The quality of corporate nonfinancial reporting among leading companies is improving and sustainability reporting is now the norm for the world’s leading companies, according to research from the World Business Council for Sustainable Development.
The research sample, composed of WBCSD’s membership and reviewed using criteria developed by London agency Radley Yeldar, shows companies are increasingly demonstrating how trends in the external environment inform corporate strategy. This reflects progress on the long-standing reporting challenges of prioritization of key nonfinancial issues, and connectivity of the content disclosed.
Many also set ambitious goals against the issues most material to their business, track progress through key performance indicators, and provide a balanced picture of performance of their businesses over time.
The research found:
- Year-on-year scores show a 19 percent improvement in the quality of disclosure on how companies prioritized the nonfinancial issues, which matter most to the business and stakeholders.
- Better links between strategy, targets and performance — with “line of sight” scores improving by 18 percent on average across the sample.
- More timely disclosures were offered by the sample — with information getting to market on average 4.5 months after year-end, compared to 6 months in 2013.
Investors are increasingly considering nonfinancial factors such as resource scarcity and looking at a company’s integrated reporting to assess the risks and returns of a company, according to a May report by PricewaterhouseCoopers.