We recently attended the Workiva Accelerate 2024 event in London where we heard from key industry voices including Alicia Kedzierski, ESG lead at the Financial Conduct Authority (FCA), Paul Dickinson, founder and chair of CDP, and Paul Druckman, chair of the World Benchmarking Alliance and board member of Accounting for Sustainability (A4S).
Using insights from the recent Workiva ESG Global Practitioner Survey, discussions throughout the event focused on how companies can navigate the evolving regulatory landscape, from the Corporate Sustainability Reporting Directive (CSRD) to the International Sustainability Standards Board (ISSB), after 87% said they are struggling to adapt to new regulation and the future of integrated reporting as the new ‘gold standard’ for reporting.
Gone are the days where the annual report was a static document focused solely on the financial health of a company. The way we report is undergoing a major transformation, driven by evolving regulatory requirements, increased scrutiny from investors and stakeholders, and technological advancements.
The Workiva Accelerate 2024 event in London hosted a number of panels aimed at identifying and addressing these challenges, providing practical insights for report preparers.
Our top five insights from the event:
The rapidly evolving regulatory requirements
Reporting frameworks and requirements are placing increased pressure on reporters to provide comprehensive, transparent and comparable data in the annual report. However, reporters are struggling to collate this data, with 83% of practitioners saying that accurate data collection for CSRD alone would be an issue for their organisation.
Emphasising the need for proactive regulatory compliance and comprehensive disclosures
Panellists from the FCA, the World Benchmarking Alliance and KPMG highlighted the importance of ensuring report preparers are on top of all regulatory developments and assess where early adoption is possible. At Luminous we recommend that companies should consider early adoption of reporting frameworks such as ISSB, CSRD, and TPT wherever possible. This will allow them to have the appropriate level of data required to fully comply and assess any gaps.
Investors and stakeholders are no longer solely interested in the short-term profits of a company. They want to understand a company’s impact on society and the environment, long-term viability and commitments to good governance. Workiva’s recent survey found that 88% of institutional investors said they are more likely to invest in companies that obtain assurance of ESG data. Alongside increased expectations from investors, regulators are requesting greater transparency on non-financial activities across the value chain.
Enhancing reporting comms strategies for stakeholder engagement
We heard from many panellists on how reporters are evolving to meet the demands of both investors and regulators. A big topic of discussion was how companies can implement assured integrated reporting to meet the needs of these stakeholder groups.
With increased stakeholder demands and growing disclosures, it is key that reporting language and content are tailored to specific audiences to boost engagement. We recommend that companies embrace connected reporting suites and consider how data can be used to aid storytelling. It is important to ensure that data not only meets regulatory requirements but is also supported by compelling narrative and effective visualisation, including elements such as infographics, deep dives, videos and online reports, which can enhance reader experience and speak to a wide range of stakeholders.
Harnessing technology for streamlined and integrated reporting solutions
Technology was again highlighted as the key solution to a myriad of problems facing reporters at the moment, which include a push for the adoption of digital reporting formats from regulators. We heard from Workiva, which outlined the benefits of cloud-based solutions that can streamline reporting processes, enhance collaboration and improve data quality and management. Cloud-based platforms like Workiva integrate financial and non-financial, ESG and audit & risk reporting into one platform. For many reporters, solutions such as these will be the way forward. Reporters can also look to integrate technological solutions including generative AI to enhance productivity. 85% of respondents to the recent Workiva survey agreed that generative AI will make ESG/sustainability reporting easier in the next five years. This however is met with a caveat, that companies must assess and monitor any associated risks linked to AI and cyber security. We recently published a blog on how reporters are addressing AI in their Annual Reports which can be viewed here.
Navigating the emerging landscape of nature-related reporting
Reporting requirements for climate alone will no longer be an issue for report preparers, with nature-related reporting becoming increasingly more likely for UK companies in the near future. As mentioned by Alicia Kedzierski, the FCA’s current focus on regulating climate-related reporting and its newly published anti-greenwashing rules will soon have to shift to also include nature as soon as 2025 to meet the Kunming-Montreal Global Biodiversity Framework (GBF) requirements. The collection and assurance of this data will likely be a challenge for reporters. Therefore, it is essential for reporters to start early and use the resources currently available to them, such as the TNFD framework, to establish a pipeline for data collation and reporting.
Luminous is an official Workiva certified partner with a team of highly skilled creative and production experts specialising in its ‘designed reporting’ platform, helping our clients to enjoy the benefits the technology brings while maximising the creative output. We have helped many clients transfer to the Workiva platform in recent years, including Allied Irish Banks (AIB), National Grid and Marex. During this time, we have developed a bespoke workflow that builds on the strengths of the system to ensure a seamless production experience.
If you are considering adopting Workiva for your Annual Report and would like to learn about how Luminous can support you on that journey, please get in touch.