Learnings from the 2023 reporting season
5 Oct 2023 by Mike Tisdall
Each year around this time I look back at the many annual and integrated reports we have produced since the beginning of the year, trying to discern the shifts and trends that I’ve observed.
While they’ve tended to be incremental since the thunderbolt of integrated reporting’s arrival, shifts are still occurring. Some of this is the result of more companies responding to raised stakeholder expectations, but others who are already at the top of their reporting game are further maturing their content and polishing their delivery.
Let’s skim through the standout shifts.
1. The Integrated Reporting juggernaut continues
Very few of our clients are now producing a mere ‘annual’ report. But some are picking and choosing which bits of the framework to feature – and that rather defeats the purpose. A Value Creation Model does not an Integrated Report make, if not accompanied by transparent disclosure, solid sustainability or ESG content, an incisive future focus on strategy and mitigating potential risk, and demonstrating how all non-financial activity is being fully integrated into how the business is thinking and how that impacts on future financial performance.
2. Content pressure
There’s unrelenting pressure for more and more disclosure. TCFD is now mainstream and mandated. Financials are bloating even further. Modern Slavery can’t be ignored. Te Ao and Te Reo content is gradually increasing. TNFD (Taskforce on Nature-Related Financial Disclosure) is on the horizon.
Some companies try to compensate for page count bloat by reducing the storytelling – being more succinct is good, especially online, but take care not to sacrifice the storytelling because the natural outcome is for your story to be drowned out by the volume of compliance data. As we move more towards primarily digital delivery (pdf) we’ve come to the conclusion that chasing reduced page count is probably fools gold: number of pages is nowhere near as evident or as off-putting as it was in a printed document.
Companies are trying to write less, partly to counter the communication-killer effect of this content pressure, and partly because of the lower word count that’s wise for online readership. There’s a real skill required for this when you still need to communicate the same essence in substantially fewer words. A quality writer and specialist strategic design talent really prove their worth here.
The global structural bodies are doing a good job of trying help too. The consolidation of frameworks, particularly in the area of sustainability reporting, simplifies things enormously, helping offset the ever-increasing topics that are expected to be disclosed: The ISSB (now part of IFRS, which also helps) is now incorporating the Climate Disclosure Standards Board (CDSB), The Taskforce for Climate-related Financial Disclosures (TCFD), the Integrated Reporting Framework, and the industry sector-based Sustainable Accounting Standards Board (SASB). A combined set of rules and guidelines reduces greatly the many different sets of boxes you need to tick.
4. Digital delivery
Even fewer reports are being printed. Many of our clients are now below one hundred. So online delivery is now firmly the mainstream. But still many reports are being designed for print despite being delivered primarily digitally. This not only makes readability more difficult and unwieldy, but also fails to take advantage of the attributes of the medium. A quick look at our Genesis 2023 case study clearly unveils these opportunities.
5. Sustainability/ESG factors are slowly maturing
There’s much more that can be done in this area to give it more meaning:
- Sometimes this part of many reports still feels siloed, as a separate companion ‘strategy’ instead of being part of/woven into the business strategy.
- There tends to be a tick-box compliance approach to content vs taking the opportunity to frame an integrated business narrative around it.
- It still seems too one-way (a company’s impacts on others, rather than the reciprocal: framing the strategic narrative to protecting the business from future impacts). There’s a demonstrative difference between Europe and NZ in this regard. In Europe, sustainability is usually framed as business protection, whereas here in New Zealand it is framed around the company’s impacts on employees, communities and the environment. I delve more deeply down this particular rabbit hole in my 'Sustainability reporting: are you only half doing it?' blog post.
- At what point does the box-ticking data-point reporting overwhelm the business story and interpreting what this all means in practice? When a report is compiled from a ‘sum of its parts’ perspective, it’s all too easy to lose sight of the communication effectiveness of the report. Better to climb out of the weeds and consider the report as a whole in terms of the messages being conveyed. One solution may well be to separate Sustainability/ESG into a separate document.
- Some still elevate process over outcomes, going too heavy up-front on the materiality and stakeholder engagement process rather than what they are actually doing in response to that process.
6. What’s the actual story?
Many companies are really struggling to know what to say or how to frame it. Mostly because strategic plans have been disrupted by economic factors, the pandemic, geo-politics and the need to spend on the urgent rather than the important. While also trying to convince stakeholders that the strategic plans are still right in principle, just delayed. How long can we keep telling this strung-out story without fast enough action or visible results? Dwelling on short-term responses, while no doubt important, inevitably diverts focus from your longer-term strategies, prospects and future-focused outlook.
To avoid getting trapped in the weeds, let the story dominate. Deliver the key takeaways upfront – clearly, with dynamic design and strength. And then get into the depth of the story, the complexities, challenges and trade-offs.
7. Starting earlier
More companies are starting the process earlier in order to ease pressure as deadlines approach. This can be really helpful as resulting reports tend to feel a lot more considered. The downside is, particularly in a volatile economic landscape, that key messages are often changing at the last minute in response to market factors, which can completely undermine both that sense of consideration, or worse, render the very underlying flavour of the report dissonant from the new messages.
8. Continuation of last year’s big trends:
In reviewing last year’s 10 reflections from the 2022 Reporting Season there remain some clear ongoing trends:
- Designing for screen (landscape, single-page views)
- Multi-stakeholder: this means storytelling, accessible design and language, aided navigation, and clear section chunking to help reader groups easily find what interests them
- Suites of documents rather than single overwhelming reports
- Engaging hearts and minds
Vive la evolution!