Reframing Non-Financial Reporting: From Information to Meaningful Interaction
Building Trust Through Transparent Business Practices
The term "Business Reporting" can sound pretty dry. But let's look at it through a different lens. Instead of "reporting," what if we think of it as sharing, teaching, celebrating, including, or committing? These terms make the practice feel more meaningful and human. Each of these activities represents aspects of good leadership, building trust, promoting transparency, and ensuring accountability—all essential practices for any organization.
Most businesses engage in some form of financial reporting, whether for internal use or external stakeholders. But what about non-financial reporting? This practice has evolved into an important tool for businesses of all sizes. But for most, especially small to mid-sized companies, non-financial reporting remains optional. So, what’s involved, and why might it be beneficial for your business?
The Power of Transparent Reporting
Profit. People. Planet. A company's commitment to all three elements (the triple bottom line) is a compelling reason to adopt a non-financial reporting practice. Focusing on people and the planet alongside profits isn't just the right thing to do—it's good business. Sharing information about your company's initiatives in these areas promotes transparency and accountability. This practice brings considerable benefits, including:
Improved corporate culture
Enhanced customer relationships
Better business performance
Reduced risk
Increased investment opportunities
Types of Non-Financial Reports
What does the landscape of non-financial reporting look like? Non-financial reports can take various forms. If you're voluntarily publishing a report, there are no strict rules dictating its structure. This flexibility allows you to tailor your report to best suit your business and audience. However, for clarity and ease of understanding, maintaining some consistency with industry practices is important so your audience knows what to expect. Think of it like a company brochure versus a detailed case study—you generally have an idea of the type of information each will contain.
Below are 13 examples of non-financial reports that audiences will be more familiar with:
Sustainability Report: Focuses on environmental impact and sustainability practices.
Impact Report: Highlights the social and environmental impacts of a company's activities.
Corporate Social Responsibility (CSR) Report: Covers initiatives related to corporate ethics, philanthropy, and community engagement.
Diversity, Equity, and Inclusion (DEI) Report: Details efforts and progress in promoting diversity, equity, and inclusion within the company.
Year-in-Review Report: Summarizes key achievements and milestones over the past year.
Integrated Report: Combines financial and non-financial performance to provide a holistic view of the company's value creation.
Environmental Report: Focuses specifically on the company's environmental policies, practices, and impact.
Governance Report: Details the company's governance practices, including board structure, policies, and accountability mechanisms.
Human Rights Report: Highlights the company's policies and actions regarding human rights issues.
Ethics and Compliance Report: Covers the company's ethical standards and compliance with laws and regulations.
Health and Safety Report: Focuses on workplace health and safety measures and outcomes.
Community Engagement Report: Details the company's involvement and impact on local communities.
Employee Well-being Report: Highlights initiatives and outcomes related to employee health, satisfaction, and overall well-being.
Key Considerations for Determining Your Reporting Strategy
What kind of report should you consider publishing? To determine what makes sense for your organization, it's helpful to run through questions that will help hone in on your key drivers for reporting:
What are our primary areas of impact?
Who are our key stakeholders?
What are our strategic goals?
What regulatory requirements do we need to meet?
What are the expectations of our investors and customers?
What internal initiatives are we most proud of?
What are our biggest risks?
How do we want to position our brand?
What resources do we have available for reporting?
What benchmarks and standards are relevant to our industry?
What feedback have we received from previous reports or stakeholder engagements?
What are our peer organizations reporting on?
How do we measure our success beyond financial metrics?
Your answers to these will help guide what's important for your company right now.
Getting Started with Reporting
Setting up a voluntary reporting practice requires some initial effort, but it doesn't have to be overly complicated. Begin by identifying the key drivers of your reporting initiative using the questions provided earlier. This will help you determine the type of report to produce and the data and content you need to gather.
You might find that established reporting frameworks, which offer pathways to identify, assess, and report on your company's activities, are suitable for your needs. However, if you are a small to mid-sized company, you may not yet have the resources for a comprehensive program like this. In such cases, it may be more effective to report on activities most relevant to your audience by developing your own framework.
To get started with your framework, scope out the following areas:
Key Theme: What is the main focus of your report?
Activities: What actions has your company taken?
Outcomes: What are the results of these actions?
Evidence: What data and statistics support these outcomes?
Lessons Learned: What insights have you gained from these activities?
Future Goals: What are your plans moving forward?
It's important to include measurable and verifiable data to prove your impact. Concrete evidence and metrics are crucial to substantiate your commitment to making a difference. Enhancing credibility by including third-party verification whenever possible adds weight to your claims, demonstrating that your impact is both measurable and validated.
Once you have mapped out the framework that you plan to use, determine a reporting schedule that works with your company's operations and goals. Next, set up a process for regularly tracking, measuring, and collecting data to keep your reports consistent and accurate. Appoint a dedicated team member to lead this effort and ensure that everyone in the company is on board and committed to supporting these initiatives.
Finally, consider how you want to present your reports. Engaging your audience is crucial, so ensure your reports are both informative and visually appealing. Use visuals and stories to bring your reports to life, making them shareable and reflective of your brand's vision, mission, and values.
Conclusion
Think of reporting as an opportunity for 'sharing', 'teaching', 'celebrating', 'including', and/or 'committing' transforms a seemingly dry practice into meaningful leadership actions that build trust, promote transparency, and ensure accountability. Non-financial reporting is a powerful way to demonstrate your commitment to profit, people, and the planet. By embracing transparency and sharing comprehensive insights, you can improve corporate culture, strengthen customer relationships, enhance performance, reduce risks, attract investment, and make a positive impact on society and the environment.
If you're considering publishing a report and need expert guidance on crafting impactful narratives, reach out to Inform Solutions to explore how we can support your reporting journey.
