Non-Financial Reporting Non-financial reporting refers to the disclosure of a company’s environmental, social and governance (ESG) performance and impact in addition to traditional financial reporting. Non-financial reporting provides stakeholders with information about a company’s sustainability and ethical practices and is becoming increasingly important as investors, customers and regulators demand greater transparency and accountability.
Non-financial reporting typically includes information on a company’s environmental impact, labor practices, human rights policies, community impact, supply chain management, diversity and inclusion and other ESG factors. Non-financial reporting may take the form of sustainability reports, integrated reports or standalone ESG reports.
The purpose of non-financial reporting is to provide stakeholders with a more comprehensive and meaningful picture of a company’s performance and impact than traditional financial reporting alone. Non-financial reporting is used by investors to evaluate a company’s risk exposure, reputation and long-term growth potential. It is also used by other stakeholders, such as customers, employees and regulators, to assess a company’s commitment to sustainability and ethical practices.
Many companies are now required by law or stock exchange regulations to disclose their non-financial performance, and many others choose to do so voluntarily as part of their ESG reporting efforts. Non-financial reporting is an important tool for companies to communicate their commitment to sustainable and ethical practices and to build trust with stakeholders.