Digitization of non-financial reporting: added value beyond regulatory compliance

Last December 30, 2018, the new Non-Financial Reporting and Diversity Act (11/2018) came into force. It has now been two years since this legal framework was introduced, which requires large companies in our country to publish, in their annual reporting, information relating not only to their economic management, but also to their social and environmental management. And, very importantly, they should include information on key indicators for good CSR practice, such as respect for human rights and the fight against corruption.

The law established the mandatory reporting of non-financial information only for companies with more than 500 employees. However, as of December 2021, three years after the publication of this regulation in the BOE, the obligation will be extended to companies with more than 250 employees.

This new date marks a new horizon for those companies that, to date, have never reported non-financial information. The time has come for them to establish the pillars that will enable them to measure their social, environmental and economic impact and then translate it into an annual non-financial reporting report. Laragon has been working for more than 15 years in the implementation of the most advanced tools and projects in the market for the integral management of non-financial information.

A comprehensive and scalable reporting solution

As Enablon ‘s partners, we recommend its solutions because it is a software that makes it easier for companies to gather all the information related to their activity and, at the same time, to establish key indicators to be able to report in compliance with the legal regulations in force.

Enablon takes the company’s digital transformation to the next level. Its powerful information auditing and verifiability tools guarantee the highest quality of the information reported and facilitate the control of the reporting process, regardless of external (OSD, GRI, DJSI, GHG emissions…) or corporate formats, standards and frameworks. The reliability of the information and the ability to integrate the information with the rest of the company’s information systems through Data Analytics tools are key objectives in the projects we develop.

Throughout this process, from Laragon we work as a team with the company, customizing the solution according to their needs and taking into account the characteristics of their business (activities, geographical distribution, organizational structure…). In this regard, it is worth highlighting the flexibility of our projects for the integrated management of non-financial information:

  • We configure, integrate and adapt the software solutions to the processes of each client.
  • We define in a detailed and specific manner the quality and verifiability controls in the collection and consolidation of information.
  • We design and configure the necessary reports and dashboards to have the information just a click away. The system incorporates different views and modes of access to information, offering a user-friendly interface for all types of users.
  • The system allows a permanent update of the client’s indicator catalog, being able to easily add new information and easily adapt to the evolution of reporting frameworks (e.g. future integration of SASB and IIRC), as needed.
  • The reporting process can be enriched with materiality studies, identification and monitoring of objectives and KPIs for the follow-up of the organization’s strategies, trend and scenario analysis, etc.

Non-financial reporting: an added value

Although at first glance it may seem that non-financial reporting is a mere collection of data to comply with regulations, the reality is that this type of reporting goes much further and provides a detailed and detailed overview of the company’s activity.

In this context, non-financial reporting has also become a tool for:

  • Decision-making.
  • Inform stakeholders.
  • Attracting investors.
  • Exercise transparency and accountability.
  • Establish a basis for process improvement and company sustainability.

The international non-financial reporting agenda

Although in Spain the Non-Financial Information Law lays the foundations for the reporting of non-financial information, the reality is that, at present, there is no single standard of reference.

The future development of a unified set of clearly defined international principles and standards for presenting non-financial information will make this reporting much more reliable and will also facilitate comparability between reports.

In this context, at the international level we are seeing the first steps towards the unification of standards. Recently, the IIRC and SASB expressed their intention to join forces, becoming a single organization under the name of the Value Reporting Foundation.

Along the same lines, IIRC and SASB, together with CDSB, GRI and CDP, have launched an initiative to create a single reporting standard that includes financial and non-financial information. have launched The Impact Management Project an initiative to create a single standard reporting model that includes both financial and non-financial information.

For its part, the European Union, within the framework of the Green Pact, has continued to work in 2020 on the revision of the Non-Financial Reporting Directive. In fact, last June saw the end of the public consultation period to gather stakeholders’ opinions on possible revisions, with a view to establishing a new regulatory approach to the presentation of non-financial reporting.

Change is a constant in the world of reporting. That is why at Laragon we stay close to companies to accompany them on this path and facilitate the adoption of new technologies and tools.