The non-financial reporting landscape can be crowded and confusing for organisations that are constantly tasked with navigating definitions, timescales and requirements for different reporting channels. Most global organisations report in some way on their non-financial performance, strategy and vision, whether it’s through mandated legislation, voluntary schemes, social media or direct communication with stakeholders. But as the pressure increases on organisations to report more information, to more stakeholders, in a more accurate way, more often, it’s understandable that it can get a little overwhelming.
And let’s not forget that all of this communication with stakeholders is supposed to be communicated in a more concise way, tailored to each group according to what they perceived to be relevant, valuable or material. Time to take a breath and consider:
Enhanced reputation, ensuring investors and because it’s mandated are just three examples of why an organisation might report on their non-financial performance. Inevitably there are a multitude of reasons but the key question to consider throughout the process is why it’s being done and what’s hoped to be achieved as a result? It could be winning new business, improving stock prices or gaining new investment. Whatever it is, it is important to keep this in mind and choose a framework that facilitates achieving the goals.
WHO is the audience?
At the heart of any kind of successful communication is knowing your audience. In non-financial reporting, the stakeholder groups are varied and often want different information communicated in a tailored way. As an example, if you considered a manufacturer, how investors, the public and NGOs might view their supply chain for obtaining raw materials would vary. The various framework, standards and guidelines available target different audiences and should be aligned with what the relevant stakeholders see as material issues for each organisation.
WHAT needs to be reported?
More recent guidance on non-financial reporting has placed materiality at the forefront of the reporting process. Engaging with stakeholders to understand what they perceive to be relevant, valuable or material issues for an organisation is the key foundation to a transparent, concise and resonant disclosure on sustainable performance. It’s important to balance what’s reported between what’s been done to date and the goals, targets and vision for the future, whether they be in the short, medium or long term.
Finally, when thinking about choosing a non-financial framework, it’s important to emphasise that it should be part of a process and not a box-ticking exercise to satisfy a real or perceived requirement. Does the framework ‘work’ for the organisation? And inevitably is it going to support the transition to a more sustainable business?
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[image credit: Ethan Lofton]