Europe ¦ Well developed guidelines and regulation drives a practical, targeted and measured approach to reporting. Key statistics 46% link non-financial issues to overall group strategy objectives or vision 80% outline long-term business objectives 28% of reports convey non-financial issues are integral to the group strategy 38% of reports’ non-financial discussion complements the group strategy 82% report on non-financial performance data 55% make a commitment to wider stakeholder groups in the overall vision whilst 20% make a commitment to shareholders only Europe as a sample group was certainly not homogeneous. No country dominated the sample group with representation from ten different countries in total. Three quarters of the sample group was made up from the UK, France, Germany and Switzerland. Sectors that dominate include consumer goods, financial or oil & gas and a few broad trends transcend geography and sector: simple businesses usually have simple reports, complex organisations usually have complex reports. Other trends are noticeable too. Consumer-facing businesses often pay more attention to communicating through their reports, giving more focus on products and brands in ‘telling the story’ and seem to be more responsive to meeting the growing social and environmental concerns of their customers, than business-tobusiness organisations. Financial services companies focus more on the numbers than the narrative, which is clearly driven by their extensive disclosure requirements. In addition, there is little evidence of integration of non-financial issues into their core businesses. Overall, European reports tend to be more developed and consistent in the subject matter, covering market context, strategy, performance, governance, risks and sustainability issues. However, in reporting on non-financial activities and performance, for the most part, the approach seems to be split between two categories: those where non-financial issues are integral to the business and strategy and reported on as such; and those where reporting on nonfinancial issues is dominated by a conservative and almost ‘box ticking’ approach driven largely by quite established mandatory and voluntary frameworks. An emerging group of companies seem to be moving to a place where non-financial issues are presented as integral to business strategy and reported on as such. In addition, there are also examples of innovative approaches where companies are defining their role in meeting some of the global sustainability challenges, although few demonstrate how this will be achieved with their business strategy. Key highlights of reporting: • Structured approach to reporting with the majority of the companies covering key elements of strategy, risk, performance and governance. • The strategic discussions are quite developed with many companies providing clear details of their objectives and priorities. • Majority of reports have detailed strategic information included in the report but only a select few of the reports effectively discussed the integration of non-financial issues within the strategy. • Most of the companies in the sample group discuss non-financial issues and the policies in place to manage these issues, although the approaches to reporting on these varies across countries and sectors. • Prominence given to Board and governance processes. Average report length Average length of narrative Average length of financials Number of ‘integrated’ reports 239 pages 138 pages 101 pages 2 out of 40 reports www.blacksunplc.com © Black Sun Plc 2011 9