The Tug of War – The ask and want for annual reporting

What do regulators ask?

Amid the existing array of corporate reporting requirements, additional changes are on the horizon.

The upcoming CSRD will have a significant impact on reporting teams. It aims to incorporate sustainability information into the annual report and establish standardised data comparisons. Achieving this is a substantial challenge, starting with a double materiality assessment.

Though these standards demand more from companies, they ultimately benefit reporting by promoting more comprehensive and meaningful reports. Through increased transparency, they facilitate comparability, elevate governance standards, and encourage a balance between short-term and long-term perspectives.

What do companies and stakeholders want?

Companies want to tell their story, follow regulations, and engage stakeholders. In the past, the annual report was the primary way to do this. However, with more rules and higher expectations and people having shorter attention spans, a different approach is needed.

Most people get information online because they want easy-to-find details. Websites are accessible, searchable, and more concise.

Companies and stakeholders want a more straightforward way to deliver and consume information. Online, companies can focus on the communication they want while providing stakeholders with the information they need.

How do the asks reconcile with the wants?

A dedicated online annual review, whether a single page or a microsite, in addition to a functional compliance-oriented annual report document, will help address the legitimate ask of the regulators, fulfil the companies’ communication agenda, and meet stakeholders’ expectations.

A dedicated online annual review should communicate critical messages and emphasise the strengths of the business and its strategies for success. Our award-winning work with Aliaxis is a case in point. The microsite demonstrates the importance of showcasing a company’s unique qualities, such as its culture, business model, or other distinguishing factors, to underscore its strengths compared to competitors. The business plan should offer a comprehensive view of the challenges and opportunities in the markets, as well as a summary of the strategy. The most impactful online reports will substantiate performance through essential data.

It’s important to note that the online report should bear only some of the burden. More detailed information should be integrated throughout the website, like the traditional approach taken in annual reports.

At Gather, we believe that to fulfil regulatory requirements for standardised and comparable data, a simplified annual report might be the way forward. The document may have a simple, minimal design, perhaps in black and white, to ensure ease of machine and AI readability. In this scenario, a compliance focused report makes sense as the online experience will convey the narrative and eliminate the excessive content that the current annual report tends to have and may continue accumulating.

Regulators are coming from wanting enhanced comparability, corporate responsibility, and more detail with a long-term horizon, whilst companies aim to tell the story of the year to their stakeholders, who are reading it online. The solution of a meaningful and engaging online experience coupled with a simple report seems a practical solution that can be achieved by rebalancing similar budgets.

If you’d like to discuss this, or any other subject, please get in touch with Katy Fuller, Senior Sustainability Consultant, at katy@gather.london

We’d love to know what you think.