Corporate reporting is evolving rapidly as external expectations force companies to respond to a multiplicity of formal requirements and stakeholder demands for transparency.
Sustainability plays a key role in this transformation as environmental, social and governance (ESG) information and a company’s wider value to society are seen as critical to financial risk and performance. The conventional, neat division between financial and non-financial topics is breaking down: instead of treating them as separate domains, how companies interpret the interplay between financial performance and their approach to sustainability is emerging as a key attribute of best practice reporting. What’s more, reporting needs to express a clear and engaging narrative about future strategies and progress.
At Lundquist we created Blurring Boundaries to guide companies in this new scenario. By tracking reporting practices annually, we analyse various elements – ranging from type of reporting document, organisation of content, use of visual and narrative techniques – that help make the sustainability approach credible, clear and integrated.
How the research works
In Blurring Boundaries, we analyse the reporting practices by mapping and analysing all corporate documents that deal in some way with ESG topics. We look at two groups of companies:
- In Italy: 40 members of the benchmark FTSE MIB index plus 10 top non-listed names
- In Europe: “Gold class” members of the Dow Jones Sustainability Index and industry movers that are based in European countries.
We conduct a quantitative and qualitative analysis looking at where and how sustainability is integrated into corporate documents, covering annual, integrated and sustainability reports as well as the connectivity between financial and non-financial topics. We examine everything from materiality to guidelines, from digital formats to visual communications and from the Sustainability Development Goals (SDGs) to reporting guidelines.