20 June 2019 — Stories
by Olivier Boutellis-Taft and Mario Abela
People need to be able to rely on corporate information to make important decisions surrounding investing, buying products or signing employment contracts. Non-financial corporate information (NFI), such as environmental or social impacts, is essential to get the full picture of a company’s performance. Financial information alone cannot provide this anymore. Ultimately, integrating NFI leads to longer term value for businesses and contributes to more sustainable economies.
Ten years ago, the top global risks in terms of impact and likelihood didn’t include social or environmental issues. Today they make up four of the top five. For years, companies weren’t equipped to address those risks and investments decisions were made without taking this key information into account.
But times have changed. Understanding non-financial risks and opportunities is critical for the success of individual businesses and the financial community at large. Mario Abela, director of Redefining Value at the World Business Council for Sustainable Development (WBCSD) believes finance professionals need to identify the full array of possible risks and opportunities – including those that relate to non-financial and intangible aspects of the business – to create longer term value for business, society and the environment.
Olivier Boutellis-Taft, Accountancy Europe CEO points out: “In the era of fake news, the trustworthiness of information determines its value and impact. NFI needs to be reliable to strengthen confidence in companies and in markets.”
“With their experience in reporting and technical assurance, professional accountants assist companies to focus on long-term horizons and value creation for the business and its key stakeholders” emphasises Boutellis-Taft. Via reporting and assurance, accountants help build a financial system that supports sustainable economies.
As NFI is becoming increasingly important for investors and other stakeholders, the demand for assurance on NFI is growing. Providing independent assurance on the NFI reported enhances its quality and reliability. Due to different levels of maturity in NFI reporting, professional accountants approach NFI assurance engagements in different ways. A practical business perspective is indispensable to making assurance on NFI reporting a reality. Accountancy Europe and the WBCSD have thus combined their expertise from business and professional accountants to contribute to sustainable finance in Europe.
See our joint paper Responding to assurance needs on non-financial information based on our expert workshop on the practical challenges of NFI assurance.
See more on our work on NFI and assurance: