The requirements for responsibility reporting are growing at an unprecedented pace
The taxonomy regulation, the amendment of non- financial information directive and the new GRI reporting standard – the goal of these increasingly strict reporting requirements is to ensure an augmentation in quality of the responsibility information provided by companies.
The growing regulation and several different standards and reporting systems cause the sustainability reporters quite a lot of concern. That’s why it pays to start acting early.
In the past, it was repeatedly stated that a company is only responsible when it does more than what the law requires. Within the upcoming changes, the requirements of the law already set the bar very high, especially for listed companies.
The demand from companies’ stakeholders to develop responsibility and report on it, is constantly growing, and regulation is also getting tighter. The EU Commission gave additional time for the enactment of the sustainability reporting directive which touches about 700 Finnish companies, and it will take years for all GRI’s industry-specific standards to be completed. Finnish companies are already at an averagely good level in terms of responsibility reporting. Many medium-sized and small companies already fulfill the obligations of the law, even if they do not yet apply to them. So, often the pressure for additional reporting comes from stakeholders rather than from the law.
The diversity of directives, standards and systems naturally causes challenges for reporters, but their gradual unification is already in sight. On the other hand, the requirements coming from different sources are already quite coherent, and by supplementing the information, the reporters achieve many of their goals at the same time. For example, with the help of the information and key figures required by the new GRI standard, reporters can prepare the board’s activity report in accordance with the future Accounting Act. There will be many essential changes though. Voluntariness is decreasing and the proportion and versatility of mandatory information grows. At the same time, quality assurance increases when external data verification becomes mandatory.
There will be a lot of changes, but there is enough time for preparations if you start early. An early and clear plan with its timetable helps relieve unnecessary feeling of pressure.
It’s also always good to keep in mind what this is all about. Reporting is not a value in itself, but it is used to indicate the current status, achieved progress and future development activities. The overall picture is even bigger: we aim for a better world and more sustainable development. Finland is in the light of the research too one of the pioneering countries in corporate responsibility, and a model student in reporting as well. Responsibility is our competitive advantage, which should be maintained and strengthened.