Indicators in the context of a state of the environment report are representative, concise and easy-to-interpret parameters which are used to illustrate main features of the environment.

The idea of an indicator was apparently derived from economic analysis where economic indicators such as Gross Domestic Product (GDP) have been used for a long time. A set of indicators, if selected well, provides a shortened but nonetheless generally correct picture of a system. Besides, when combined with textual interpretation, indicators serve as "evidence" highlighting facts that confirm what is being said.

Indicators can either represent an issue in a broad sense (e.g. heavy metals in urban soils indicate the pattern of toxic pollution in general), or aggregate several pieces of information (e.g. a water quality index as a combination of several water quality parameters).

In a state of the environment report, indicator values can be presented in the form of numbers or as part of the text, but are much more powerful in a graphical form, e.g. as trend graphics, distribution maps, diagrams, etc.

A number of international initiatives led to the development of indicators including indicators of sustainable development, environmental indicators, and biodiversity indicators. The most prominent are the indicators proposed by the CSD and the OECD indicators.

Conditions for a good indicator:

1. The indicator, or the information it is calculated from should be readily available.

2. An indicator should be easy to understand, and must be about something measurable.

3. An indicator should measure something believed to be important or significant in its own right.

4. An indicator should be based on information which can be used to compare different geographical areas, social groups etc, so that a picture of distribution- and not just totals and averages can be build up.

5. International comparability is desirable.

To address the many issues and areas that pertain to sustainable development, an organised set of indicators, or indicator framework is needed. Indicator frameworks which arrange or organise indicators in a coherent manner have several uses. They guide the data and information collecting process. They are useful communication tools to decision makers that summarise key information derived from many different sources and sectors. They suggest logical groupings of related sets of information and, therefore, promote their interpretation and integration. They can also help identify data collection needs and data gaps. Finally, indicator frameworks can help to spread reporting burdens, by structuring the information collection, analysis and reporting process across the many issues and areas that pertain to sustainable development. Various frameworks for presenting indicators have been developed. The DPSIR is a common framework for presenting indicators in a state of the environment report.