sustainability Accounting Standards Board (SASB) standards. The study population can be divided into three general groups for quantitative data analysis: (1) industry experts, (2) public stakeholders, and (3) academic experts. Finally, after the distribution of 200 instruments, the sample size equals 180 research experts, sampling methods (judgmental) and snowball sampling. The data collected is related to the period between the winter of 2022 and the spring of 2023. The research data analysis method is "content analysis" in the MAXQDA environment. One of the main findings of the research is that the qualitative model of SR  in Iran's capital market includes the main variables such as management of the company's legal and regulatory environment in terms of leadership and governance requirements in SR; Health and safety of human capital in human capital requirements of SR; stakeholders' performance Disclosure of the most crucial company performance criteria in the stakeholders' performance of the management's interpretive report; The flexibility of the business model based on costs in the economic requirements of the business model and innovation in SR; customer welfare was presented based on the promotion of education and training in the social capital requirements of SR  and the management of energy and fuel consumption in the environmental requirements of SR. The current research is innovative in various aspects. First, the recent research is considered innovative in terms of subject matter. According to the compilation of international GRI  standards of 2018, the SASB  of 2019, the conceptual framework of integrated reporting of 2016 at the international level and the interpretive reports of the management of companies admitted to the Tehran Stock Exchange in 2016, and the obligation of publishers to disclose the details of energy consumption approved since November 2021 efforts to examine the relationship between the financial and non-financial aspects of the sustainability of each type of this reporting thoroughly seem necessary. Also, this paper tries to address all the critical criteria of economic, environmental, and social performance (KPI) of the SR  of the world and Iran. Finally, presenting the SR  model of companies takes the first step in providing professional sustainability reports in Iran.

Keywords

• Capital Market
• Reporting
• Sustainability Reporting(SR)
• GRI Reporting Standard
• SASB Reporting Standard

