SDG16. The Non-Financial Information Statement as a key element in corporate transparency

INCYMA News

Beyond financial information

It's no secret that today financial information isn't the only thing that matters to people. stakeholders of an organization. The value of a company is not based solely on its financial results, but also on its social and environmental impact, the well-being of its employees, respect for human rights, and the evolution of the organization itself.
 
Over the past few years, many Spanish companies have published Sustainability Reports voluntarily. Publishing this information has positive effects on investor confidence, as they gain more tools to assess a company's sustainability and long-term future. Consumers and governments also increasingly value companies' social and environmental impact on their communities, as well as their participation in the fight against bribery and corruption.
 
This law, originating in Europe, was published in 2018 and initially only affected companies with more than 500 employees. However, from 2021 It will also include those with more than 250 workers with the aim of expanding the information that stakeholders receive about the risks and impacts of companies and thus improving decision-making and fostering trust in business management and CSR.
 
From 2021 The companies required to comply will be all those that have more than 250 workers, and that they in turn fulfill two of these requirements for 2 consecutive years:

  • Having assets of more than 20 million euros.
  • A turnover of more than 40 million euros.
  • An average number of employees in practice greater than 250.
These States shall measure five fundamental aspects of companies: (i) the policies applied, (ii) the results of these policies, (iii) and the risks arising from these policies, measured in (iv) the non-financial indicators that the companies consider relevant (according to the Law 11/18 of December 28).

Transparency and Sustainability as differentiators for companies

Sustainability and CSR are gaining increasing importance in society and receiving greater support from public administrations. In fact, the European recovery plan for COVID-19 has accelerated decisions on the Green Deal, which establishes sustainability as the only viable path for guiding European economic growth going forward. European companies, therefore, play a crucial role in catalyzing this green growth. The trend suggests that more and more sustainability measures will be implemented from Europe, which Spanish companies will have to comply with. For this reason, organizations that plan further in advance, with the help of leading experts, and even anticipate potential sustainability measures, will be the ones best positioned to adapt, develop the strongest reputation, and achieve the best results.
 
Moreover, both companies subject to the Law and those that choose to publish voluntarily will experience the benefits of transparency and sustainability. To begin with, the willingness to be open and publish data increases the trust of a company's stakeholders, especially investors. Furthermore, the choice of framework for the Non-Financial Information Statement (NFIS) can help the organization address the interests of different stakeholder groups more precisely and according to the company's preferences. Additionally, verification by an external and independent advisor not only increases trust but also strengthens corporate reputation. Finally, preparing the NFIS helps the company develop and improve its data collection systems for other reports and objectives.
 
However, to ensure they comply properly with the regulations and are ready for 2021, companies that have not yet done so need to start planning their non-financial income statements now. Consulting with external advisors specializing in CSR or non-financial information is a crucial step to ensure you obtain reliable data.. However, this is only the first step. Selecting an internal NFI manager, organizing the company's information systems, and establishing communication channels and internal reporting systems are other fundamental steps in preparing the Financial Statements. Finally, it is also important that all staff members are involved and participate in sustainability initiatives and are aware of their importance. The collaboration of all employees is necessary, and therefore everyone must be aware of their essential role in preparing these reports.

The important role of external auditors

The law requires external verification of these reports, but also many companies They need a prior diagnosis or consultation. to identify where and how to begin their internal processes and thus have the information required for their transparency reports. This is why companies specializing in Sustainability are especially relevant, as they are able to:

  • Preparation of non-financial reports, CSR and Sustainability reports in accordance with international standards and frameworks.
  • Independent external verification of non-financial reports and CSR reports.

Equality Plans and Diversity Policy

  • Anti-Corruption and Good Governance Protocols.
  • Implementation of CSR models.
  • Impact analysis on the Sustainable Development Goals (SDGs) and ESG results report, risk and impact analysis.

In conclusion, companies of today and tomorrow will have to adapt to and even anticipate current trends in sustainable growth. Non-Financial Enterprises (EINF) represent the first step towards this new paradigm, both for companies subject to the new law and for those that choose to adopt it voluntarily. Therefore, it is essential to start off on the right foot, and that means consulting with the best external advisors to ensure compliance with the new regulations. It is crucial, then, that all companies with more than 250 employees or that meet the aforementioned requirements begin preparing now to be in the best possible position by 2021.

Source: Correspondents.