Investor insights into non-financial reporting
Investors are calling for clearer, more comparable and more integrated non-financial reporting and greater accountability from company boards, according to a new survey.
Brussels / London, 10 September 2013 - The study, by the Association of Chartered Certified Accountants (ACCA)
and the European Sustainable Investment Forum (Eurosif), asked investors
to evaluate the non-financial reporting practices of European
The majority of investors expressed a belief that in
order for non-financial information to be useful it must be comparable
across companies. Most respondents felt that current non-financial
reporting is not sufficiently comparable and agreed that non-financial
information should be better integrated with financial information.
The key findings were as follows:
- 93 percent of investors disagreed or strongly disagreed that current reporting is sufficiently comparable to assess materiality
- 89 percent of investors agreed or
strongly agreed that reporting should be more forward-looking in
addition to providing information on past performance
- 84 percent of investors disagreed
or strongly disagreed that companies make it clear how they identify
material non-financial issues
- 92 percent of investors disagreed
or strongly disagreed that company boards are sufficiently accountable
for non-financial disclosure
- 92 percent of investors agreed or strongly agreed that financial and non-financial information should be more integrated
When it came to the question of what topics non-financial reports
should cover, 66 percent of respondents agreed with the European
Commission's proposal to cover at a minimum environmental,
social/employee, human rights and anti-corruption issues.
Furthermore, while it was acknowledged that there are a number
of non-financial reporting frameworks in use at present, most of the
investors surveyed agreed that established standardized reporting
frameworks should be used by companies.
The paper listed a number of implications that the results of
the survey have for policy makers, in particular that there is a need
for more guidance for companies on how to implement the European
Commission’s proposed legislative requirements and how to integrate
non-financial and financial data.
The rationale behind the creation of the survey came from the
apparent growing interest of investors in non-financial corporate
reporting, and their desire for more robust information that will help
them assess the environmental, social and governance performance of
companies in which they invest.
You can find the original article, the study and more information about the European Commission's proposed legislative requirements on the GRI website