Main Subjects

• Accounting

---

References

1. Abdi, M., Kordestani, G. and Rezazade, J. (2019). Designing of corporates’ coherent sustainability reporting model. Financial Accounting Research, 11(4), 23-44. https://doi.org/10.22108/far.2019.118585.1498
2. Alawattage, C., Jayathileka, C., Hitibandara, R. and Withanage, S. (2023). Moral economy, performative materialism, and political rhetorics of sustainability accounting. Critical Perspectives on Accounting, 95(1), A. 102507. https://doi.org/10.1016/j.cpa.2022.102507
3. Aljajawy, T. M., Dolab, Y. and Alkhfajy, E. J. (2022). The role of global reporting initiative (GRI) for achieving SR. In International Conference on Business and Technology (pp. 867-884). Cham: Springer International Publishing. Springer, Cham. https://doi.org/10.1007/978-3-031-08954-1_73
4. Al-Shaer, H. and Hussainey, K. (2022). Sustainability reporting beyond the business case and its impact on sustainability performance: UK evidence. Journal of Environmental Management, 311(61), A.114883. https://doi.org/10.1016/j.jenvman.2022.114883
5. Asogwa, I. E. (2023). Uptake of sustainability reporting adoption by non-governmental organizations: an agenda for policy and practice. Journal of Cleaner Production, 388(57), A. 135842. https://doi.org/10.1016/j.jclepro.2022.135842
6. Bazari Jagargh, A. )2022(. Book of accounting in the stock exchange: a look at the relationship between the audit report and the exit of companies from the stock exchange. Line and Nai, Tehran, Iran (In Persian).
7. Bellandi, F. (2017). Materiality in financial reporting: an integrative perspective: for compilers of financial reporting standards and accounting PhD students. Terme publications. Tehran, Iran (In Persian).
8. Cho, C. H., Senn, J. and Sobkowiak, M. (2022). Sustainability at stake during COVID-19: Exploring the role of accounting in addressing environmental crises. Critical Perspectives on Accounting, 82(3), A.102327. https://doi.org/10.1016/j.cpa.2021.102327
9. Chu, B., Zhang, S., Liu, J., Ma, Q., & He, H. (2021). Significant concurrent decrease in PM2.5 and NO2 concentrations in China during COVID-19 epidemic. Journal of Environmental Sciences, 99, pp. 346-353.
10. Del Mar Alonso‐Almeida, M., Llach, J. and Marimon, F. (2014). A closer look at the ‘Global Reporting Initiative’ sustainability reporting as a tool to implement environmental and social policies: A worldwide sector analysis. Corporate Social Responsibility and Environmental Management, 21(6), pp. 318-335. https://doi.org/10.1002/csr.1318
11. Erlandsson, J., Bergmark, P. and Höjer, M. (2023). Establishing the planetary boundaries framework in the sustainability reporting of ICT companies–A proposal for proxy indicators. Journal of Environmental Management, 329(81), A. 117032. https://doi.org/10.1016/j.jenvman.2022.117032
12. Esmailzadeh, Gudari, Hassan, Jabari, and Arabzadeh. (2021). Identifying factors affecting the sustainability reporting of pharmaceutical companies: the combined use of multi-criteria decision-making methods and Delphi. Journal of Management Strategies in Health System, 6(3), pp. 233-247 (In Persian). http://dx.doi.org/10.18502/mshsj.v6i3.8038
13. Fathi, V. (2023). Economic consequences of audit quality considering the quality of financial reporting of companies, Contemporary Research Quarterly in Management and Accounting Sciences, 5(16), pp. 1-22‎ (In Persian).
14. Hajiha, Z. and Chenari. H. (2023). The effect of comparability of accounting on the quality of financial reporting with an emphasis on audit quality. Judgment and Decision Making in Accounting and Auditing, 2(5), pp. 87-106 (In Persian). http://dx.doi.org/10.30495/JDAA.2023.699869
15. Kücükgül, E., Cerin, P. and Liu, Y. (2022). Enhancing the value of corporate sustainability: An approach for aligning multiple SDGs guides on reporting. Journal of Cleaner Production, 333(2), A. 130005. https://doi.org/10.1016/j.jclepro.2021.130005
16. Mazidi, M. and Dastori, N. (2021). An introductory book on qualitative research: a philosophical and practical guide. Measurement and knowledge. Tehran, Iran. (In Persian).
17. Michalak, J., Staszkiewicz, P. and Waniak-Michalak, H. (2023). Is academic recommendation translated into the European Union corporate sustainability reporting directive proposal. Journal of Cleaner Production, 412, A. 137186. https://doi.org/10.1016/j.jclepro.2023.137186
18. Mir Zamani, A., Amiri, A.N., Hamidizadeh, A. and Rezagholizadeh, E. (2019). Identifying institutional factors affecting sustainability reporting in Iran's oil industry. Organizational Culture Management, 18(4), pp. 703-721 (In Persian). https://doi.org/10.22059/jomc.2020.294374.1007955
19. Nakhai, K., Barzegar, G., Moradipour, R. and Askarzadeh, M. (2022). Sustainability reporting, social responsibility reporting (CSR) and environmental reporting, First National Conference on Innovation in Management, Accounting and Economics Research, Mashhad, Iran (In Persian).
20. Narula, S., Puppala, H., Kumar, A., Frederico, G. F., Dwivedy, M., Prakash, S. and Talwar, V. (2021). Applicability of industry 4.0 technologies in the adoption of global reporting initiative standards for achieving sustainability. Journal of Cleaner Production, 305(18), A. 127141. https://doi.org/10.1016/j.jclepro.2021.127141
21. Nwobu, O. A. (2017). Determinants of corporate sustainability reporting in selected companies in Nigeria. Covenant University Repository, 9(1), pp. 1-287.
22. Palea, V. (2018). Financial reporting for sustainable development: critical insights into IFRS implementation in the European Union. In Accounting Forum, 42(3), pp. 248-260. https://doi.org/10.1016/j.accfor.2018.08.001
23. Papoutsi, A. and Sodhi, M. S. (2020). Does disclosure in sustainability reports indicate actual sustainability performance? Journal of Cleaner Production, 260(67), A. 121049. https://doi.org/10.1016/j.jclepro.2020.121049
24. Parfitt, C. (2022). A foundation for ‘ethical capital’: The sustainability accounting standards board and integrated reporting. Critical Perspectives on Accounting, 1(1), A. 102477. https://doi.org/10.1016/j.cpa.2022.102477
25. Principles of the United Nations Global Compact (UNGC). (2015), Corporate sustainability guide, building a sustainable future, Tehran: Termeh, Iran (In Persian).
26. Rahmani, Mahmoudkhani, Homayun, Niakan, and Lili. (2022). Examining the standards, guidelines and publication status of sustainability reporting in the insurance industry. Insurance Journal, 11(2), pp. 159-174 (In Persian).
27. Rosati, F. and Faria, L. G. (2019). Addressing the SDGs in sustainability reports: The relationship with institutional factors. Journal of Cleaner Production, 215(11), pp. 1312-1326. https://doi.org/10.1016/j.jclepro.2018.12.107
28. Rydell, J. and Kristoffersson, E. (2017). Sustainability report development in accordance with the GRI Guidelines: Insights from Swedish and Finnish Forestry Companies. Working paper, Umeå, Sweden
29. Taghavi Godarzi, M and, Fazilat, F. (2021). Sustainability and environmental change reporting challenges for public sector accountants. Public Sector Accounting and Budgeting, 5(2), pp. 66-71 (In Persian).
30. Taherinia, M. and Darbandi Farahani. S. (2022). Examining the mutual relationship between the simultaneous disclosure of interpretive reports and management profit forecast with informational symmetry and investment quality with environmental uncertainty moderation. Accounting and Social Interests, 12(2), pp. 55-88‎ (In Persian). https://doi.org/10.22051/jaasci.2022.37574.1639
31. Zhaleh-Azad Zanjani, M, (2018b). Set of integrated sustainability reporting standards 2018 (General and Economic Department of GRI  Group 100 and 200), Tehran: Terme, Iran (In Persian).
32. Zhaleh-Azad Zanjani1, Mohsen, (2018a). Set of integrated sustainability reporting standards 2018 (Environmental Department of GRI 300 Group), Tehran: Termeh, Iran (In Persian).