Among the community of corporate communicators, investor relators and financial officers, annual reporting remains ahead of the curve
Among the community of corporate communicators, investor relators and financial officers, annual reporting remains ahead of the curve (Annual Reporting in Europe - 2017).
The times when this fundamental communication tool was an annual ritual ending with a publication being sent to few institutions seem to belong to a prehistoric era. In recent years, a steady increase of social awareness, the acceleration of technological transformations as well as new guidelines and regulations channelling these changes, have transformed annual reports from a duty whose ownership was confined to financial departments to a cross-function project, from a statement of past performance to a strategic document and from a cryptic book on the shelf of a restricted community of followers to a masterpiece of digital design.
The fourth edition of our research amongst the top 800 European listed companies is telling us that two major forces are driving innovation in annual reporting, integration and conciseness.
The first one, integration, is a profound transformation of content structures seeking to explain the interdependencies of economic, social and environmental aspects. As a natural consequence, even before the transposing of European Union directives into national legislations, many companies have included non-financial information in their annual report or have decided to move from publishing two separate reports (financial and sustainability report) into one single integrated report. As shown by our analysis, from 2015 the number of companies publishing one report has increased by 34% while the number of companies publishing two reports has decreased by 30%.
The second trend of this evolution is conciseness. Conciseness means focusing on what really matters as well as adopting new types of language, styles and forms of communication. “An integrated report is a concise communication...In achieving conciseness, an integrated report applies the materiality determination process, expresses concepts clearly and in as few words as possible, favours plain language over the use of jargon or highly technical terminology, follows a logical structure and includes internal cross-references, may link to more detailed information or external sources…” (International Integrated Reporting Council – IIRC). Conciseness is becoming the main ingredient in the presentation and communication of annual reports. We could even say that the more integrated a report, the more digital its nature.
The presentation of annual reports as micro-websites focusing on what is really material to companies and stakeholders shows that organizations are taking all the advantages offered by digital platforms: connecting business models to strategies and linking the value creation process to policies and performance by means of visual techniques, animated infographics, interactive tools and concentrated video clips. In the last four years, Annual Reviews have grown by 52% and, as a digital summary in html, account for 64% of all interactive reports amongst the European organizations included in the 800 STOXX index.
To better visualize these trends, compared to previous editions of the research, we have introduced more examples and case studies. We hope that the analysis helps you not only to keep up-to-date with ongoing changes in how annual reports are communicated but also acts as a source of inspiration and ideas for your next annual report project.
Access and download "Annual Reporting in Europe-2017" here messagegroup.eu/research!