Non financial reporting is the disclosure of a company’s social, environmental and human rights information. It is also known as Environmental, Social and Governance information (ESG).
Today, European multinational companies have expanded to a point where they have a significant impact on a variety of areas such as the economy, the environment, social and human rights, as well as the health of the community in which they operate.
Specific examples of the areas which are affected include:
– discrimination
– sexual harassment
– health and safety
– freedom of information
– torture
– freedom of expression
– privacy
– poverty
– food and water
– education
– housing
It is widely recognized that environmental, social and governance information reporting is important. The lack of corporate information disclosure restrains corporate accountability and responsible behaviour. For the companies themselves, non-financial reporting is a way to improve risk management and long term social, environmental and financial performance and competiveness. For the communities and citizens affected by the activities of the corporation, non financial information disclosure enables them to assert their rights and restore their trust in businesses. For investors and Stakeholders, non-financial reporting is also a way to reinforce the stability and predictability of the firm’s performance on financial markets.