Presentation 18

Reporting on Financial and

Non-financial issues
Disclosure
Disclosure is achieved mainly through three
forms of reports, namely;
 Financial reporting
 Non-financial reporting
 Integrated reporting
Financial Reporting
 Financial reporting
 Basis for financial reporting are the financial
reporting standards
 International Financial Reporting Standards
 International Public Sector Accounting Standards
 Public Auditors and Accountants Board technical
guidance
 Standards available on relevant websites
Non-financial Reporting
 About non-financial reporting …..
 Non-financial reporting helps investors,
consumers, policy makers and other stakeholders to
evaluate the non-financial performance of
companies and encourages these companies to
develop a responsible approach to business.
 The standard for reporting non-financial issues is
through sustainability reports
 Will be referred to as sustainability reporting as
define on next slide
 Sustainability Reporting
 Process of gathering and disclosing data on non-
financial aspects of a company’s performance,
including environmental, social, employee and
ethical matters, and defining measurements,
indicators and sustainability goals based on the
company’s strategy.
 Sustainability reporting might be performed
according to the Global Reporting Initiative’s (GRI)
methodology, which defines Sustainability reporting
guidelines and the best practice in the field.
 Global standards for sustainability reporting
 The most widely used standards for sustainability
reporting are the Global Reporting Initiative (GRI)
Standards.
 The GRI Standards create a common language for
organizations – large or small, private or public – to
report on their sustainability impacts in a consistent and
credible way..
 The Standards help organizations understand and
disclose their impacts in a way that meets the needs of
multiple stakeholders.
 In addition to reporting companies, the Standards are
highly relevant to many other groups, including
investors, policymakers, capital markets, and civil
society.
 Global standards for sustainability reporting
 The GRI Standards represent global best practice
for reporting publicly on a range of economic,
environmental and social impacts.
 Sustainability reporting based on the Standards
provides information about an organization’s
positive or negative contributions to sustainable
development.
https://www.globalreporting.org/how-to-use-the-gri-standards/gri-standards-english
-language
/
Benefits of non-financial reporting
 Improve business reputation
 Differentiate from competitors
 Win new business opportunities
 Generate positive publicity and exposure in media
 Strengthen customer retention
 Enhance relationships with customers, suppliers and
stakeholders
 Attract, retain and maintain satisfied workforce
 Save resources and decrease operating costs, as well
as manage risks
 Improve efficiency and process management
Integrated Reporting
 Integrated Reporting
 Process of building an integrated report by
combining financial statements and sustainability
reports into a coherent whole that explains
company’s ability to create and sustain value.
 Integrated reporting might be supported by the
Integrated Reporting <IR> Framework.
 Aim of integrated reporting
 Improve the quality of information available to providers of
financial capital to enable a more efficient and productive
allocation of capital
 Promote a more cohesive and efficient approach to corporate
reporting that draws on different reporting strands and
communicates the full range of factors that materially affect
the ability of an organization to create value over time
 Enhance accountability and stewardship for the broad base
of capitals (financial, manufactured, intellectual, human,
social and relationship, and natural) and promote
understanding of their independencies
 Support integrated thinking, decision-making and actions
that focus on the creation of value over the short, medium
and long term.
 <IR> Framework - 8 Content Elements
 Organizational overview and external environment - What
does the organization do and what are the circumstances
under which it operates?
 Governance - How does the organization’s governance
structure support its ability to create value in the short,
medium and long term?
 Business model - What is the organization’s business model?
 Risks and opportunities - What are the specific risks and
opportunities that affect the organization’s ability to create
value over the short, medium and long term, and how is the
organization dealing with them?
 Strategy and resource allocation - Where does the
organization want to go and how does it intend to get there?
 <IR> Framework - 8 Content Elements
 Performance - To what extent has the organization achieved
its strategic objectives for the period and what are its
outcomes in terms of effects on the capitals?
 Outlook - What challenges and uncertainties is the
organization likely to encounter in pursuing its strategy, and
what are the potential implications for its business model
and future performance?
 Basis of presentation - How does the organization determine
what matters to include in the integrated report and how are
such matters quantified or evaluated?