ACCA: Current levels of non-financial disclosure are not sufficient for assessing materiality

22 July 2013

According to a survey by Eurosif and ACCA, the overwhelming majority of investors want European companies to be more consistent and transparent in their non-financial reporting.

93 per cent of investors surveyed for the report, 'What do investors expect from non-financial reporting?', called for greater consistency and transparency, while 84 per cent of respondents agreed established standardised reporting frameworks need to be used by companies to achieve both those aims.

Other key findings of the survey were:

• The most important sources of non-financial information for investors are sustainability/corporate sustainability reports and annual reports.
• A majority of respondents agree that current non-financial information published by companies is linked to the CSR policy. However, they disagree that current non-financial information published by companies is linked to business strategy and risk, and disagree that sufficient information is provided to assess financial materiality.
• In order for non-financial information to be useful to investors it must be comparable across companies. Respondents state that current non-financial reporting is not sufficiently comparable and agree that non-financial and financial information should be better integrated.
• Qualitative policy statements are important to assess financial materiality, but quantitative key performance indicators (KPIs) are viewed as essential.
• Accountability mechanisms should be part of non-financial reporting, either through new board oversight mechanisms, third party assurance and/or shareholder approval at AGMs.

Press release

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